Joel Steinger, the mastermind behind an $800 million viatical scam run by Fort Lauderdale-based Mutual Benefits Corp., pleaded guilty Friday to fraud conspiracy in two cases pending against him.
Federal prosecutors charged Steinger stole tens of millions of dollars from the company that purchased life insurance policies of seniors and critically ill people. The business plan was to buy discounted policies and make money for investors when the policies matured.
Regulators charged Mutual Benefits faltered when HIV-infected people started living longer because of new medications. Steinger and his brother, Steven Steiner, then turned the enterprise into a Ponzi scheme, prosecutors said.
In a factual proffer signed by Steinger on Friday, he said he made false promises about returns and single-handedly made decisions on life expectancy projections for thousands of policies in a fraud that ran from 1994 to 2004.
“Many investors were falsely told that as many as 80 percent of all MBC policies matured on time or early,” according to the proffer.
Mutual Benefits was placed in receivership.
Steiner was sentenced in February to 15 years in prison for his role in the fraud. The company’s general counsel, Michael J. McNerney, also pleaded guilty and was sentenced to five years in prison.
Fort Lauderdale attorney Anthony Livoti Jr., who served as the trustee for Mutual Benefits, was convicted at trial last year of multiple counts of fraud and is scheduled to be sentenced Tuesday by U.S. District Judge Robert Scola in Miami.
Steinger once lived in a Fort Lauderdale waterfront mansion but has been held without bond for about 1½ years. He uses a wheelchair because of severe back pain, and prosecutors made arrangements for him to appear at a hearing on his medical condition last week via a video feed from the jail.
Under the plea agreement, the government will drop 24 other fraud counts against Steinger. Prosecutors claimed in the plea agreement filed Friday that there were 250 victims of the fraud.