Two men were each sentenced to 10 years in prison Wednesday in Austin, Texas, for charges related to life settlement fraud.
Howard Glen Judah, 82, of Houston, and Gregory F. Jablonski, 62, of Castle Rock, Colo., were each sentenced to 10 years in prison after pleading guilty last November to one count each of securities fraud and selling an unregistered security.
They both pleaded guilty in Harris County State District Court Nov. 26 to the charges and agreed to the 10-year sentence.
Judah was the CEO of National Life Settlements LLC, a Houston company that allegedly sold unregistered securities that were supposedly backed by the proceeds from the death benefits of life insurance policies.
Jablonski was a principal in the company.
National Life Settlements were charged by state officials after an undercover Texas Securities Board investigation.
The probe found that they falsely promised investors that its investments would pay a steady return of 8 percent to 10 percent a year through promissory notes backed by death benefits.
The company solicited money from retired and active state employees and teachers; millions of dollars were rolled out of retirement plans and into NLS investments, according to state Securities Board officials.
The probe led to a civil action that forced NLS into receivership in 2009. According to state Securities Board officials, investors received 69 percent of their money back as a result of the receivership proceedings. The investigation led to the indictments against Judah and Jablonski.