- Former GC Sentenced to 15 Years for Aiding Life Settlement Fraud; Defense Argued He Was Naïve
Former GC Sentenced to 15 Years for Aiding Life Settlement Fraud; Defense Argued He Was Naïve
Posted Jul 29, 2011 9:49 AM CST
By Debra Cassens Weiss
The former general counsel of a Houston life settlement company has been sentenced to more than 15 years in prison for aiding a corporate scheme that defrauded investors of $100 million.
Even the prosecutor described the defendant, Russell Mackert, as kind and mild-mannered, Corporate Counsel reports. Mackert's lawyer, Carolyn Grady, had argued "he was naive enough and not smart enough to look behind the curtain and see the fraud," according to an Associated Press account.
Mackert was one of five defendants sentenced last Friday after they pleaded guilty to misrepresenting the safety of investments in life insurance policies that paid benefits when the original policyholders died. The other four defendants got less time than Mackert, though their profits were greater. All had worked for A&O Resource Management, Ltd.
According to Corporate Counsel, Mackert created overseas shell companies to pretend to buy A&O as U.S. regulators began to probe whether it was selling unregistered securities. He also hired an actor who pretended to do due diligence, smuggled a $10 million cashier’s check past customs for a secret account benefiting A&O principals, and filed false affidavits in civil suits.
Prosecutors said Mackert earned about $500,000 in the scheme.