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Subj: Fraud Report
Date: 01/31/2000
To: gov.pataki@chamber.state.ny.us
CC: Jeep48brn@aol.com,
cmcnenny@doi.state.in.us
CC: walkerr@sec.gov, jose_montemayor@tdi.state.tx.us
Governor George E. Pataki
State Capitol
Albany, NY 12224
Dear Governor Pataki:
During late 1997 the Assistant Director of the
SEC, Mr. Joseph Dimaria, confirmed that my insurance company (MONY) had filed false financial statements with the SEC. On
Sept. 9, 1998, MS. Carmen J. Lawrence, Regional Director SEC/NY confirmed that the SEC could not produce an accurate financial
statement for MONY. On Feb. 4, 1999, the Wall Street Journal reported that the SEC was investigating MONY's accounting practices.
In June 1999 Attorney General Eliot Spitzer and Assemblyman Paul Tonko announced a settlement of a claim against MONY for
more than a million dollars for a fraud against dairy farmers in New York at the same time the Connecticut Department of Insurance
settled their dairy farmers claims for $1.25 million and total fines of $175,000.
On January 1, 2000, the NY
times reported that the IRS Tax Court had determined that one of MONY's Board Members, Mr. Claude Ballard (a former associate
of Neil Levin), had taken $13,000,000 in kickbacks from 4 real estate developers between 1970 and 1988.
On January
6, 2000, the SEC reported 8,064 violations of independence by MONY's "independent" auditor PricewaterhouseCoopers L.L.P.!
During 1996 the Florida Department of Insurance investigated MONY's financial statements and found more than a billion dollar
in unallowable assets had been claimed as assets.
Attached is a copy of a suspected fraud report I made to the Indiana
Department of Insurance against the New York Department of Insurance and Superintendent Neil D. Levin concerning the fraudulent
examination report that Mr. Levin has caused to be made a part of the government records in all 50 states.
My family's
insurance policies have decreased in value by more than $4,000,000 as the result of this fraud! I would like to obtain
an accurate and properly opined financial statement, as required by law, for MONY. Can you help me obtain such a document?
Please do not hesitate to contact me if you have any questions or I can be of assistance in any way. Your help will
be greatly appreciated!
Respectfully,
R. Dale Abshire
4316 Pembrooke Pkwy N.
Colleyville, Texas 76034
817 267-2020 fax 817-267-5055
___________________________________________________________
MONY Paying $2.43 Mln
to Dairy Farms Hurt by Insurance Fraud
New York, June 23 (Bloomberg) -- Mony Group Inc., a New York- based life
insurer that went public last year, agreed to pay $2.43 million to compensate dairy farmers who enrolled in an insolvent
life insurance plan starting in 1982.
The farmers bought an insurance and retirement saving plan through Moser Farms,
the dairy near Hartford, Connecticut, to which they sold milk, according to a statement from New York Attorney General Eliot
Spitzer.
The plan, called the Moser Farms Producer Security Plan, was first sold in 1982 by agents affiliated with
Mony, then called Mutual Life Insurance Co. of New York. In return for regular contributions, the plan offered life and disability
insurance, as well as retirement income.
By 1997, the plan ran out of money, New York officials said.
``The
plan failed to make promised payments,'' and the 61 people who enrolled in it ``thought they would never recover the
money they put into the plan,'' Connecticut Insurance Commissioner George M. Reider Jr. said in a statement.
Mony
spokesman Charles Wasilewski described the situation as an ``isolated incident'' and said the agents involved have
been fired. ``We're glad the issue's resolved and we can move forward to refunding the moneys with interest.''
Connecticut
officials said Mony agreed to pay farmers in the state $1.25 million. The state will receive $75,000 in fines and
compensation. New York farmers are getting $1 million and the state will receive $100,000 for its costs.
A
spokesman for Spitzer said the New York attorney general is still investigating and declined further comment.
The
plan was organized by Benjamin Moser, the owner of Moser Farms, which was the owner and beneficiary of the life insurance
policies, according to Connecticut regulators.
