Death takes a policy: How a lawyer exploited the fine print and found himself facing federal charges

A Rhode Island financial planner and lawyer, Joseph Caramadre, has been charged by the feds with 66 counts of fraud, conspiracy and identify theft in relation to a scheme to get him and his clients to profit from the guaranteed death benefits in variable annuities (VA). Prosecutors allege Caramadre exploited a loophole in the VA contracts that did not require the investor in the VA and the annuitant to be the same person. Caramadre allegedly enticed dying people to give up their vital information for $2,000 so they could serve as the annuitant. When that person died, the investor/beneficiary would receive the death benefit. Several insurance companies, including Nationwide and Transamerica, have sued Caramadre, who contends he acted as a “Robin Hood.” So far, the civil courts have ruled against the insurers.

A criminal trial is to begin in November.