Office of the Treasurer (now US Senator Bill Nelson)
Department of Insurance
State of Florida

April 21, 1994
 

Mr. Michael Isor Roth, President,
Chairman of the Board and CEO
The Mutual Life Insurance Company of New York
1740 Broadway New York, NY 10019

Dear Mr. Roth:

Based upon a review of Mutual Life Insurance Company of New York's 1993 Annual Statement, it appears that the company is in non-compliance with the following Florida Statutes:

1. Pursuant to Section 625.333(2)(a), Florida Statutes, an insurer's limitation in real estate for investment purposes (including joint ventures and participations) is 5% of admitted assets. The company's investment of $1,636,633,686, which included joint ventures, exceeds the company's limitation of $484,879,721 by $1,151,753,965, which is therefore non-admitted.

2. Pursuant to Section 625.031(2), Florida Statutes, loans to officers and directors are not allowed. Therefore, the company's loans of $75,382, General Interrogatories, item 17b., is non-admitted.

3. Pursuant to Section 625.305(4)(d), Florida Statutes, the company's limitation in bond obligations which have been given a rating of 6 by the Securities Valuation Office (SVO) of the NAIC is 1/2% of the insurer's admitted assets. The company's investment of $62,281,579 exceeds the company's limitation of $48,487,972 by $13,793,607.

4. Pursuant to Section 625.327(3)(a), Florida Statutes, an insurer's limitation in a mortgage loan (other than mortgages on dwellings not intended for occupancy by not more than four families, if it is Insured up to 95%) shall not exceed 75% of the value of the property. Schedule B-Part 2-Sections 1A and 1B reports 44 mortgages which exceed the loan to value limitation by an aggregate amount of $37,426,073, which is non-admitted.

5. Section 625.141(2), Florida Statutes, requires methods valuing bonds to be consistent with the method formulated or approved by the National Association of Insurance Commissioners (NAIC) or its successor organization, and as set forth in the latest edition of its publication "Valuation of Securities." The company has reported bonds acquired prior to 1993 in the aggregate amount of $14,227,655 with a designation of "Z" which indicates an obligation with a designation not such bonds is a standard industry practice and is required in Florida under Rule 4-137.001(4), F.A.C. These bonds have been non-admitted. Provide to the Department evidence of submission to the NAIC Securities Valuation Office of all bonds designated as Z.

6. Pursuant to Section 625.031(6), Florida Statutes, an insurer may not allow as assets, securities which are in default. The company's investment of $31,004,423 in mortgages of which interest is overdue more than 1 year, per Item 2(a), Notes to Financial Statements, is non-admitted.

7. Pursuant to Section 624.408(4), Florida Statutes, the company's required policyholder surplus is $100,000,000. The company's adjusted surplus after non-admitting the amounts in items 1 through 6 above is negative $648,106,483, which is deficient of the above stated requirement by $748,106,483.

A summary of surplus as to policyholders is as follows:
Reported Surplus: $600,174,622
Less Adjustments:
Item 1-Investment Real Estate:
Section 625.333(2)(a) -1,151,753,965
Item 2-Loans to Officers & Directors:
Section 625.031(2) -75,382

tem 3-Investment in Bonds Rated 6:
Section 625.305(4)(d) -13,793,607

Item 4-Investment in Mortgages:
Section 625.327(3)(a) -37,426,073

Item 5-Investment Non-Designated Bonds:
Section 625.141(2) -14,227,655
Item 6-Investment in Mortgages in Default.
Section 625.031(6) -31,004,423
Adjusted Surplus: $-648,106,483
Less Required Surplus as to Policyholders: -100,000,000
Total Surplus Deficiency: $-748,106,483

Please provide to the Department within fifteen (15) days, the company's plan to attain compliance with Florida Statutes. Failure to respond within a timely manner will result in administrative action by the Department.

Your response may be forwarded to my attention.

Sincerely,

Leslie Blank
Financial Examiner

 Alberto Gonzales                                                                        March 7, 2005
Attorney General
U.S. Department of Justice
950 Pennsylvania Avenue
NW Washington, DC 20530-0001   
  
  
Dear Mr. Gonzales:

I'm sure you recall Angie Frank Smith Jr. who retired as the Managing Partner of Vinson & Elkins about the time you joined the firm in 1982. That was when he joined the board of directors at the The Mutual Life Insurance Company of New York (commonly referred to as MONY) where I was employed in a sales and management position.

