Saturday, September 8, 2012

Financial Planner/Attorney Who Beat Insurance Companies At Their Own Game Now Faces 66-Count Indictment

A recent story in ProPublica tells the tale of Rhode Island financial planner Joseph Caramadre, a trained lawyer and certified public accountant who was resourceful enough to find loopholes in variable annuity contracts peddled by insurance companies and employed an approach in purchasing these contracts that enabled him to beat the insurance companies' brains in at their own game.

He has been the target of civil lawsuits by the bully insurance companies a number of times and keeps on prevailing against them in court, as this excerpt reflects:

  • There have been at least eight lawsuits filed in Rhode Island's federal district court relating to Caramadre's scheme. Insurance companies Nationwide, Transamerica and Western Reserve have all sued. The companies have not fared well in civil court.

    United States District Court Judge William Smith keeps knocking out claims. The companies then re-file new ones. As of this writing, Western Reserve has filed five successive complaints against Caramadre in the same case. When he dismissed Nationwide's complaint, Judge Smith questioned whether the company ignored its own contracts.

    In the Western Reserve case, Judge Smith wrote, "It is a bit ironic for Plaintiffs [the insurance companies] to suggest that they did not know the true nature of contracts that they themselves drafted."(1)
Despite their absymal results in bringing these suits, the sore loser insurance companies apparently succeeded in bellyaching to the right people because the Rhode Island Feds saw fit to present the case to a federal grand jury. According to the story, in November 2011, after almost two years of work, a Rhode Island grand jury issued a 66-count indictment against Caramadre and another. Their criminal trial is scheduled to begin in November.

After reading the story, one can easily conclude that the only thing Caramadre may be guilty of is being a little greedy.

For the story, see
Death Takes a Policy: How a Lawyer Exploited the Fine Print and Found Himself Facing Federal Charges.

(1) Western Reserve Life Assurance Co. of Ohio v. Caramadre, Case Nos. 09-470 S, etc. (D. R.I. February 7, 2012).

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