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Estate Planning CEO, Employee Face Charges

Indictment Alleges Defrauding of Terminally-ill and Elderly
   PROVIDENCE, R.I. - 11/26/2011 - A Rhode Island attorney and an employee of his Cranston, R.I., estate planning company were charged in a 66-count federal grand jury indictment returned November 17 alleging that they conspired to steal and to use the identities of terminally-ill patients and elderly individuals to obtain more than $25 million in illicit profits from insurance companies and bond issuers.
   Attorney Joseph A. Caramadre, 49, president, CEO and majority owner of Estate Planning Resources, and Raymour Radhakrishnan, 27, an employee of Estate Planning Resources, are charged with conspiracy and multiple counts of mail fraud; wire fraud; identity theft; aggravated identity theft; and money laundering. Caramadre is also charged with one count of witness tampering.
   The two-year investigation and indictment were announced by Peter F. Neronha, U.S. Attorney for the District of Rhode Island; Richard DesLauriers, Special Agent in Charge of the FBI’s Boston Field Office; Robert Bethel, Inspector in Charge of the Postal Inspection Service (USPIS), Boston Division; and William P. Offord, Special Agent in Charge of the Boston Office of the Internal Revenue Service – Criminal Investigation (IRS-CI).
   The indictment alleges that Caramadre and Radhakrishnan made misrepresentations to terminally-ill and elderly patients and their family members in order to obtain their personal identity information. It is alleged 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. It is alleged that the defendants 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, it is alleged that Caramadre and others reaped substantial profits by exercising death benefits associated with the investments. The scheme allegedly generated more than $25 million in illicit profits.
   It is alleged that Caramadre launched the scheme in 1995. Radhakrishnan is alleged to have begun participating in the scheme when he was hired by Caramadre in 2007.
   According to the indictment, one means by which the defendants undertook their alleged scheme was to regularly place advertisements in the Rhode Island Catholic newspaper, offering a $2,000 charitable gift to people suffering from a terminal illness. It is alleged that Radhakrishnan met with individuals and their family members who responded to the advertisement and gave them money on Caramadre’s behalf, while, at the same time, making an assessment as to the life expectancy of the person. It is alleged that if Radhakrishnan believed the person was likely to die in the near future, he would tell them Caramadre had more money available for them. Radhakrishnan and Caramadre then allegedly either forged the terminally-ill person’s signatures or obtained their signatures on account opening documents by making misrepresentations and omissions about the nature of the documents.
   The indictment alleges that some terminally-ill people were misled when they were told their signatures were needed for receipts documenting Caramadre’s charitable gift.
   Others were allegedly misled when they were told that an account would be opened to benefit the terminally-ill person’s surviving family members, or that an account would be opened to benefit other families suffering from terminal illness. The indictment alleges that Caramadre and Radhakrishnan concealed from the terminally-ill people, their families and care givers that Caramadre and his investors stood to make a substantial profit from their deaths.
   In addition, the indictment alleges that Caramadre and Radhakrishnan made numerous misrepresentations to insurance companies, brokerage houses and other corporate entities. It is alleged that they falsely claimed that the terminally-ill people were clients of Caramadre’s law practice and that the terminally-ill people were not paid or given money to become annuitants. It is also alleged that the defendants misrepresented the financial assets and investment experience of the terminally-ill people; misrepresented the relationship between the terminally-ill people and Caramadre or his clients; that the proceeds of the accounts would go to the terminally-ill; falsely claimed that Caramadre paid for the terminally-ill people’s burial expenses at the request of the Catholic Church; and concealed Caramadre’s ownership interest in many of the investments.
   According to the indictment, Caramadre attracted capital from wealthy and prominent individuals and corporations as investors by telling them that he discovered a “loophole” which permitted the use of terminally-ill persons on variable annuities and as co-owners on joint brokerage accounts to be used to purchase death-put bonds. Caramadre allegedly entered into profit-sharing agreements with some of these outside investors, through which Caramadre allegedly received a significant percentage of all profits earned.
The indictment seeks the forfeiture by Caramadre of property derived from the scheme.
An indictment is merely an allegation and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
   The case is being prosecuted by Assistant U.S. Attorneys Lee H. Vilker and John P. McAdams of the District of Rhode Island.
   Source: Financial Fraud Enforcement Task Force

Pending Home Sales Rise in California in October

   LOS ANGELES - (BUSINESS WIRE) - 11/22/2011 - Pending home sales in California rose in October and were up from the previous year for the sixth consecutive month. Additionally, distressed home sales rose in October from both the previous month and year, the California Association of REALTORS® (C.A.R.) reported on Nov. 21.
   