Jun/23/1999 19:34
___________________________________________________________
___
Spitzer / MONY news articles:
$1 MILLION RECOVERED FOR UPSTATE DAIRY FARMERS
Dozens of Farmers Would Have Lost
Retirement Savings in Fraudulent Financial Plan----->Attorney General Eliot Spitzer and Assembly Member Paul Tonko today announced
a $1 million settlement for a group of upstate dairy farmers who unknowingly invested in a fraudulent financial plan.Beginning
in the early 80s, farmers from the Mohawk Valley, Capital District and Central New York invested in a financial plan offered
by four agents from Mutual of New York (MONY). The plan was supposed to provide retirement and death benefits. By 1997, however,
the plan had run out of money and benefits were no longer being paid to members. In announcing the settlement with MONY, Spitzer
said: "I'm delighted that we've been able to recover the money and return some piece of mind to the farmers. These are all
honest, hard working individuals who had invested a significant portion of their earnings in what they believed to be a reputable
plan. This settlement will help restore financial stability for many farm families." Assembly Member Tonko said: "I am pleased
to work with Attorney General Spitzer on behalf of so many dairy farmers to help return their hard-earned dollars. I applaud
the Attorney General for his determination to pursue this case so aggressively, and give much needed attention to New York's
largest industry."More than half of the dairy farmers who entered the plan are now of retirement age. Under the settlement,
the farmers will receive an average refund of between $25,000 and $35,000, depending on their age and the amount they
contributed. These funds can be obtained either as a lump sum or as an annuity contract, which is approximately equal to what
a reputable plan would have paid the farmers over the same period of time.In response to the settlement, the president of
the group of farmers, Bob Dygert of Nolliston in Montgomery County, said: "A year ago, we were frustrated that no one was
helping us, now we're happy to see that the Attorney General really came through for us."The farmers were independent contractors
who sold their milk to Moser Farms, a processor based in Rockville, Connecticut. The financial plan was put together by MONY
agents and offered to the dairy farmers by Moser Farms owner Benjamin Moser. In addition to the $1 million payment, MONY
will also pay $100,000 to the Attorney General's Office for costs and disbursements. Spitzer commended MONY for working
with his office in resolving the case, which was handled by Jean Cho of the Attorney General's Investor Protection and Securities
Bureau. A similar settlement for farmers in the state of Connecticut was being announced today in Hartford. Spitzer's office
cooperated with the Connecticut Attorney General and Connecticut State Insurance Department on the case
_________________________________________________________AG:
MONY to repay local towns
By STAN FISHER, Special to The Press November 16, 2000
HARTFORD -- MONY Life Insurance
Co. will repay 10 Connecticut towns and an emergency communications organization amounts ranging from "hundreds of thousands
to perhaps millions of dollars" to settle a state investigation of an allegedly fraudulent pension plan scheme.
MONY will
also pay a $250,000 fine.
"This unconscionable scheme was primarily designed to line MONY’s pockets with
hard-earned taxpayer dollars rather than provide benefits to municipal workers," state Attorney General Richard Blumenthal
said Tuesday.
The settlement, announced by Blumenthal and Susan Cogswell, commissioner of the state Department of
Insurance, resolves claims that MONY sold pension plans for volunteer firefighters and medical personnel that could not pay
the benefits promised without the towns paying hundreds of thousands of dollars more than the purported cost of the insurance.
MONY officials could not be reached for comment on the agreement.
The state investigation was triggered by
a complaint filed last year by Killingworth First Selectman David LeVasseur, after the discovery that MONY had sold the town
an actuarily and financially unsound pension plan for its volunteer firefighters and medical personnel, Blumenthal said.
Virtually
the same plan sold to Killingworth was sold to 10 other Connecticut towns or volunteer organizations -- Bethany, Old Lyme,
East Haddam, Madison, Guilford, Orange, Chester, Haddam, Bloomfield and Valley Shore Emergency Communications of Westbrook
-- by the same agent, William Adams, Blumenthal said.
Most of the towns have discontinued the policies when the company
failed to produce the promised benefits, Blumenthal said, but Bethany, Old Lyme, and East Haddam continue to use MONY policies,
Blumenthal and Cogswell said. Killingworth is setting up its own pension plan after receiving a $595,000 payment from
MONY in May to settle a federal lawsuit brought by the town.
The settlement calls for Bethany to receive roughly $500,000
and Old Lyme a payment estimated at $600,000, while MONY must return to East Haddam its premium payments plus 8 percent
interest until the policies are cancelled. The other towns will receive the difference between prior settlements and a return
of premiums plus 8 percent interest, Blumenthal said. The communities have 90 days in which to decide whether to accept the
agreement.
MONY also is required to pay the state a fine of $250,000, and disclose any other municipalities or
other entities to which MONY sold life insurance, state officials noted. Blumenthal said the 11 towns were those which responded
to his inquiry about MONY policies after the filing of the Killingworth complaint.
