|
Senator
Bill Nelson
716 HART SENATE OFFICE BUILDING
WASHINGTON DC 20510
October 5, 2005
Sent via e-mail to: Barton_Vaughan@billnelson.senate.gov
Dear Senator Nelson:
I am preparing to publish "The MONY Story" and am including information concerning your involvement in sheltering
wrongdoers during your tenure as head of the Florida Department of Insurance. In a sense of fair play I want to give you
an opportunity to correct any of the information prior to publication. I am not and have never been politically motivated
in my efforts to correct the wrongs that were done to more than a million Americans including a large number of military personnel.
Please do not hesitate to contact me ASAP with any and all corrections or explanations that you deem necessary to tell the
full story.
During 1995 you investigated The Mutual Life Insurance Company of New York, commonly and hereafter
referred to as MONY, and issued an order to show cause for the "Suspension of Certification of Authority" on July
7, 1995 (case no.: 10079-94-C-RAP) detailing more than a billion dollars in illegal transactions on MONY's 1993 financial
statements filed in Florida.
Your investigation of MONY came during the same time period that you were investigating
MET Life's sale of life insurance policies as retirement plans to nurses and other citizens of your state. News reports quoted
you as threatening to fine MET as much as ONE BILLION dollars for their actions in falsely illustrating dividends on those
policies. The policies were the same as the ones MONY was also selling in Florida with the exception that MONY was illustrating
double digit returns on nonexistent assets. You took no action against MONY and settled with MET for $25,000,000. Members
of your staff told me they were shocked by the paltry amount of the fine and could not understand why you settled for such
a small number.
Even more shocking was the $2,000 (TWO THOUSAND Dollars) fine that you levied against MONY for
the massive fraud uncovered in the Florida investigation and blind eye to MONY's GUARANTEED RETIREMENT PLAN featuring the
MONYCONOMIZER policy. That is the same contract that the New York and Connecticut Attorney Generals investigated in 1999 and
found to be fraudulent. That information is available at www.SpitzerAG.com with additional info at www.GonzalesAG.com. It
appears that Mr. Spitzer also pulled up due to the Mario Cuomo / James P. Corcoran connection that was responsible for the
initiation of the fraud in 1983.
The enclosed copies of communications that you ignored and refused to answer were
reviewed by members of your current staff shortly after I featured you on my www.PWCSUCKS.com web site. There was no request
for corrections. I was confused for a long time as to why you refused to answer the Freedom of Information requests and to
cover-up the massive fraud by MONY until I recently discover your long relationship with Mr. Paul Grant Rogers who was a MONY
Board Member. I have now opined that you knowingly violated your oath of office and entered into a criminal conspiracy to
cover-up and conceal the criminal acts of MONY and PricewaterhouseCoopers along with MONY's officers and board members.
Shortly before your settlement with MET on the above mentioned case I had the opportunity to share the information
on MONY with an attorney from MET Life and was wondering if you could share with me the names of any MET representative that
might have mentioned MONY to you during the settlement talks?
Please do not hesitate to contact me at 817 545 8961
or e-mail RAbshire@aol.com for additional information or confirmation. If I do not hear from you I will assume that you are
in agreement with the above statements and that you have no corrections.
Respectfully,
R. Dale Abshire
3308 Pin Oak Lane
Bedford, TX 76021
Subj: Arkansas Dept.of Ins. vs David Hale
Date: 04/25/98
To: cabaff@doi.state.fl.us
CC: walter.ricciardi@us.coopers.com, mike.pickens@mail.state.ar.us, tmrozek@usdoj.gov
Mr. Bill Nelson
Commissioner of Insurance
State of Florida
Dear Mr. Nelson:
My offer
to provide Mr. Hale's attorney, David O. Bowden, with copies of documents that I had provided to former Arkansas Insurance
Commissioner Lee Douglas seems to have hit a nerve in Arkansas.
As you are no doubt aware, Mr. Hale has been charged
with lying about the financial condition of his insurance company and was scheduled for trial this week. It is my understanding
that the charges relate to the improper valuation of certain assets and the amount of money involved does not exceed $150,000.
The events giving rise to the charges are alleged to have taken place in the early 90's leading to the charges in mid 1996.
Mr. Hale's attorney has claimed that the charges are politically motivated and designed to discredit Mr. Hale's testimony
in the Starr investigation and that the Arkansas Department of Insurance has treated Mr. Hale differently than others similarly
situated with regard to his alleged violations of Arkansas Law.
As you are aware, I have been in the insurance
business for almost 27 years in Texas with the first 19+ with The Mutual Life Insurance Company of New York, commonly referred
to as MONY. After my departure in Jan. 1991 I became aware
of information about the company and officers that caused
me concern for the safety of my pension and "investment grade" life insurance policies. From court records and
documents on file in the various state departments of insurance along with interviews with present and past employees I became
more concerned. During late 1994 I obtained a copy of the 1992 New York Department of Insurance "Audit". It contained
$100s of millions of dollars in illegal transactions. As required by Article 1.10D of the Texas Insurance Code, I reported
the "suspected fraud" to the Texas Department of Insurance. I then learned of the Travis County Grand Jury investigations
and letter to Gov. George W. Bush concerning the corruption in the Texas Department of Insurance. I was then called to Austin
for a meeting with the head of the Fraud Unit who said they were not interested in investigating insurance executives who
only steal $500 per month and they were not interested in investigating a $55,000,000 false entry on MONY's financial statements.