Pending home sales

   California pending home sales climbed 3.1 percent in October and were up from a year ago, according to C.A.R.’s Pending Home Sales Index (PHSI)*. The index was 122.0 in October, based on contracts signed in that month, up from September’s index of a revised 118.2. The index also was up 10.7 percent from October 2010. October marked the sixth consecutive month that pending sales rose from the previous year. Pending home sales are forward-looking indicators of future home sales activity, providing information on the future direction of the market.
   “October’s increase in pending sales is encouraging, especially the six straight months of year-over-year increases,” said C.A.R. President LeFrancis Arnold. “Despite all the challenges the housing market has faced this year, California home sales continue to perform modestly well and should be on pace to match or better last year’s level.”
 
Distressed housing market data
  • At 53.9 percent, equity sales made up more than half of home sales in October, down from 55.5 percent in September and 55.2 percent in October 2010.
  • While equity sales have edged down from their peak of 57.1 percent in July 2011, they are up from the beginning of the year when less than half (46.5 percent) of sales were non-distressed.
  • The total share of all distressed property types sold statewide rose to 46.1 percent in October, up from September’s 44.5 percent and 44.8 percent in October 2010.
  • Of the distressed properties sold statewide in October, 20.7 percent were short sales, slightly up from the previous month’s share of 20.1 percent and up from last October’s share of 19.7 percent.
  • At 24.9 percent, the share of REO sales was up from September’s 24.0 percent, and slightly up from the 24.8 percent reported in October 2010.

Man Pleads Guilty to Mortgage Fraud Scheme

   CHARLESTON, W.Va. — 11/17/2011 - A Utah man pleaded guilty on November 10 in federal court before U.S. District Judge Thomas E. Johnston to charges connected to a multimillion-dollar mortgage fraud scheme involving properties at a Hurricane, W.Va., subdivision.
   Michael S. Hurd, 37, of Salt Lake City, pleaded guilty to conspiracy to commit wire fraud and bank fraud. The defendant also pleaded guilty to mail fraud arising out of his involvement in a similar scheme in Modesto, Calif.
   Hurd admitted that during the early and mid-2000's, he operated a company called "The Gift Program," which he described as a "seller funded down payment assistance program" used to provide home buyer's money to make the down payment and initial mortgage payments on real estate purchases. Hurd further admitted that he used The Gift Program to create an elaborate scheme to defraud lenders by concealing the transfer of loan funds to the borrower from the lender. In essence, through the use of The Gift Program, lenders unwittingly funded their own down payment and made the initial mortgage payments.
   Hurd admitted that in 2006 he became involved with Deborah and Todd Joyce of Hurricane in the "flipping" of homes in the Stonegate subdivision in that town. Deborah Joyce obtained inflated appraisals from two local appraisers, James Thornton and Mark Greenlee, and subsequently sent the appraisals on to another co-conspirator Raymond Morris in Salt Lake City. Morris identified investors to purchase those properties at fraudulently inflated prices. Morris then got those investors in contact with Hurd, who then used The Gift Program to conceal the transfer of a portion of the loan proceeds to the investor from the lender. Hurd admitted that he paid Morris an undisclosed "commission" for this referral.
   Hurd also admitted that during the scheme, he wired additional loan funds to the investor to make initial mortgage payments. Once those funds ran out, the investors defaulted on the loans and the properties went into foreclosure. All told, Hurd, Joyce and Morris illegally flipped six properties in the Stonegate subdivision. The respective lender losses total almost $2 million.
   At the same time, Morris and Hurd orchestrated a similar investment-type scheme in Modesto. Hurd acknowledged that he was involved in illegally flipping 20 properties with losses in excess of $5.5 million. As part of his plea agreement, Hurd agreed to transfer those charges from the Eastern District of California to the Southern District of West Virginia so the matters could be disposed of jointly.
   Hurd faces up to 60 years in prison and a $2 million fine when he is sentenced on Feb. 29, 2012.
   Deborah Joyce was sentenced in April 2011 to 46 months in prison for her role in the scheme. Todd Joyce received an 18-month prison sentence. Thornton and Greenlee are set to be sentenced in December 2011. Hurd's co-conspirator, Raymond P. Morris, was charged in September 2011 and his trial is set for Feb. 28, 2012.
   This case is being investigated by the FBI and the Internal Revenue Service – Criminal Investigation. Assistant U.S. Attorney Thomas Ryan from the Southern District of West Virginia is in charge of the prosecution.
   Source: Financial Fraud Enforcement Task Force, U.S. Department of Justice.

