A state-appointed receiver has seized the accounts of National Life Settlements L.L.C.

The Texas State Securities Board announced the seizure, charging that the company sold more than $20 million in fraudulent life insurance settlement contracts to retired state employees, retired teachers and other Texas investors.

State District Court Judge Suzanne Covington of Travis County appointed the receiver at the request of Texas Securities Commissioner Denise Voigt Crawford and Texas Attorney General Greg Abbott.

The agencies allege that the NLS investments were fraudulent and sold by unregistered brokers and agents.

In court documents, the Texas State Securities Board says investors deposited about $20 million with NLS from November 2006 through the end of 2008. About $2.7 million of the total came from the retirement accounts of former teachers and state employees, according to the court papers.

The board says NLS advertised the investments and sold them in Houston, central Texas and other areas.

The court-appointed receiver has taken control of about $19 million in bank accounts under the control of NLS and company officials, according to officials in Crawford’s office.

Regulators say in court documents that NLS returned only $3 million to investors over 2 years but paid more than $3 million in commissions to unregistered securities salespeople. NLS also paid nearly $900,000 to company official Howard Judah, including $230,000 for Judah’s salary. Another official, Gregory Jablonski, and his company, JCJ and Associates, Castle Rock, Colo., was paid more than $650,000, according to regulators.

Bank records fail to show that NLS bought any life settlement insurance policies during any of the time that it was raising money from investors, according to court papers.

NLS told investors it would buy life policies and use the proceeds to fund an investment trust that would pay guaranteed returns of up to 10% per year for 5 years, state officials say.

Investigators say the defendants were about to start selling membership interests in special purpose limited liability companies.

Neither Judah nor Jablonski could be reached for comment.