April 22, 2010
Davie, Florida Insurance Agent Arrested After Scamming Elders Out of Millions of Dollars
TALLAHASSEE - Florida CFO Alex Sink and State Attorney Michael McAuliffe today announced the arrest of Steven Brasner, a Davie, Florida insurance agent, for knowingly making material misrepresentations on life insurance applications, agent certifications and financial statements resulting in the receipt of close to $2 million in commissions with death benefits of $78 million.
"Seniors in our state are being targeted by scammers every day," said CFO Sink. "I put together the Safeguard our Seniors taskforce to help identify ways to better protect Floridians and put senior scammers behind bars. We've already recovered nearly $9 million for seniors and today we're holding this senior scammer accountable for his deception."
Insurance Agent Steven M. Brasner of Infinity Financial Group, L.L.C. in Boynton Beach, Florida was arrested following an investigation by CFO Sink's Division of Insurance Fraud (DIF) and the State Attorney's Office, Fifteenth Judicial Circuit, on charges stemming from his insurance practices in Palm Beach County, Florida.
According to the probable cause affidavit, after receiving a tip from AXA Equitable Life Insurance Company (AXA), the Division of Insurance Fraud (DIF) opened an investigation. The investigation confirmed Brasner submitted life insurance applications using false information regarding prospective insured's net worth and had pre-arranged for the life insurance policies to be sold on the secondary market in a manner to disguise the fact that they were intended to be Stranger Originated Life Insurance, commonly known as STOLIs.
Further, the affidavit alleges that AXA's life insurance policy files contained life insurance applications for 5 seniors over 65 years old as well as certifications by Brasner indicating that the policies would not be sold or transferred for any type of pre-death financial settlement, such as viatical settlement, senior settlement, life settlement, or other secondary market. The policy death benefits total $78 million, on which Brasner earned commissions amounting to over $1.6 million.
All of the elderly AXA consumers applied for life insurance under Brasner's direction with the intention of selling the policies at a later date. Brasner explained to them that there were no out of pocket premium expenses and he offered to pay them between three (3) to five (5) percent of the face value of the life insurance policies, after the two year contestable period when they were sold on the secondary market. Many of the insureds also stated that Brasner made misrepresentations on applications prepared by him and that their income and net worth were grossly inflated on the financial statements that had been sent to AXA by Brasner. Further investigation revealed an additional life insurance application accompanied by an Agent certification containing the material misrepresentations, which was written by Brasner for another elderly female consumer who was also over sixty-five (65) years old at the time of the application. The $6.5 million life insurance policy was placed with Transamerica Occidental Life Insurance Company, now known as Transamerica Life Insurance Company, TLIC.
Some of the unforeseen pitfalls of a STOLI transaction for seniors include:
- Unknowingly participating in a fraud scheme (such as the Brasner case) where the life insurance application contains fraudulent information regarding the seniors' net worth, health and/or the intent or insurable interest of the transaction.
- Proceeds or forgiveness of loans and incentives related to the no-cost insurance from a STOLI transaction may cause unforeseen tax consequences.
- Investors may claim damages against the senior if the policy is rescinded due to misrepresentations on the application.
- A STOLI transaction may max out a senior insurability and leave them unable to procure additional life insurance should the need arise.
CFO Alex Sink met with some of the victim/witnesses of the Brasner STOLI scheme at the Safeguard Our Seniors Task Force Meeting hosted by State Attorney Michael McAuliffe in West Palm Beach in January of this year.
Brasner was arrested at his place of business, Infinity Wealth and Marketing, LLC and booked into the Palm Beach County Jail. He is charged with 7 counts of Grand Theft over $100,000 in violation of s. 812.014(1)and(2)(a) (maximum penalty of 30 years per count), 4 counts of Grand Theft over $20,000 in violation of s.812.014(1) and (2)(b) (maximum penalty of 15 years per count), 1 count of Grand Theft in violation of s. 812.014(1) and (2)(c) (maximum penalty of 5 years), 8 counts of Insurance Fraud in violation of s. 817.234(1)(a)3 (maximum penalty of 15 years per count), one count of Organized Scheme to Defraud over $50,000 in violation of s.817.034(4)(a)1 (maximum penalty of 30 years) and one count of Aggravated White Collar Crime in violation of s. 775.0844(5) (maximum penalty of 30 years).
To learn more about the Safeguard Our Seniors Task Force or what to consider when purchasing life insurance, visit www.flseniors.net. Senior Floridians who believe they may have been the victim of fraud should call 1-877-My-FL-CFO or log on to www.MyFloridaCFO.com to file a complaint.