While the plans were sold by Adams,
Blumenthal said, "I feel strongly insurance companies are responsible for the actions of their agents. MONY either knew or
should have known what Adams was doing, and they certainly knew" after towns started complaining. After MONY fired Adams,
the company continued to bill the towns for premiums for the fiscally unsound pensions, he said.
The settlement is
the second reached by the state with MONY. In 1999, the insurer repaid $1.25 million for pension plans sold to 23 Connecticut
dairy farmers, and paid $75,000 to the state in fines and costs.
_________
To: cmcnenny@doi.state.in.us
CC: heyld@sec.gov
File:
C:\AOL30A\AMERIC~1.0\MISC\TEMP\LEVITT1.ZIP (7948 bytes)
DL Time (26400 bps): < 1 minute
Ms. Colleen McNenny
Chief
Deputy Commissioner
Consumer Protection Unit
Indiana Department of Insurance
Dear Ms. McNenny:
RE: Your letter of April 9, 1999
Thank you for responding to my 2-8-99 request for information concerning the last
examination of The Mutual Life Insurance Company of New York as of December 31,
1996, which you received on October 26,
1998.
Please consider this letter as a report of "suspected fraud" as mandated by Article 1.10 D of the Texas Insurance
Code.
BACKGROUND
During the early 1980s MONY sustained heavy
financial losses as the result of a failed attempt at expansion into the financial services industry. In an effort to recoup
the losses, MONY's management team concocted a number of schemes to circumvent state insurance laws and adopted a "shoot it
all" attitude with policyholders funds. Those laws were designed to protect policyholders by limiting investments in risky
investments such as real estate and junk bonds. Management also introduced ill conceived insurance products designed to provide
immediate cash flow to the company while encouraging current policyholders to roll their existing polices into the new "investment
grade" contracts that would yield greater future dividends. This allowed for a shifting of current dividend obligations to
later years. These "investment grade" life insurance policies were a "PONZI" scam.
Example: In 1985 Mr. Brown purchased
a $100,000 MONYCOMIZER policy on his
3 yr. old son for an annual premium of $354.00. The illustration,
which
MONY's actuaries claimed to be "CONSERVATIVE," shows Mr. Brown
stopping his
payments after just 9 years for a total out of pocket expense
of $3,186.00. Seventy-two years later
at age 75 the illustrated surrender
value is $962,805.00 and the death benefit has grown to $1,372,233.
After Mr. Brown had fulfilled his obligation he was informed that he would
need to
continue to pay. He received a ledger showing him paying the
premium for 72 years and receiving age 75
surrender benefits of $314,153
and a death benefit of $454,453.00. In essence, he now has to pay
8
times the premium to receive 1/3 of the benefit.
The New York Department of Insurance knew
the shaky financial condition of MONY and that it was highly unlikely that they could ever pay anywhere near the dividends
that were being illustrated. With total disregard for the public's interest, the New York Department of Insurance granted
approval for the sale of these products to the public. Every other state followed suit and approved the products.
The
company gave guaranteed profit / buybacks to "front men" who invested in real estate and junk bonds to enable the company
to exceed the limits allowed by law. The schemes began to unravel during 1987 as the result of the S&L failures and real
estate crash. The New York Department of Insurance was aware of the problems and violations of law that had occurred at MONY.
A new management team was brought in to cleanup the mess that lawlessness and failure of the regulatory system had created.
The "New Management," with the full knowledge of the illegal activities of prior management and the New York Department of
Insurance, took full advantage of the opportunity to line their pockets. MONY's former Senior Executive Vice President and
number two person in the company, Mr. Albert J. Schiff, has testified that the company used erroneous accounting practices
and admitted under oath that he had received more than a million dollars when he left the company in 1989, none of which was
reported on the Schedule G as required by New York law.
During the early 90's, I became aware of a secret "Phantom
Stock Plan" for officers of the company that was not disclosed on the financial statements. I also learned that the Schedule
G filings to the state of New York had been intentionally falsified to hide millions of dollars in compensation paid to individuals
and to cover-up a multimillion dollar money laundering scam in the Los Angeles agency during 1991. An officer of the company
admitted in March of 1995 that the scam was for a "War Chest" and that the President of the company, Samuel J. Foti, had given
the order to "take" the money. I also learned that Mr. Foti had falsified his credentials upon his arrival at MONY and that
he did not have a degree from Oxford nor did he have an MBA from the Wharton School of Business as published in the company
newspaper.
