RICHMOND, Va. (AP) — Documents in a federal fraud case list Virginia Democratic gubernatorial nominee Terry McAuliffe among scores of those who invested with a Rhode Island estate planner who profited from death benefits paid on policies issued on terminally ill people without their knowledge.
A 2011 fraud, conspiracy and identity theft indictment alleged Joseph Caramadre and an aide stole terminally ill people’s identities and used them to falsely secure annuities or bonds that paid off when those people died.
Prosecutors produced the list Wednesday in a hearing for Caramadre and the associate, Raymour Radhakrishnan, who each pleaded guilty to wire fraud and conspiracy counts in November.
There is no allegation of wrongdoing by McAuliffe or that he or other investors knew of efforts to defraud the terminally ill. The Associated Press withdrew a story Wednesday night that said McAuliffe was accused in court documents of having lied to a federal investigator looking into the benefit scheme; those documents referred to someone by the initials “T.M.,” but did not identify McAuliffe as that person.
Campaign spokesman Josh Schwerin said McAuliffe was a passive investor with no knowledge of the actions of Caramadre, “who, at the time, was widely respected by business leaders and elected officials. The allegations are horrible and he never would have invested if he knew he was being deceived.”
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The campaign donated $27,000 to the American Cancer Society and Terry McAuliffe personally gave $47,000 to the organization, Schwerin said.
McAuliffe’s name appears on a long list of Caramadre’s investors that prosecutors released during a restitution hearing in U.S. District Court in Providence, R.I., to support their claim that the scam cost insurance companies more than $46 million.
Prosecutors say Caramadre and Radhakrishnan took out variable annuities and so-called “death-put” bonds that would pay out when a person died. Authorities say they lied to terminally ill people to get personal information that was used to purchase bonds and annuitiesin their names without consent.
The list became public just 27 days before Election Day in the only competitive governor’s race this fall. Recent polling shows McAuliffe has gained a slight lead over Republican Ken Cuccinelli in a contest that had been close.
Cuccinelli’s campaign pounced on the list. Cuccinelli’s chief political adviser, Christopher J. LaCivita, called it “yet another glaring example of Terry McAuliffe doing business with highly dubious individuals.”
The identity of McAuliffe and other investors remained unknown until prosecutors presented Caramadre’s list of clients and investors Wednesday.
The Providence Journal reported Wednesday that other Caramadre investors on the list included the law firm of a former Rhode Island Supreme Court justice, the former police chief of Cranston, R.I., and an officer in charge of planning and financial services for the Roman Catholic Diocese of Providence.