by news staff
A well-known Rhode Island estate planner behind an investment fraud scam that preyed on the terminally ill was sentenced to six years behind bars on Monday morning.
53 year old Joseph Caramadre pleaded guilty to fraudulently obtaining $46 million from insurance companies and bond issuers by stealing the identities of terminally ill individuals for a period of over 15-years.
Caramadre was sentenced to six years behind bars with three years of supervised release to follow. During that three year period Caramadre will have to perform 1,000 hours of community service each year specifically in areas concerning the elderly and terminally ill.
29 year old Raymour Radhakrishnan, a second man also involved, was also sentenced in court today. He will serve 1 year and 1 day behind bars. According to the District Attorney, Radhakrishnan was also ordered by U.S. District Court Chief Judge William E. Smith to serve 3 years of supervised release upon completion of his prison term, the first six months to be served in home confinement, during which time he is required to perform 3,000 hours of community service to the elderly and terminally-ill individuals.
Caramadre was president, CEO and majority owner of
Estate Planning Resources in Cranston.
Judge Smith said he would determine restitution in this matter at a later date.
The DA says U.S. District Court Magistrate Judge Patricia A.
Sullivan previously recommended to Chief Judge
Smith that Joseph Caramadre pay approximately $46 million dollars in
restitution to insurance companies and bond issuers, and that
Radhakrishnan pay approximately $33 million dollars in restitution.
"Both men are going to prison for what they did, as they should," commented United States Attorney Peter F. Neronha. "The reality is that Joseph Caramadre saw death as a holiday. He saw it as a cause for celebration. He saw it as an opportunity to make money. Both defendants, particularly Mr. Caramadre, wrapped themselves in morality. Having sat through a week of trial and knowing as much about this case as I do, it is at best ironic. At its worst it is reprehensible."
From the District Attorney's Office:
According to information presented to the court, in the mid-1990s, Joseph Caramadre developed investment strategies that depended upon, among other things, the identity of terminally-ill individuals. On his own behalf, and on behalf of investors, friends and family members, Caramadre purchased variable annuities from insurance companies. The annuities offered death benefits upon the death of the person identified as the annuitant. These benefits included a guaranteed return of all monies invested plus, in many instances, a guaranteed profit and various other bonuses and enhancements.
According to information presented to the court, Caramadre and Radhakrishnan made misrepresentations to terminally-ill and elderly patients and their family members in order to obtain their personal identifying information. They used the information, including names, dates of birth, and social security numbers, to obtain more than 200 variable annuities and to open more than 75 brokerage accounts in order to purchase "death-put" bonds in the victims' names without their knowledge and consent. Caramadre and Radhakrishnan either forged the signatures of terminally-ill people on account documents or obtained the signatures by means of misrepresentations. When the terminally-ill person died, Caramadre and others reaped substantial profits by exercising death benefits associated with the investments. Under the terms of these bonds, the owner of the bond is able to redeem the bond years or decades prior to the maturity date upon the death of the bond's co-owner.
According to information presented to the court, Caramadre located terminally-ill individuals in various ways, including visits to AIDS patients at a House of Compassion, through family members and associates of the terminally-ill, and by soliciting individuals who were terminally ill to purchase life insurance policies. Caramadre also placed advertisements in a local Catholic newspaper that provided that there was a compassionate organization that would immediately give $2000 in cash to terminally-ill individuals. Dozens of terminally-ill individuals or family members responded to the ad. Caramadre gave Raymour Radhakrishnan, who began working for Caramadre in July 2007, the job of meeting with the people who responded to the ad for the purpose of obtaining their identity information and using that information on annuities and brokerage accounts.
"From Bernie Madoff to Mr. Caramadre and Mr. Radhakrishnan, devious schemes concocted for greedy purposes always end the same way," said Vincent Lisi, Special Agent in Charge of the FBI. "Others who think they can victimize people for personal gain without ending up in the same company as them should think twice because our team of agents, investigators and prosecutors who specialize in white collar crime can't be outmatched."
"What makes these defendants' conduct particularly disturbing is that they targeted individuals who were terminally ill," said Kevin M. Niland, Inspector in Charge of the U.S. Postal Inspection Service, Boston Division. "It's difficult enough when a family member loses a loved one; to have to endure the additional financial strain brought about by this type of scam artist is just not right. The U.S. Postal Inspection Service remains vigilant pursuing criminals like Mr. Caramadre, and bringing them to justice."
John Collins, Acting Special Agent in Charge, IRS Criminal Investigation stated, "Today's sentencing of Joseph Caramadre and Raymour Radhakrishnan brings to justice two individuals who have committed despicable crimes against our society. Not only have they defrauded insurance companies and financial institutions but they have taken advantage of a community of our most vulnerable citizens. Caramadre and Radhakrishnan benefited from a sophisticated scheme that preyed on terminally ill individuals and allowed them to line their pockets with the fruits of their crime. Individuals who commit identity theft and fraud of this magnitude and with this degree of trickery, dishonesty and deceit, deserve to be punished to the fullest extent of the law. This investigation highlights the positive impact on justice which is obtained through the collaborative efforts of multiple Federal law enforcement agencies and the U.S. Attorney's Office."
(C) WLNE-TV 2013