Michael McNerney Gets Five Years in Prison for $1.25 Billion Mutual Benefits Ponzi Scheme

Categories: Broward News
steinger-mcnerny.jpg
Joel Steinger (center, blue tie) and Michael McNerney to his left, along with the rest of their Colombian excursion crew.
Michael J. McNerney -- a founding partner of the Fort Lauderdale Brinkley, McNerney, Morgan, Solomon & Tatum law firm as well as a founding partner of the Mutual Benefits Corp.'s Ponzi scheme -- was sentenced late last week to five years in prison.

As outside counsel for the Mutual Benefits Corp., the feds say that from October 1994 through May 2004, he helped raise more than $1.25 billion in a scheme selling investment interests in insurance policy settlements to more than 30,000 people worldwide.

McNerney pleaded guilty a few months ago to conspiracy to commit mail and wire fraud in exchange for dropping the rest of the laundry list of charges he was indicted on. His alleged cohorts in the scheme, brothers Joel Steinger and Steven Steiner (who dropped the g in his last name) and Anthony Livoti, have not taken any such deal and are slated to head to trial in the coming years.

McNerney also was ordered to pay restitution of the full $826 million that was lost in the scheme, which would be pooled in the event of his pals' convictions.

The FBI explains that McNerney and friends were running the scheme by fraudulently promising returns to investors on both viatical and life settlement insurance policies, which it defines as simply as possible:

A viatical settlement is a transaction in which a terminally ill person sells the death benefit of his or her life insurance policy to a third party in return for a lump-sum cash payment, which is a discounted percentage of the policy's face value. A life settlement is similar to a viatical settlement, except the seller is not terminally ill, but is a senior citizen. In the sale of viatical or life settlements, an investor would realize a profit if, when the insured dies and the policy matures, the policy benefit is more than the price paid for policy. Any profit realized would be decreased by additional out-of-pocket costs, such as premium payments.

While people got their cash from insurance settlements -- most of whom were dying of either cancer or AIDS -- McNerney was lying to investors about historical returns on investments, the life expectancy of people whose policies they'd purchased, and the amount of money Mutual Benefits had to cover the payments on the policies.

In the indictment, the feds say Mutual Benefits would engage in several other scummy practices, including reselling failed policies to new investors, taking on other worthless policies, and running the classic definitional Ponzi scheme.

As many veteran New Times readers know, the downfall of Mutual Benefits was covered extensively by Bob Norman -- which you can find most of here -- with the gem being "Joel Steinger and Mutual Benefits Corp. Stole a Billion Dollars by Peddling Bogus Life Insurance Policies," which you can find here.


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Obermann
Obermann

Look at all you folks who were kissing Rothstein's ass, hovering around Steinger.  You're filty and not to be trusted by association with these criminal snakes.  You are people no one would want in their foxhole, so go dig your own holes and disappear.

Obermann
Obermann

Why aren't you also bringing up Ken Keechl as a partner in this shenanigan?  Is he being indicted as well?  How about Russ Klenet?  They were all part of this disgusting thievery. Stacy Ritter was taking gifts for her house from this disgusting POS Steinger.  Vacationing with him, keep their yacht at Steinger's house, playing in his pool.  It's enough to make you want to throw up.

jesus
jesus

Dont ya think they would have indicted keechel or klenet if they had something on them. who are you oberman, a spurned lover of ken or russ? Jesus.

Obermann
Obermann

No, I don't think they would have indicted Klenet and Keechl even thought they knew (on the books) they participated with Joel Steingers's company and were PAID ponzi money by Joel Steinger's fraud scheme.  Not yet, because nothing happened before the Feds, pressure from Bob Norman, etc. demanded some criminal action be taken.  Who are you, Jesus, someone who got illegal money from these corrupt individuals??  Are you as dumb as your sound...that's a yes or no question, answer accordingly and then scram

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