RICHMOND, Va. (AP) – The head of a Costa Rican company charged in a $670 million insurance fraud scheme lied to investors about the firm’s financial assets and stability, a federal prosecutor told a jury Monday. But a defense attorney said the government’s evidence is lacking.
The jury heard opening statements in the trial of Minor Vargas Calvo, who is charged with conspiracy, wire fraud, mail fraud and money laundering. The trial is expected to last several days.
Vargas was president and majority owner of Provident Capital Indemnity Ltd., which agreed Friday to plead guilty to a single count of mail and wire fraud conspiracy.
Provident sold bonds guaranteeing funding for life settlement companies, which buy life insurance policies from insured people at less than face value and collect the benefits when those people die. The government says Provident sold bonds worth $670 million based on fraudulent financial statements from 2004-2010, with $40 million going directly into the company’s bank account.
“This case is about lies,” Assistant U.S. Attorney Michael Dry told the jury. He said Vargas told investors that Provident had hundreds of millions in assets that had been verified by an independent auditor, and that it had “reinsurance agreements” providing an extra layer of protection – all of which was untrue.
“The bottom line is it’s a crime to lie to get people’s money,” he said.