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A Fort Lauderdale attorney pleaded guilty to fraud conspiracy for his dealings with viaticals company Mutual Benefits, possibly jeopardizing the defense of his three co-defendants. Attorney Michael McNerney pleaded guilty to conspiracy to commit mail and wire fraud, which carries a five-year prison term. Prosecutors have said Mutual Benefits was a $1 billion Ponzi scheme. McNerney had served as chairman of the University of Florida Law Center board and the Fort Lauderdale Chamber of Commerce’s downtown council. Company executives Joel Steinger and Steven Steiner and attorney Anthony Livoti Jr. are scheduled for trial in 2013. Mutual Benefits purchased life insurance policies from seniors and fatally ill people at a discounted price and cashed them in for large profits when they died. But the company turned to fraud after buying policies from HIV-positive people whose lives were lengthened when better treatments became available, prosecutors say. Ten defendants have pleaded guilty to crimes associated with Mutual Benefits. McNerney’s plea proffer states he participated in the scam from 1995 to 2004 and kept information from other partners at his former law firm, Brinkley McNerney Morgan Solomon & Tatum. “Over time, McNerney came to believe that half-truths, knowingly misleading statements, omissions and concealment, were acceptable as means of advancing the interests of MBC,” the proffer states. McNerney, who served as Mutual Benefits escrow and closing agent, previously filed an affidavit saying he would testify for co-defendants that they relied on his legal counsel. “That defense is difficult if not impossible now that McNerney has pleaded guilty and admitted he was a participant in the scheme,” said attorney Andrew Levi, who prosecuted the case before going into private practice in January as head of the Miami office of the investigative firm Nardello & Co. Joel Hirschhorn, an attorney with Hirschhorn & Bieber in Miami who represents Livoti, said he doesn’t believe his client’s defense will be affected. “Whatever Michael McNerney withheld from his law partners, I’m fairly certain he withheld from Tony Livoti,” Hirschhorn said. Levi said the McNerney plea has implications for any attorney who represents a criminal client. “It sends a message that attorneys have to be vigilant in assisting clients engaged in wrongdoing,” he said.

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