NIH Grantees Rebut Flu Strain/Tropics Theory

   (NIH) - 11/16/2011 - Influenza researchers have found that flu strains migrate back and forth between different regions of the world, evolving along the way. This is contrary to the common belief that flu strains from the tropics are the source of global seasonal epidemics.
   The research appeared online on Nov. 14 in the Proceedings of the National Academy of Sciences. It was supported in part by the Centers of Excellence for Influenza Research and Surveillance and the Influenza Genome Sequencing Project, funded by the National Institute of Allergy and Infectious Diseases (NIAID), part of the National Institutes of Health.
   "This study helps us to better understand why the persistence, movement and evolution of flu viruses are complex and largely unpredictable," said NIAID Director Anthony S. Fauci, M.D. "These findings also remind us of the importance of maintaining vigilance in our global influenza surveillance efforts."
   Previous studies had shown that in general, influenza viruses in tropical regions tend to be more varied and circulate year-round rather than seasonally, like flu viruses found in temperate regions with more moderate climates. The prevailing theory had been that tropical areas of the world may be the source of flu viruses from which new seasonal flu strains originate.
   To test this theory, researchers led by Justin Bahl, Ph.D., and Gavin J.D. Smith, Ph.D., of the Duke-National University Graduate Medical School in Singapore, genetically analyzed strains of H3N2 influenza virus, a common cause of seasonal influenza among humans, collected between 2003 and 2006. They sequenced the full genome of 105 flu virus samples from Hong Kong and compared these with H3N2 virus sequences obtained from seven geographic areas with varying climates, including five temperate regions (Australia, Europe, Japan, the United States, and New Zealand) and two tropical regions (Hong Kong and Southeast Asia). The strains were arranged into a phylogenetic, or family, tree, showing the relationships between the strains and how they evolved over time.
   "Earlier genetic studies had looked at H3N2 in a global context and concluded that new strains came from the tropics," said Dr. Bahl. "However, in those studies, a lot of key genetic data from the tropics was missing." This made it difficult to draw a firm conclusion about the origin of new flu strains, he said.
   The researchers found that in temperate regions where flu seasons are relatively short, many new H3N2 virus strains arise every year, but they rarely persist from one season to the next. However, in Hong Kong and Southeast Asia, where flu seasons occur for longer periods of time, strains do persist between seasons.
   Keeping these patterns in mind, the investigators traced the geographical movement of the strains to determine whether new flu strains actually originate in tropical regions. Instead, they found that influenza strains frequently migrate back and forth between tropical and temperate regions, and that the tropical regions were not necessarily the source of new strains.
   In fact, none of the seven temperate and tropical regions they examined was the source of all new H3N2 flu strains in a given year. The migration pattern was more complex. Virus strains moved from one region to several others each year, and flu outbreaks were traced back to more than one source. And although the virus that migrated between Southeast Asia and Hong Kong persisted over time, its persistence was caused by the introduction of virus from the temperate regions. Therefore, the tropical regions did not maintain a source for the annual H3N2 influenza epidemics. Further, in contrast to annual flu epidemics in temperate climates, relatively low levels of genetic diversity among flu strains, and no seasonal fluctuations were found in the tropical regions.
   "We found that the H3N2 influenza virus population is constantly moving between regions, and every region is a potential source for new epidemics," Bahl said. "Regions with more connections to others, such as travel centers, may contribute more to the global diversity of circulating viruses."
   The complexity of the global virus circulation found in the study suggests that efforts to control flu should include region-specific strategies, according to the researchers. In future studies, the researchers intend to examine whether the virus behaves differently in temperate and tropical areas, including regions not included in this analysis, and in places that are more or less connected to the rest of the world.
   The new findings build on earlier influenza virus evolution research funded in part by NIAID
   Source: National Institutes of Health.

