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Russell Mackert—described by friends, family, and even the prosecuting attorney as a kind and mild-mannered general counsel for A&O Resource Management, Ltd.—was sentenced last week to more than 15 years in prison for his role in a scheme that bilked investors of some $100 million. It was a bold scheme that saw Mackert, 52, create sham companies, make up the name “R.J. Stephenson” as a fictional representative, hire an actor who pretended to do due diligence on a sale, and slip $10 million in cashier’s checks past customs in Fort Lauderdale to deposit in a secret trust account in Nevis. He also lied to regulators, outside counsel, and company auditors, as well as investors. Mackert, who pled guilty, didn’t return messages. Court documents show that A&O was begun in 2004 by three principals, who also have been charged. Prosecutors said the company purported to buy life settlements from elderly people who had life insurance, and then sold interests in these deals to more than 800 investors by making false claims about the settlements’ worth and safety. By 2006, insurance and securities regulators were questioning whether A&O was selling unregistered securities. The principals hired Mackert in August of 2007 to evade the regulators and to reassure investors, prosecutors said. That’s when Mackert created a shell overseas company to pretend to buy A&O. Then he created another shell company to pretend to buy the first one. In January of 2008, he hid the $10 million in cashier’s checks and smuggled them to Nevis, where he had set up a secret account for the A&O principals. Then in the fall of 2009, Mackert placed A&O Entities into Chapter 11 bankruptcy. The company’s investors howled, and authorities dug deeper into A&O’s finances. Mackert and the others filed false affidavits under oath in the numerous civil cases that arose. But when law enforcement finally confronted Mackert, prosecutors said he freely confessed and cooperated with their investigation. He also “showed genuine remorse,” they said. In supporting a minimum sentence for the GC, U.S. attorney Neil MacBride, in eastern Virginia, said in a court memo that Mackert wasn’t the mastermind of the company. But he did use his expertise to help the company evade regulators while it continued to bilk investors of another $20 million-plus, MacBride added. Prosecutors said Mackert also misled regulators and others until he was confronted. But for all his efforts, Mackert earned only about a half-million dollars for himself, while the principals pocketed about $10 million each, prosecutors said. U.S. district court Judge Robert Payne in Richmond, Virginia, sentenced Mackert to the minimum under sentencing guidelines—188 months in jail, beginning in October. It was the longest sentence so far in the scandal, including for one of the principals, who received only 120 months. Another principal has been convicted and awaits sentencing; the third is awaiting trial. Judge Payne also ordered Mackert to pay over $27 million as his share of restitution to investors. But the payback could take awhile, because Mackert wasn’t well off to begin with. Prosecutors said he got involved in the A&O scheme because his private practice “was not especially successful.” He applied for and received a federal public defender in the case, and the court paid for his transportation from his home in Houston to the Virginia courthouse. His family noted that Mackert has lost his career and license to practice law. The judge said he could make payments at a rate of $250 a month once he has served his time and goes onto three years of supervised release.

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