Robert N. Scola (J. Albert Diaz)
Fort Lauderdale attorney Anthony Livoti, who represented numerous police officers in legal matters, was sentenced Tuesday to 10 years in federal prison for falsifying documents in the $800 million Mutual Benefits Corp. viatical scam.
Livoti, who served as trustee for the company, rejected a three-year plea deal to become the only Mutual Benefits official of 13 facing criminal charges to go to trial. He was convicted last December of four of 24 counts, including conspiracy to commit fraud and money laundering.
After U.S. District Judge Robert N. Scola Jr. in Miami imposed the sentence, the 65-year-old Livoti stood up and asked him to reconsider, saying it was akin to a death sentence.
Scola reminded Livoti he faced a statutory maximum of 80 years in prison.
“I don’t think the people who lost money are going to be celebrating this sentence,” the judge said.
Prosecutors asked for a 30-year term, while Coral Gables defense attorney Joel Hirschhorn said he has never in his 47 years of practicing law had a client ask a judge to reconsider the sentence immediately.
From 1994 to 2004, Fort Lauderdale-based Mutual Benefits bought life insurance policies of seniors and fatally ill people at discounted prices and made money by collecting the full value when policyholders died.
The company said it was helping policyholders by providing them with much-needed cash before they died.
But advances in medications for HIV and AIDS devastated Mutual Benefits’ business model, and the brothers who ran the business turned it into a Ponzi scheme to keep money flowing, prosecutors and regulators charged.
The founding brothers, Joel Steinger ad Steven Steiner, lived luxury lifestyles. Steiner is serving a 15-year prison sentences. Steinger is awaiting sentencing.
Former president Peter Lombardi is serving 20 years in prison. General counsel Michael McNerney, who has been disbarred, is serving five years. Both men testified at Livoti’s trial.
Livoti portrayed himself as a patsy for Steinger and McNerney and said they repeatedly lied to him about the solvency of the business and life expectancy projections of policyholders.
Livoti told Scola how much time he and his domestic partner, Broward County schoolteacher Michael Porter, spent working with people with AIDS and HIV. The couple live in a modest home, and prosecutors acknowledge Livoti made about $800,000 in 10 years work at Mutual Benefits, a pittance compared to the millions pocketed by the brothers.
Livoti said he ignored red flags and turned his back on his ethics as an attorney. “I lost my way,” he said.
Porter, who gave an impassioned plea to Scola for leniency, said Livoti never would have gotten involved with Mutual Benefits if he didn’t see it as a way to help those with AIDS lead meaningful lives in their last days.
“It makes this case more than just a tale of greed,” Porter told the judge. He wept openly outside of court after the sentencing.
Former Broward Circuit Judge Robert Zack also spoke for Livoti, calling him a “lawyer’s lawyer.”
The courtroom was filled with former police officers supporting Livoti and his work for the Fraternal Order of Police.
Assistant U.S. Attorney Karen Rochlin asked Scola to send a message to both the victims and other attorneys by sentencing Livoti to 30 years in prison. She said Livoti played a crucial role in fleecing about 30,000 investors—many of them retirees—by vouching for Mutual Benefits, while McNerney simply helped hide Steinger’s criminal past.
“In this case, if you are a victim it’s because of this defendant,” Rochlin said.
Hirschhorn reminded Scola that his client lives a modest life while the brothers and McNerney reaped the financial benefits of the fraud. He said while Livoti used his cache as an attorney, he never gave legal advice or helped structure the fraud like McNerney.
Scola said Livoti was one of numerous professionals used to facilitate the Ponzi.
“Joel Steinger knew exactly how to manipulate people,” Hirschhorn said. “He was a master at it.”