Florida Department Is Sued Over Viatical Company Practices

“As time went on (the Florida department) received more information that substantiated there was a fraud and they never took any action, so they allowed further investors to put their money into something completely bogus.”

Tami Torres, press secretary for the Florida department, says the department wont comment on the suit, filed Sept. 9, until it has “had an opportunity to review whats in the suit.”

The plaintiffs, a married couple and two individuals living in Florida, are seeking class-action status and $117 million in compensatory damages.

The suit also alleges that the department was likely bribed into closing its eyes to what was going on.

American Benefits Services and Financial Federated “executives were initiating a concerted program to curry political favor with high-ranking officials from the DOI and another branch of state government, the Department of Banking and Finance,” the suit says.

Schwartzman explains he has no hard evidence to that effect; his argument is based on inference.

“There was a lot of contact between regulators and the officials of this company and the timing and nature of the contact is suspicious on certain levels,” he says. “It would raise the inference that there was potential that those contacts were responsible for the lack of actions.”

The state has 40 days to respond either with an answer or a motion to dismiss on legal grounds.

Reproduced from National Underwriter Life & Health/Financial Services Edition, September 23, 2002. Copyright 2002 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.