Study Slams Proposed Switch To Dollar Coin

   WASHINGTON - (BUSINESS WIRE) - 11/12/2011 - A pivotal independent economic study released on Nov. 7 found the proposed Congressional legislation to drop the dollar bill in favor of the dollar coin will cost Washington businesses millions of dollars as well as jobs.
   The study, titled “The Economic Impact of a Transition from Dollar Bills to Dollar Coins on the Retail and Service Sectors of the United States Economy,” was conducted by the independent economics research firm John Dunham & Associates.
   Examining the financial and operational costs to 29 different retail and service sectors across the country, the study found a transition to dollar coins would increase annual costs in Washington by $4.48 million and lead to an estimated annual loss of $10.99 million in business activity, as well as costing jobs.
   Nationwide, the switch would increase annual costs by $201.85 million and lead to at least 4,300 job losses. In addition, these implications did not incorporate the additional capital expenses - new cash registers, change counting machines, cash drawers, larger safes, etc. - and costs to banks, money transfer companies and other financial firms.
   “Essentially, changing to a coin would be a tax increase on retail and service firms of all sizes in Washington,” said John Dunham, president of John Dunham & Associates. “Washingtonians are already struggling with a poor economy and high unemployment rates, and forcibly removing the dollar bill from circulation will only exacerbate these problems.”
   This independent economic study showed that the switch to the dollar coin would impact the private sector in Washington very negatively. There are no short- or long-term savings for Americans associated with abandoning the dollar bill in favor of a dollar coin.
   Correspondingly, a new public opinion poll conducted by Frank Luntz highlights Americans’ opposition to the switch. When given a choice between the dollar bill and the dollar coin, 83 percent of respondents favored the bill. The study also found:
  • 85 percent believe the public, rather than the government, should decide what kind of currency to use;
  • 73 percent felt that the switch to the dollar coin is a gimmick designed as a cost-cutting measure;
  • 97 percent believe the $1 bill is more convenient to carry than coins;
  • 64 percent oppose legislation designed to remove the $1 bill from circulation and only seven percent strongly support it.
   “I could not be more emphatic: the American people do NOT want a dollar coin. Period,” said Luntz. “To Americans, this move is just another gimmick disguised as a cost-cutting measure.”
   WASHINGTON- (BUSINESS WIRE) - 11/12/2011 - A pivotal independent economic study released on Nov. 7 found the proposed Congressional legislation to drop the dollar bill in favor of the dollar coin will cost Washington businesses millions of dollars as well as jobs.
   The study, titled “The Economic Impact of a Transition from Dollar Bills to Dollar Coins on the Retail and Service Sectors of the United States Economy,” was conducted by the independent economics research firm John Dunham & Associates.
   Examining the financial and operational costs to 29 different retail and service sectors across the country, the study found a transition to dollar coins would increase annual costs in Washington by $4.48 million and lead to an estimated annual loss of $10.99 million in business activity, as well as costing jobs.
   Nationwide, the switch would increase annual costs by $201.85 million and lead to at least 4,300 job losses. In addition, these implications did not incorporate the additional capital expenses - new cash registers, change counting machines, cash drawers, larger safes, etc. - and costs to banks, money transfer companies and other financial firms.
   “Essentially, changing to a coin would be a tax increase on retail and service firms of all sizes in Washington,” said John Dunham, president of John Dunham & Associates. “Washingtonians are already struggling with a poor economy and high unemployment rates, and forcibly removing the dollar bill from circulation will only exacerbate these problems.”
   This independent economic study showed that the switch to the dollar coin would impact the private sector in Washington very negatively. There are no short- or long-term savings for Americans associated with abandoning the dollar bill in favor of a dollar coin.
   Correspondingly, a new public opinion poll conducted by Frank Luntz highlights Americans’ opposition to the switch. When given a choice between the dollar bill and the dollar coin, 83 percent of respondents favored the bill. The study also found:
  • 85 percent believe the public, rather than the government, should decide what kind of currency to use;
  • 73 percent felt that the switch to the dollar coin is a gimmick designed as a cost-cutting measure;
  • 97 percent believe the $1 bill is more convenient to carry than coins;
  • 64 percent oppose legislation designed to remove the $1 bill from circulation and only seven percent strongly support it.
   “I could not be more emphatic: the American people do NOT want a dollar coin. Period,” Luntz said. “To Americans, this move is just another gimmick disguised as a cost-cutting measure.”

