White-Collar Crime

Acquitted on most counts, attorney nonetheless faces hefty sentence in $1B insurance fraud scheme

After eight days of deliberation, a federal jury in Miami on Wednesday acquitted a South Florida lawyer of 20 counts that he faced in a $1 billion insurance fraud case.

However, Anthony Livoti Jr. still likely faces a hefty sentence for money laundering, conspiring to commit fraud and two other counts on which he was convicted, the Miami Herald reports.

“Am I disappointed? Crushed,” defense attorney Joel Hirschhorn told the newspaper outside the courtroom. “He’s crushed. He really is crushed.”

Livoti’s trial is the only one that has occurred in the case. Ten other defendants, including another lawyer, pleaded guilty to roles in the scheme, and former Mutual Benefits chief executive Joel Steinger, the claimed mastermind of the alleged Ponzi scheme, is set for trial next year.

Prosecutors say some 30,000 investors funded a program in which Mutual Benefits purchased life insurance policies at a discount from individuals expected to die soon, because they suffered from terminal conditions. The company made sure the premiums were paid, they collected the full face value of the benefits when the policyholders died. However, these so-called viatical life settlements did not perform as well as promised, and the defendants were accused of making misrepresentations to investors and misusing their money.

Former Fort Lauderdale attorney Michael McNerney, who pleaded guilty and was disbarred as a result of his role in the scheme, is serving a five-year term. He testified at Livoti’s trial.

Hirschhorn says his client did nothing wrong and was unaware that Mutual Benefits executives were operating a scam. Livoti simply paid premiums as he was instructed to do, his lawyer says.

Livoti has been serving as general counsel for the Florida State Fraternal Order of Police, negotiating union contracts for officers.

Related coverage:

ABAJournal.com: “Jail Isn’t End of SEC Saga for Convicted Lawyer in $1B ‘Ponzi Scheme’”

ABAJournal.com: “Judge Reels Over Receiver’s $11M Bonus Request in Mutual Benefits Case”

We welcome your comments, but please adhere to our comment policy and the ABA Code of Conduct.

Commenting is not available in this channel entry.