The Texas Department of Insurance also told me to rely on the "unqualified opinion" letters issued by Coopers &
Lybrand L.L.P. I was also informed that submitting falsified expense vouchers for "gambling money" was OK as long
as a contest was involved.
I also made known my concerns for the integrity of the values being placed on real
estate and even verified with the Dallas County Appraisal District that MONY had submitted an appraisal showing the value
of the Turtle Creek property as $2,707,000 which was less than the $18,080,000 that is shown on the annual filings. The
Texas Department of Insurance has been insistent that the 1994 financial statement filed by MONY is correct and taken absolutely
no action to protect the citizens of Texas.
As you are aware, I made a simple Freedom of Information request for
"an accurate, concise and complete financial statement (as required by law )" to a substantial number of the State
Insurance Regulators. I also obtained a number of sworn affidavits and depositions from court records that leave little doubt
as to why the New York Department of Insurance made the decision in the fall of 1992 to hide the "audit" and initiate
a cover-up that included granting "Trade Secret" status to the "Secret Phantom Stock" plan, lying to the
public and refusing to answer F.O.I.L. requests in violation of New York Law.
You are also aware that I have asked
a number of elected officials including four United States Senators, several state governors, my congressman, my state senator
and my state representative for help in obtaining the accurate financial statement and/or help in getting Freedom of Information
requests answered. As required by law, I took the documents to the FBI in Dallas and explained the situation. A few months
later I received a letter saying that the case had been transferred to the New York office. Having already asked one of my
Senators for help in getting the statements (his office reported back that he was "POWERLESS" ). I showed the other
senators office the New York audit along with the "Daniels" affidavit and asked for help moving the FBI along.
I also ask for help in getting the accurate financial statements. After many months they were able to provide me with a copy
of the same audit I had shown them. In early 1998 the FBI could not find any records.
On
July 17, 1996, I wrote to The Honorable Senator Alphonse D'Amato regarding the arrest warrant that had been issued for Mr.
David Hale for lying to state regulators about the financial condition of his burial insurance company. The lettercontained
12 exhibits including the New York audit and sworn affidavits by a CPA and former employee. I sent a copy to the Arkansas
Commissioner of insurance, Mr. Lee Douglas at the request of Mr. Ridgeway in their law department. In a conference
call on Friday, April 24, 1998, with Arkansas Commissioner Mike Pickens and other department officials Mr. Ridgeway finally
admitted that he did remember our conversation back in 1996 but they can't seem to find any of the documents. Mr. Pickens
has given me his assurance that he will throughly investigate and protect the public interest by the equitable enforcement
of the State's laws and regulations affecting the insurance industry.
He has afforded me the opportunity to step
forward with the evidence for him to investigate. This brings us to the Freedom of Information request that I made to you
on March 17, 1998, which covers the early 90's and in particular the 1994 financial statement that the Florida Department
of Insurance audited and found violations of Florida Law in the $1,500,000,000 range per the Consent Order (CASE NO; 10079-94-C-DMM)
filed with the 1996 statement in Florida. I believe that the information I requested is of grave importance to achieving
fair and equitable enforcement of the law in Arkansas.
In the conference call on Friday, Mr. Pickens was quick
to point out that the Arkansas Department of Insurance didn't rely on "unqualified opinions" of outside accountants
but relied on their in-house people for the accuracy of financial statements. As you are now aware, Coopers & Lybrand
L.L.P. (currently on two years probation / per U.S. Attorney's Office) acted as the vendor on the sale of a financial instrument
to MONY in 1994 while acting as "Independent" auditor for MONY. The New York audit with $600,000,000 in illegal
transactions coupled with the $1,500,000,000 you found in 1994 which resulted in a total of $44,000 in fines being paid by
the company while no one was charged with a crime. The $44,000 is less than half of the cost of the Officers Stereo and Home
Theater project described in the Alexis Daniels affidavit that I sent Mr. Douglas. It's about half the cost of the illegal
yacht cruise shown in the New York audit that occurred in your state.
In trying to compare the equitable enforcement
of the law in Arkansas to Mr. Hale, it appears that the alleged amount of $150,000 is about 20% of the $687,000 payment to
a law firm (that as I recall had defended the Rose Law Firm) that is not disclosed on the Schedule "J" as required.
The same firm claimed to have had a conference call at $204 an hour with a man they named as a witness in the Wassell vs MONY
case. Seeing how the man had been dead for several years when he was named, it surely will mandate an accounting of all those
millions of dollars in billings. The $150,000 is about 1% of the $15M overstatement of the value of the Turtle Creek property
mentioned above.
