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New Braunfels Investment Company Accused of Fraud
Big fraud news today out of a small town in Texas
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(April 14, 2010 - Wednesday) - According to the Herald-Zeitung, the local New Braunfels newspaper, the Texas Commissioner of Insurance issued a cease and desist order Friday to the New Braunfels-based Retirement Values LLC.
The order comes just a week after the company was hit with a similar mandate by the Texas State Securities Board. Both bodies allege that the company defrauded some 800 investors by providing inaccurate and misleading expectations to investors. Authorities also allege that the company was not properly licensed to do business in the state of Texas.
Retirement Values LLC specializes in the re-selling of life insurance policies, or life settlement insurance. Basically the way the industry works is; buyers purchase the expiring life insurance policies of others. The buyers then pay the premiums on the policy and have an opportunity to make a profit if the former policyholder dies before their estimated life expectancy. If the former policyholder outlives expectations the buyer is stuck paying additional premiums on the policy.
The Texas securities board estimates that buyers have invested over $100 million in Retirement Values through the purchase of these types of policies.
Richard “Dick” Gray, the president of Retirement Values says that the company had complied with the mandate handed down by the securities board last week, saying the latest order is like “kicking someone after they’re already down.”
While the securities board’s order targeted only Retirement Values and Gray, the latest order is also directed at Midwest Medical Review – the company that provides Retirement Values with their life expectancy estimates.
Gray called the actions “outrageous” and warned that the Texas insurance industry will be impacted by the action. He also accuses the department of insurance of “over-reaching” their authority. “They are claiming authority that doesn’t now exist,” said Gray.
It is still too early to determine whether criminal charges will be levied or what the impact of the cease and desist order will have on investors, but to say the least it does not appear promising for any of the parties involved.
The investment fraud attorneys at the Hayes Law Firm are interested in speaking with individuals who have invested in life settlement insurance through Retirement Values LLC. If you have lost money you invested through Retirement Values we may be able to help recover your losses.
Contact us today for a free consultation with one of our experienced investment fraud lawyers.
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