U.S. SEC Charges Brokers In Scheme To Profit From Terminally Ill
WASHINGTON, March 13 (Reuters) - U.S. securities regulators filed civil charges against two brokers and seven others, saying they were involved in a scheme to profit from the death of terminally ill patients through variable annuity sales.
The Securities and Exchange Commission's complaint, filed on Thursday as an administrative action, says Los Angeles-based broker Michael Horowitz, 39, was the mastermind behind the scheme to exploit people nearing their death.
Variable annuities are investment vehicles designed to help retirees maintain a source of income.
Typically, insurance companies who sell the annuities will agree to make periodic payments to people who purchase the product.
But another common feature offered is a death benefit, in which the insurer pays the policyholder's beneficiary under certain conditions.
According to the SEC, Horowitz recruited people to help him steal personal health information from hospice and nursing home patients so he could designate them as annuitants and sell the products to wealthy investors.
The SEC said that at least 16 terminally ill hospice patients who were designated as annuitants had no family or business relationships with the investors who ultimately bought the products.
Among the people he recruited was another broker, Moshe Marc C