Study: Pre-birth brain growth issues tied to autism

   (NIH) - 11/9/2011 - Children with autism have more brain cells and heavier brains compared to typically developing children, according to researchers partly funded by the National Institutes of Health. Published in the Journal of the American Medical Association on Nov. 9, 2011, the small, preliminary study provides direct evidence for possible prenatal causes of autism.
   "Earlier studies of head circumference and early brain overgrowth have pointed us in this direction, but there have been few quantitative neuroanatomical studies due to the lack of post-mortem tissue from children with autism," said Thomas R. Insel, M.D., director of the National Institute of Mental Health (NIMH), part of NIH. "These new results, along with an earlier study reporting altered wiring of the prefrontal cortex, focus our attention on this critical area of the brain in autism."
  The prefrontal cortex is involved in various higher order functions such as language and communication, social behavior, mood, and attention. Children who have autism tend to show deficits in such functions.
   Eric Courchesne, Ph.D., of the University of San Diego School of Medicine Autism Center of Excellence, and colleagues conducted direct counts of brain cells in specific regions of the prefrontal cortex in postmortem brains of seven boys who had autism and six typically developing males, ranging in age from 2-16 years. Most participants had died in accidents, but the researchers did not base their selection on causes of death.
   To assist in this task, the researchers used a computerized tissue analysis system developed by co-investigator and NIMH grantee Peter Mouton, Ph.D., of the University of South Florida, Tampa, and colleagues.
   The researchers found that children with autism had 67 percent more neurons in the prefrontal cortex and heavier brains for their age compared to typically developing children. Since these neurons are produced before birth, the study's findings suggest that faulty prenatal cell birth or maintenance may be involved in the development of autism. Another possible factor that may contribute to the neuronal excess is a reduction in apoptosis, or programmed cell death, which normally occurs during the third trimester and early postnatal life.
   Though small, this preliminary study examined all relevant postmortem tissue available at the time. The relative scarcity of tissue from very young children may limit future research as well, but efforts to include a larger number of samples are needed to confirm these findings and to identify patterns of age-related changes in autism.
   This study was funded by Autism Speaks, Cure Autism Now, The Emch Foundation, the Simons Foundation, the Thursday Club Juniors, and the UCSD-NIH Autism Center of Excellence, which is supported by NIMH, the National Institute of Neurological Disorders and Stroke, and the Eunice Kennedy Shriver National Institute of Child Health and Human Development.
   The mission of the NIMH is to transform the understanding and treatment of mental illnesses through basic and clinical research, paving the way for prevention, recovery and cure. For more information, visit the NIMH website.

Survey: Investors Doubtful About GOP Candidates

   FT. LAUDERDALE, Fla. - (BUSINESS WIRE) - 11/3/2011 - Although many active investors are hopeful the end of 2011 will ultimately deliver a positive return from the stock market, they don’t appear to be banking on any of the Republican presidential candidates for long term economic recovery, according to a recent survey of approximately 240 independent investors conducted by online broker TradeKing.
   When asked which of the seven GOP presidential hopefuls would be the most effective in moving the economy forward, 36 percent of respondents said “none of the above,” with the leading contenders Romney, Paul and Cain garnering percentage points in the teens. Candidate Bachman came in last with less than one percent of responses.
   Overall bullishness rebounded this quarter, up to 33 percent from 15 percent in August, but still well below the high of 51 percent that was reported in January’s survey.
   The in-house survey was conducted October 26-31, 2011 via email to 4,000+ TradeKing clients, with an estimated 95 percent confidence level.
   Key highlights from the October 2011 survey:
Overall Market Sentiment
   Thirty-three percent of investors described themselves as either “bullish” or “very bullish” over the next three months, up from 15 percent in August, but still below the April (41 percent) and January (51 percent) figures.
   Twenty-two percent of investors described themselves as “bearish” or “very bearish,” down sharply from the 41 percent in August, but above the 11 percent in April and six percent in January.
   The remaining 45 percent described themselves as “neutral or not sure” regarding the market’s outlook.
   General optimism around the market’s 2011 performance has increased slightly, as 46 percent of investors polled said they expect the S&P to finish up 5-10 percent by the end of the year, up from 36 percent in August. However, the majority surveyed (51 percent) said the market would finish either flat or down 5-10 percent.
Economic Recovery
   When asked which of the current GOP candidates for president would be most effective in moving the economy forward, 36 percent answered “none of the above.” The candidates receiving the most positive responses were Romney with 16 percent, Paul also with 16 percent and Cain with 14 percent. All other candidates garnered less than 10 percent of responses.
   When asked what would be the most effective catalyst for jump-starting the U.S. economy, respondents put investments in the country’s infrastructure first (43 percent), tax cuts second (29 percent), the passing of the Jobs Bill and mortgage/foreclosure reform third (11 percent each) and more foreign trade fourth (4 percent). Twenty percent answered “other.”
   Unemployment Maintains Top Spot as #1 Trade Trigger; Investors Long on Energy and Technology, Short on Finance and Retail (Still)
   Among those investors surveyed, 43 percent ranked U.S. unemployment claims as their top trade trigger to watch for the next three months, followed by U.S. consumer spending at 39 percent and quarterly earnings results at 37 percent.
   When asked to pick the favored sectors for the next three months from a “long” position, respondents gave energy and technology strong endorsement as the top picks at 49 and 46 percent, respectively. This quarter, respondents once again picked the finance and retail sectors as having the most potential from a “short” position.

Photo by Steve Rensberry (c) 2014