On February 3, Joseph A. Caramadre, was ordered to pay $46.3M in restitution due to a case Caramadre plead guilty to on Nov. 1, 2013 in which he was sentenced to a prison term of 6 years.
From 1995 through December 2010, Caramadre was the President, CEO and majority owner of Estate Planning Resources, Inc. As part of the plea deal, Caramadre admitted to scheming 1) financial institutions, and 2) terminally-ill individuals.
What did he do? Caramadre purchased variable annuities that carried death benefits, payable if the annuitant died, from insurance companies and assigned terminally-ill individuals as the annuitants. He did not notify the family of the terminally-ill participant about the variable annuities purchased and kept the proceeds for his company. The death benefit is usually the initial amount invested plus any gain from the investment.
To find terminally ill patients Caramadre placed ads in the newspaper of the Roman Catholic Diocese of Providence promising $2,000 to all respondents -- those who went on to participate in the scheme received between $3,000 and $10,000. When prosecutors questioned the family members of the terminally-ill patients recruited for the scheme they claimed that even though their loved ones took the money, they didn't understand the full scheme. He is also accused of taking actionable steps to mislead family members.
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