You may also recall that starting in 1995 I reported, as mandated by Article 1.10d of the Texas Insurance Code, suspected fraud in the business of insurance and asked for help for policyholders to both the Texas Department of Insurance and to Governor George W. Bush concerning the fraudulent financial statements of MONY, the looting of the company and the PONZI insurance contracts that were used to defraud the public. Your office (Pete Wassdorf, Donna Garcia Davidson and James Hines) responded on behalf of Governor Bush that they could not help and according to Mr. Wassdorf it would be inappropriate for the Governor of Texas to contact the governor of New York and interfere with the operation of a New York domiciled company. I was shocked by his comments in light of theTravis County Grand Jury Letter (page 2) to Governor-elect George W. Bush imploring him to clean-up the fraud and corruption within the Texas Department of Insurance.

While employed by MONY as a sales agent and Manager of the Ft. Worth Agency I not only sold millions of dollars in business but recruited and trained many other agents to sell MONY products to the public. Beginning in 1983 MONY introduced a series of products designed for retirement and high increasing death benefits based upon dividends that the company claimed were conservatively illustrated at a 7 to 7.5% return on the company's investments.  The products were used in many different ways to illustrate educational savings plans, guaranteed retirement funding, pension maximization and elimination of the survivorship benefit for members of the military as well as replacement of IRA accounts. These policies were widely marketed as sound "investment grade" life insurance contracts accompanied by an array of company furnished sales literature and materials.

Simply put, the products were a PONZI and the literature used to defraud the public was false. The dividends had been illustrated based on a 11 to 12% return on assets with inflated values as well as nonexistent assets.

You may also recall that during the Florida election trials the "Bush Team" named one of America's foremost accountants, Mr. R. Larry Johnson CPA, to testify as an expert witness. Coincidentally, Mr. Johnson had previously been called upon in 1995 to render an opinion on MONY's financial statements and review the N.A.I.C. examinations of the company.  His sworn affidavit is posted @http://monybush.com/LarryJohnson.html for your review. It should be noted that he did not know that Coopers & Lybrand had been violating the auditor independence rules by selling financial instruments to the company on the side while issuing false opinion letters certifying MONY's financial statements that contained 100s of millions of dollars in fraudulent transactions nor was he aware of the Florida Department of Insurance investigation by current U.S. Senator Bill Nelson that revealed more than a billion dollar surplus shortage on the statements filed in Florida.  The Florida letter to MONY's Chairman, Michael I. Roth is posted @http://pwcsucks.com/_wsn/page3.html . Mr. Roth is a former Coopers and Lybrand partner and is currently Chairman of the Interpublic Group of Companies Inc.

During the same time that I was seeking help from Texas, I contacted Walter Ricciardi in the general counsel's office at Coopers & Lybrand and provided him with documentation including the Johnson affidavit and asked him to help resolve the matter. He informed me that he had checked it out and it was "no problem" selling bonds and financial instruments to MONY while acting as the independent accountant.  Coopers & Lybrand was then merged with Pricewaterhouse.  PricewaterhouseCoopers (PWC) then preceded to take MONY Public with the false financial statements and false acturial opinions in November of 1998 with the help of Goldman Sachs and DEWEY BALLANTINE LLP a New York law firm whose managing partner became a MONY board member when Claude M. Ballard the Goldman Sachs rep was found guilty of fraud by the Tax Courts.

Today, Walter Ricciardi is the SEC Boston District Administrator responsible for prosecuting individuals who commit crimes less than his own.

During 1997 I provided Mr. Joseph Dimaria of the Securities and Exchange Commission with documentation of the false financial statements and later got his admission that MONY had in fact filed false financial statements with the SEC. He then said that he could no longer talk to me and hung up. In 1998 I asked Arthur Levitt, Chairman of the Securities and Exchange Commission,  to help policyholders get an accurate financial statement for the company prior to their being asked to vote on demutualization. I received a response from the Northeastern District Administrator, Carmen J. Lawrence, who informed me that MONY did not file financial statements with the SEC and that they could not help me. She was lying! MONY had filed financial statements with the SEC since the early 70s.  The SEC then allowed MONY to go public with an Initial Public Offering in excess of a billion dollars.  Shortly after the IPO I gave the SEC letters to Michael Schroeder at the WSJ.  Soon afterwards I received a call from SEC attorney Dorothy Heyl wanting to help me resolve the matter and asked me to work with her on the investigation. The SEC then refused to talk to the media because of the confidentiality of their investigation. The WSJ story is available on thewww.MONYINTERNATIONAL.com site along with the SEC letters. Three years later Mr. Frank Henderson at the SEC admitted that there had never been any investigation. Ms. Lawrence resigned and became Harvey Pitt's co-partner at Fried Frank Harris Schriver and Jacobson and assumed his practice when he became chairman of the SEC.

