A top official of a national trade group that promotes investments in life insurance policies of terminally ill people was charged yesterday in an investigation of a Toledo firm suspected of bilking up to $95 million from investors nationwide.
Deborah Rhoades, identified by federal authorities as president of the National Viatical Association, was charged in U.S. District Court in Toledo with conspiracy to commit mail fraud.
She didn't return a call placed to her business in Loveland, Ohio, near Cincinnati, yesterday. Her lawyer, S. Reginald Jackson, Jr., of Toledo, wouldn't say whether Ms. Rhoades was cooperating in a federal investigation of Toledo's Liberte Capital Group, LLC. The attorney said, however, that he expects his client to make an initial appearance before federal Judge David Katz early next week.
Reached at the offices of the National Viatical Association in Washington, Valerie Cooper, executive director, said she was aware Ms. Rhoades was being investigated but did not know the extent of the problem.
She said Ms. Rhoades stepped down as the organization's president two months ago for health reasons.
The association director said Ms. Rhoades is well known and respected, and she expressed concern that the charges against her will further muddy the reputation of an industry that has been plagued with fraud but which offers a valuable service to investors and people with HIV and other potentially serious health problems.
“It's a blow to the industry,” Ms. Cooper said. The National Viatical Association represents 21 firms involved in an industry that links ill people seeking to cash in on life insurance policies with investors who pay a portion of a policy's face value for the right to collect the full death benefit.
Ms. Rhoades' alleged wrongdoing arose in the operation of her Loveland business, Viatical Clearing House, which acts as a conduit between ill people and investment firms that specialize in the field.
Liberte Capital owner J. Richard Jamieson, who has previously denied wrongdoing, hasn't been charged. His attorney, Steve Newcomer, couldn't be reached for comment. The firm, which was shut down by federal authorities last year, owes money to 2,500 investors nationwide, prosecutors say.
“The investigation is ongoing,” said Seth Uram, assistant U.S. attorney. He refused to comment on whether Ms. Rhoades, 50, was cooperating in the investigation.
The charges were made in a bill of information, which is used by federal prosecutors locally when a suspect agrees to plead guilty to a lesser offense.
Both Ms. Rhoades and Jeffrey Ploskonka, of Fort Lauderdale, Fla., who also was charged yesterday, have been identified in court documents as suspects in the Liberte Capital investigation.
Federal authorities yesterday didn't mention the local firm by name but referred to a “viatical settlement company in Toledo, Ohio.”
Prosecutors allege that Ms. Rhoades arranged the sale of 72 policies with death benefits of $4.5 million to the firm from 1996 to 1998.
She and other unidentified co-conspirators obtained coverage on people who hid their health problems from insurers and then re-sold the policies to investors without disclosing the deception or informing them that the deception could nullify the policies, prosecutors allege.
Mr. Ploskonka, 49, was among those who hid health problems to obtain insurance policies. Liberte Capital purchased six of those policies, worth $290,000. He was charged with conspiracy to commit mail fraud.
He is scheduled to make an initial appearance before U.S. District Judge James Carr May 2. His attorney, Jon Richardson, declined comment.