Brokers stole dying nursing home residents' identities to carry out a lucrative fraud, SEC charges

Share this article:

Two investment brokers and their associates are facing charges that they stole nursing home residents' personal information to perpetrate annuities fraud, the U.S. Securities and Exchange Commission announced Thursday. A $4.5 million settlement has been reached with some of the parties.

Brokers Michael A. Horowitz of Los Angeles and Moshe Marc Cohen of New York City masterminded the scheme, according to the SEC. They allegedly stole identification information from nursing home residents through various means, including a fake charity, and used that information to get insurance companies to issue variable annuities. These are investment vehicles that pay out a death benefit to a beneficiary when the holder dies.

Horowitz and Cohen sold the annuities to wealthy investors with the understanding that the annuity holders would soon die and the investors would collect the death benefit, the SEC charged. The brokers made more than $1 million in commissions, according to the federal agency.

The commission also says that after beginning the scheme in 2007, the two men sought to expand the scope by involving institutional investors. They allegedly brought in commodities trader Howard Feder, who helped them facilitate institutional investments in the fraudulent annuities through the auspices of BDL Manager LLC.

As part of an overall $4.5 million settlement, BDL agreed to pay disgorgement and a penalty totaling about $3 million, the SEC announced. Feder agreed to pay a $130,000 penalty. Individuals who were charged with helping obtain the nursing home residents' information also agreed to penalties. None of the parties admitted or denied the SEC's charges.

The agency is continuing to pursue litigation against Horowitz and Cohen.

Share this article:

More in News

A small team of workers responds best in emergencies, expert says

A small team of workers responds best in ...

Long-term care providers should consider a "flat" crisis management approach that relies on a core group of staff members, experts advised Wednesday at the LeadingAge annual conference.

Nursing homes have better pain and catheter management if leaders have more ...

Nursing homes led by administrators and directors of nursing with higher levels of education and certification have better outcomes on some key quality measures, according to recently published findings.

Court green-lights charges that a healthcare network underused observation stays

A whistleblower can continue to pursue charges that a Nevada healthcare network routinely admitted people as hospital inpatients when they should have been placed in observation status, a federal appeals court recently ruled.