Prior to the demutualization of MONY I contacted a substantial number of elected officials and asked for their help in obtaining "an accurate, concise and properly opined financial statements, like the law says that I am entitled too, for MONY". I also contacted the Dallas office of the FBI and provided then with the sworn affidavit of MONY employee Alexis Daniels detailing the use of company funds by officers for home theaters and stereo systems and falsified  expense vouchers to steal from the company. They sent me a letter saying they had transferred the case to their New York office.

After Senator Phil Gramm's office proclaimed him to be "powerless" to cause anyone to produce an accurate financial statement for MONY I contacted Senator Kay Bailey Hutchison and asked for her help with the financial statements and in moving  the FBI along. I provided the Senator's office with a copy of the N.A.I.C. audit of the company and the letter from the FBI. Her office said they could help. Five months later the best they could do was provided me with another copy of the same N.A.I.C examination of the  company that contained over $600,000,000 in illegal transactions and  claimed the FBI could find no record of the letter they sent me or any investigation. Senator Hutchison was unable to explain the $687,000 MONY paid to her husband's law firm (Vinson & Elkins) that MONY failed to disclose on the financial statements as required by law.
 
Senators Kay Bailey Hutchison and Fred Thompson both refused help with a Freedom of Information request for the orphan child of a dead fireman that held the Navy Cross. The request pertained to falsified expense vouchers being used to get money for illegal campaign contributions that I learned about while working as a case consultant on a suit by another MONY manager. I witnessed his admission to an attorney that he had done it with the blessing of two officers of the company. Vinson & Elkins was defending many of the lawsuits brought by MONY agency managers and employees.  I obtained a number of sworn affidavits from court records  alleging misconduct by 3 of V&E's attorneys. In Wassell v MONY V&E attorney Douglas Hamel named a dead man (John McCole) as a witness and V&E attorney Shadow Sloan then billed the policyholders of the company for a conference call with the corpse! You may recall that Webster Hubbell went to prison for fraudulent billings. The Texas Department of Insurance saw nothing wrong with the fraudulent billings. Jose Montemayor, the current Texas Commissioner of Insurance, previously told me he saw nothing wrong with MONY's management using falsified expense vouchers to get money for gambling. His response is typical of the activities cited by the previously mentioned Travis County Grand Jury letter that your own office claimed the Governor of Texas did not bother to save.

New York and Connecticut Attorneys General Spitzer and Blumenthal both investigated MONY's sale of the fraudulent PONZI contracts and extracted millions of dollars for the benefit of their respective states and then closed their cases without considering the 100s of thousands of us that had also been victims of the same fraud. As a matter of fact, those of us with the same contracts actually paid the money Spitzer / Blumenthal collected for their constituents. You can review the information and news articles on thewww.SPITZERAG.com and http://pwcsucks.com/_wsn/page10.html web sites.

This fraud which started with Angie Frank Smith jr. on MONY's board and  James P. Corcoran (MONY's former assistant general counsel) as the New York Superintendent of Insurance from 1983 to 1991, could not have happened without Cooper & Lybrand / PricewaterhouseCoopers and a regulatory system willing to support corruption.
Example: MONY's Board installed a "Phantom Stock Plan" for selected officers of the company that was based on profits over a rolling three year time frame. The plan had a minimum profit requirement of $350m for there to be any payment.  The fraudulent statements were then used to steal 10s of millions of dollars. There were never any profits, the company was insolvent. The General Counsel of the New York Department of Insurance ( Paul F. Altruda) in responding to a FOIL request first denied the department had any knowledge of the Phantom Stock Plan..... then when it was proven that not only did they know of it but had reviewed it, they granted Trade Secret status to the plan to hide their own involvement. The New York Department of Insurance also engineered a false and fraudulent exam of the company prior to the demutualization of the company. Details are included in theMcNenny Fraud Report.

During 2004 PricewaterhouseCoopers stood on both side of the hostile takeover of MONY by AXA , a French company, for less that 75% of the stated book value of the company instead of the normal 2 to 2.5 times that is currently being argued in courts. Prior to the takeover I provided AXA with the information on MONY and received no response.

I think I heard you say that as the U.S. Attorney General you would be working for the public and in the interest of citizens. Can you help me resolve this situation? I own insurance policies purchased for retirement like those that Mr. Spitzer and Blumenthal claimed were fraudulent and forced MONY to make good on. Can you get AXA / MONY to make good on my policies? If not, can you help me obtain an accurate, concise and properly opined financial statement for MONY as there hasn't been one since you graduated from law school in 1982.

Your help will be greatly appreciated and will allow me to move on to other less time consuming activities in my retirement. I stand ready to answer any questions or provide documentation at your request. I can be reached at 817 545-8961 or e-mail RAbshire@AOL.com. 

Verification of your receipt of this letter is requested.

Please consider this request as a report of suspected fraud as mandated by 1.10d of the Texas insurance code.