As a policyholder, I was shocked when an officer of the company told of Mr. Foti's longtime affair with his
secretary and that at one company meeting in Atlantic City, he had slapped her around and bruised her face. I later heard
the same story from a close friend of hers. As a policyholder, whose dividends were being slashed during this time period,
I found it disgusting to read the deposition testimony of California agents and members of management concerning the sexual
misconduct of MONY board members and officers including the current Chairman.
In late 1994 I obtained a copy of the
1992 audit of the company by the New York, Georgia, Oklahoma and Nevada Departments of Insurance which was done in accordance
with N.A.I.C. guidelines. The audit, which, revealed hundreds of millions of dollars in illegal transactions and erroneous
accounting practices made no mention of the Secret Phantom Stock Plan and the millions of dollars that had been "looted" from
the company as a result of the illegal activities. The New York Department of Insurance first denied any knowledge of the
Phantom Stock Plan and denied having any documents relating to the plan. Mr. William Tardogno of the New York Department
of Insurance later admitted that the examiners had audited the plan and that it was a "sweetheart deal" for the officers and
involved lots of money. He also confirmed that MONY's financial statements were definitely false and that they had not filed
proper amendments as required. The New York Department of Insurance then granted "Trade Secret" status to the Phantom Stock
Plan and refused to produce any information. During Feb of 1995, as mandated by Article 1.10 D of the Texas Insurance Code,
I reported suspected fraud to the Texas Department of Insurance. The investigator repeatedly stood up appointments with witnesses
and did nothing. Later I became aware of the repeated Grand Jury investigations of the Fraud Unit at the Texas Department
of Insurance over their corruption and problems with influence by political figures and lawyers. I wrote to Governor George
W. Bush seeking his help. In September of 1995, Mr. Jose Montemayor and Mr. Steve Harper phoned to discuss the issues of
falsified expense vouchers being used to steal money from the company. Mr. Montemayor said he had no problem with Officers
of the company using falsified expense vouchers for "GAMBLING MONEY" as long a a contest was involved. They never called
back about the $5,000,000 per acre vacant lots that were improperly valued on MONY's financial statements. In December
of 1995, I was ordered to Austin by the head of the Fraud Unit (Ms. Kerry Key) where she explained to me that they weren't
happy that I had written the Governor and that the Texas Department of Insurance wasn't interested in investigating insurance
executives who only steal $500.00 per month from insurance companies and that they were not interested in investigating
the $55,000,000 false entry on MONY's financial statements.
During July of 1996 I wrote to Senator Al D'Amato and
supplied him with a number of documents including the "Condello Affidavit" along with the "Alexis Daniels Affidavit" which
detailed the "Home Theater and Stereo" projects that Mr. Foti and two other officers had determined should be paid for with
policyholder funds. The issue of Coopers and Lybrand's lack of independence was also raised in the documents. When Mr. D'Amato
did not answer I asked another Senate Banking Committee member, The Honorable Senator Phil Gramm, to help me obtain an accurate
financial statement for MONY. I also raised the question of the false financial statements being used to secure 10's of millions
of dollars in bank loans. After his
reelection, his office reported that he was "POWERLESS" and could not cause anyone
to produce an accurate financial statement for MONY. The following January, I went to the FBI office in Dallas and briefly
met with an agent who took the
documents to review. I later received a letter saying that they were transferring their
file titled "Samuel Joseph Foti" to the New York office. I then went to Senator Kay Bailey Hutchison's office and met with
Ms. Mary Fae Kamm, Director of Constituent Services for the Senator. I showed her a copy of the 1992 Audit with the $600,000,000
in illegal transactions and a copy of the FBI letter. I asked if she could help me get an accurate financial statement for
MONY and help move the FBI investigation along. After several months had gone by, the best that they could do was provide
me with a copy of the same audit that I had showed them at the original meeting. By January of 1998 the FBI could find no
record of there ever having been any file or investigation. MONY's 1994 Schedule "J " fails to disclose a payment of $687,000
to Senator Hutchison's, husband's law firm. The same law firm that charged MONY policyholders more than $200/hr for a
conference call with a former MONY Manager that they had named as a witness in a law suit in Alaska. The man had been dead
for 2 years when they first named him as a witness!