While Mr. Pickens may have the greatest intentions for the future of the Arkansas Department
of Insurance and may in fact follow through with everything he said he would, the simple fact is his predecessor and the Arkansas
Department of Ins. knew of MONY's falsified financial statements and took absolutely no action to protect the citizens of
their own state. I'm sure when Mr. Pickens gets the documents from the Texas Department of Insurance he will pay close attention
to
the actual dividend histories and the 10's of millions of dollars that the children in Arkansas will never see from
dividends that were illustrated based on income from assets that did not exist.
I do want to give Mr. Pickens
an opportunity to distinguish himself among his peers by meeting his and the Arkansas Department of Insurance goals established
in their Mission Statement. Your prompt attention to my Freedom of Information request will allow me to properly submit to
Mr. Pickens the evidence he has said he will act on.
I thank you in advance for your assistance.
R.
Dale Abshire
4316 Pembrooke Pkwy N.
Colleyville, Texas 76034 817 267-2020 Fax 817 267-5055
Subj: MONY
Date: 03/17/98 modified 6/30/98
To: cabaff@doi.state.fl.us
Mr. Bill
Nelson PUBLIC RECORDS REQUEST
Insurance Commissioner
State of Florida
Dear Mr. Nelson,
The
documents you sent pursuant to my Freedom of Information request included a Consent Order ( Case No: 10079-94-C-DMM ) dated
Feb 16, 1996 that indicates the Florida Department of Insurance conducted an investigation of MONY's 1994 financial statements.
Under Freedom of Information / Public Records request, I request a copy of the investigation and any details regarding the
loans to officers and directors as mentioned in 4.c. of the Consent Order.
Schedule A - Part 1( page 33.15 item
271 ) of the 1996 filing continues to show the last year of Appraisal as 1986 for this property. According to the Dallas Appraisal
District, MONY provided them with an appraisal stating the property was only worth $2,707,000 during 1994. Can you tell me
why this property continues to be carried on the books at $18,080,000 which is well over $100 per sq. ft.
The
documents that you sent make no mention of the "Home Theater" and "stereo systems" for the three company
officers that are mentioned in the "Alexis Daniels" affidavit that I sent with my request. As I understand it, policyholders
are now having to pay to defend a whistleblower law suit by MS. Daniels against the company. I have reviewed the 1994 Schedule
G ( page 7.7 ) filed in New York and discovered a payment of $69,898 to Mr. Steve Peloquin who Ms. Daniels has named in her
affidavit. Mr. Peloquin was an employee of Contemporary Personnel Service and according to Ms. Daniels he received his paychecks
from Contemporary Personnel / not MONY. It is believed that the $69,898 was a consulting fee used to pay for the components
for Mr. Foti's "Home Theater". I would like to know about this issue and assume that the Florida Department of Insurance
"jumped on" the Alexis Daniels affidavit and should have documentation regarding this matter. Please send the entire
file under Freedom of Information / Public Records Request.
As you are aware, the 1992 Audit of MONY revealed $600,000,000
in illegal transactions that resulted in outragous bonus's to top officers of the company under the secret "Phantom Stock
Plan". The "Audit" which was suppressed until June 7, 1994 by the New York Department made no mention of the
"Phantom Stock Plan" or the $4,500,000 scam in the Los Angeles agency during 1991. The New York Department of Insurance
lied about any knowledge of the "Phantom Stock Plan" and then granted "Trade Secret" status to the plan
to hide what they had done.
There was no mention of the millions of dollars in compensation not shown on the Schedule
G as required by New York Law. Amazingly, there was no mention of the "unqualified opinions" that Coopers and Lybrand
LLP had issued before and after the "bad audit" was resolved in 1994. I would assume that the Florida Department
of Insurance audit during 1995 was the result of the prior audit showing its ugly head in the courts. Your auditors and investigators
should have found the Anthony Crane Rental L.P. transaction on page 62.1 of the 1994 Schedule D - Part 3. The transaction
of $8,500,000 on 9/29/94 lists Coopers and Lybrand as the vendor on this sale. This transaction constitutes a "Conflict
of Interest" and a violation of the Rules of Professional Conduct. Your auditors will have found this and have made notes
as well as reporting it. Under Freedom of Information / Public Records Request, I request that you send me copies of all documents
relating to this matter.
MONY's 1996 financial statement lists $319,000,000 in series A notes from AUSA Life.
In reviewing AUSA Life's financial statements for 1996, I noticed that AUSA had apparently written down the value of the assets
that had been transfered by $151,000,000 per MONY's indemnification agreement that is tied to the series A notes.. It also
appears the the $319,000,000 is not available for paying claims until 2002. Will you verify the true value of the Series A
notes and let me know?
Your prompt consideration of this request will be greatly appreciated. If you have any questions
please do not hesitate to contact me at 817 267 2020, fax 817 267 5055 or e-mail RAbshire@aol.com.
Respectfully,
R. Dale Abshire
4316 Pembrooke Pkwy N.
Colleyville, Texas 76034
-$748,106,483
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
cc: John C. Woods, CFE, Financial Examiner / Analyst Supervisor
|
