Apple Trees And Bad Guys

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Once in awhile a story comes across my desk in which I have a personal stake. It doesn’t happen often, but coming from a long time insurance family, there are such occasions.

And so it was that I paid special attention to one of the most recent viatical busts. Federal authorities allege that approximately 500 investors from 20 states were defrauded of almost $25 million. David Goldenberg of Bloomfield Hills, Michigan, no longer has to worry about his arrest — he took his own life in October. Mark Eric Wolok of West Bloomfield, Michigan, along with six other California defendants, are still facing multi-decade jail sentences and large fines if found guilty of the charges.

The defendants are alleged to have made a number of false statements, including that the purchase of a viatical was safe, secure and risk-free. They are also accused of claiming that they needed no securities licenses to sell such products. The indictment states that they did not tell investors about the risks; quite to the contrary, in fact. They allegedly claimed that their “bonding company” offered protection, however investigation revealed that it was domiciled in the South Pacific island nation of Vanuatu and was not a legitimate bonding company at all. (Oops?)

Both Florida and California had issued cease and desist orders. The IRS, the California Department of Corporations and the US postal Inspection Service participated in the investigation.

We here at JCFR suggest a defense of “The Apple Doesn’t Fall Far From the Tree.”

© Copyright 2007 The John Cooke Fraud Report