In September of 1997, I went to the Ft. Worth office of the Securities
and Exchange Commission and meet with a staff attorney regarding the false financial statements and lack of independence by
Coopers and Lybrand. The next day he asked me to contact Mr. Joseph Dimaria in the New York office. At Mr. Dimaria's request,
I submitted to him between 450 and 500 pages of documents on Sept. 20, 1997. He later admitted that MONY's financial statements
were false. Attached you will find a copy of the March 1, 1998, letter to Mr. Arthur Levitt, Chairman of the SEC, and the
April 15, 1998, letter to Ms. Walker at the SEC. I am also attaching a copy of the May 28, 1998, letter to Mr. Levitt asking
for his help in obtaining a copy of the last audit of MONY. You will also find a copy of a letter of clarification to Ms.
Donna Garcia Davidson regarding an "Open Records Request" to Governor George W. Bush which contains an admission that he as
the Governor of Texas cannot produce or cause to be produced an accurate financial statement for MONY for anytime while he
has been in office. Governor Bush and his close associates and financial partners at Crescent were reported by the Houston
Chronicle in early 1998 to have paid MONY $155,000,000 for real estate in Houston. Governor Bush also received substantial
PAC contribution from V&E during the time they were padding their bills to MONY.
During October of 1998 the Northwest Arkansas
Times ran a story on MONY concerning some of the issues I raised. On October 16, 1998, MONY faxed a copy of the audit to
the reporter doing the story to support their claim that all the allegations were false and that MONY's financial statements
were accurate. The final signature page of the audit contains the signatures of three examiners who supposedly conducted
the audit. Two of the three individuals have stated to me that they have never seen the final draft of the audit, they were
pulled off the audit before its completion and that the undated signature page that was affixed to the audit to authenticate
it as a "Government Record" should not have been used. This was also confirmed by Mr. Michael Schroeder at the Wall Street
Journal.
On December 2, 1998, the Arizona Department of Insurance reluctantly admitted that Coopers and Lybrand L.L.P.
( MONY's "INDEPENDENT" outside auditor) had acted as the vendor on the sale of financial instruments to MONY as well as billed
millions of dollars in non audit related services. It should also be noted that MONY's Chairman, Mr. Michael I. Roth, is
a former partner of Coopers and Lybrand L.L.P. The current Superintendent of the New York Department of Insurance, Mr. Neil
Levin, is a former staff assistant to Senator Alphonse D'Amato as well as a former Vice President at Goldman Sachs. Mr. Claude
Ballard, is a Limited Partner of Goldman Sachs and has been on MONY's Board since 1990. MONY's financial statements list
a real estate holding at 3700 Buffalo Speedway in Houston, Texas that was acquired through Goldman Sachs (while Mr. Levin
was there) in May of 1988 for 16.4 million dollars. The Harris County Tax Appraisal District in 1997 valued the property
at less than half the original purchase price. This transaction stinks as bad a the $18,080,000 Turtle Creek transaction
in December of 1987 which resulted from illegal activities by MONY officers and board members.
Mr. Andrew Fois, Assistant
Attorney General for the U.S. Department of Justice, has previously determined that investigation of state insurance laws
belongs with the states. Your decision to let the SEC investigate violations of Indiana Insurance laws does not hold water.
In the first place, if the SEC were going to take any action, they would have done it before they let Goldman Sachs take MONY
public with false financial statements. They knew in September of 1997 before Mr. Levitt made his "Declaration of Independence"
speech in October of 1997 when he complemented Nicholas G. Moore. You may want to read the April 26 issue of Business Week
for an example of the work the SEC does.
This company has been looted, MONY's financial statements are false, elected
officials and state regulators have conspired to cover-up and conceal the true financial condition of MONY to the detriment
of it policyholders and stockholders. Coopers and Lybrand L.L.P./ PricewaterhouseCoopers L.L.P. has issued false opinion
letters and knowingly caused thousands of false documents to be entered into the government record with the intent to defraud
the policyholders and investors. Neil Levin and other members of the New York Department of Insurance have purposely caused
the fraudulent audit that you received on October 26, 1998, to be entered into government records in Indiana and other states
with the intent of deceit.
As an officer of the court you are fully aware of the term "criminal conspiracy"! The Indiana
Department of Insurance can't produce an accurate financial statement for MONY for more than 14 years! Thousands of Indiana
citizens have been victims! I ask that you and the Indiana Department of Insurance reconsider your position and just enforce
the laws like you were hire to do and swore you would.
If you have any questions, please do not hesitate to contact
me at 817 267-2020, fax at 817 267-5055 or e-mail RAbshire@AOL.com. I would appreciate a prompt response regarding your intentions.
Respectfully,
R.
Dale Abshire
4316 Pembrooke Pkwy N.
Colleyville, Tx 76034
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