Another Florida Ponzi scheme has thousands of victims, feds say

More than four years after Mutual Benefits life insurance company was shut down by the feds, four organizers were indicted on charges that the company operated a Ponzi scheme that netted more than $1 billion.

Joel Steinger, Steven Steiner, Michael McNerney and Anthony Livoti, Jr. were charged Monday with conspiracy, mail fraud, wire fraud, and money laundering.

According to the U.S. Department of Justice, the life settlement company raised more than $1.25 billion from more than 30,000 investors before it was shut down in May 2004. Investigators said 28,000 victims lost approximately $837 million.

While victims lost their life savings, the accused lived lavish lifestyles as millionaires with expensive cars, horse farms and extensive international traveling, investigators said.

The scam worked by luring investors to buy a life settlement in which the buyer receives the benefits of a terminally ill or elderly person's life insurance policy. The purchase is profitable if the insured person dies before maintaining the policy becomes too expensive.

But according to the indictment, sales agents falsely promised safe investments without disclosing the risks. Prosecutors allege the men committed fraud by acquiring policies that could not be bought and sold, pressured doctors to approve life expectancy estimates and mismanaged the funds.

According to the indictment, the company was an unsustainable Ponzi scheme.

Michael McNerney is a Fort Lauderdale-based lawyer and Anthony Livoti is also licensed to practice law in Florida. Investigators say the ringleader is Joel Steinger, a felon who had been convicted of defrauding investors in the past and was running the operation even though he wasn't officially on the paperwork.

The scheme was investigated by the Department of Justice in Miami.