Life Settlement Fraud in New York
What Puts a Person or Entity at Risk of Prosecution?
A person may find themselves at risk of prosecution for the Life Settlement Fraud in New York when they commit a “fraudulent life settlement act.”
Below, we will discuss:
- Life Settlement Fraud in the Fifth Degree – New York Penal Law § 176.45
- Life Settlement Fraud in the Fourth Degree – New York Penal Law § 176.5
- Life Settlement Fraud in the Third Degree – New York Penal Law § 176.55
- Life Settlement Fraud in the Second Degree – New York Penal Law § 176.6
- Life Settlement Fraud in the First Degree – New York Penal Law § 176.65
What is a “Fraudulent Life Settlement Act?”
A “fraudulent life settlement act” is any knowing and intentional act resulting in the conveyance of fraudulent information considering any material fact that is designed to obtain a life insurance settlement.
The Legal Definition of Life Settlement Fraud
N.Y. Penal Law § 176.45-65 and can be either a misdemeanor or a felony under state criminal laws depending on the facts of the case.
The “elements” of life settlement fraud are the things that the prosecutor must prove in order for you to be found guilty of this offense. Basically, for a defendant to be convicted in a criminal trial for Life settlement fraud under N.Y. Penal Law § 176.45-65, all the following must be true:
- A person must take a fraudulent action designed to influence a life insurance settlement.
- The act must have been knowing and intentional.
Let’s delve a bit more deeply into these elements of the crime of assault to understand their meaning better.
Element #1: Fraudulent Action to Influence a Life Insurance Settlement
- The definition of an Action to influence a Life Insurance Settlement is the fraudulent preparation or presentation of a written statement or other evidence in support of an application for a life settlement or a claim for benefits under a life settlement contract.
- This element essentially requires that you have taken some fraudulent action designed to either influence a life settlement contract application or to claim benefits under one.
For example, Dalton knows that his life insurance policy has recently been terminated and does not disclose this fact when he contacts a life settlement broker to sell his policy. He could likely be found guilty of performing a fraudulent action designed to influence a life settlement.
Element #2: Knowing and Intentional
- The definition of knowing and intentional is that the action must have been performed with the full awareness that it was fraudulent and with the intent to improperly influence a life settlement.
- For example, if Dalton from the above example had no awareness that the insurance company that carried his policy had gone out of business, then he could not have been found to have tried to settle the policy knowingly and intentionally fraudulently.
Penalties
Sentences can be either misdemeanors or felonies and can be punished with up to 25 years in prison. Life Settlement Fraud is a very new crime in the State of New York, but already individuals have been sentenced very harshly. Because sentences can be so severe for life settlement fraud in New York, it is important to consult a skilled criminal defense attorney.
Related Offenses
Charges of Life settlement fraud may be brought in addition to, or in place of, charges for certain other related offenses, including:
Related Offense #1: Insurance Fraud
- The definition of Insurance Fraud is taking a knowing and intentional fraudulent action designed to obtain an insurance policy or benefit.
- This charge differs from Life Settlement Fraud as it relates to the initial issuance of the policy or to obtain a benefit under the policy. Life Settlement Fraud relates to selling the policy to a third party company.
- If Dalton from the above example had been recently diagnosed with cancer and he applied for life insurance without disclosing this fact, he could likely be found guilty of insurance fraud.
Related Offense #2: Aggravated Life Settlement Fraud
- The definition of Aggravated Life Settlement Fraud is when someone is found guilty of life settlement fraud and then again commits life settlement fraud within 5 years.
- This crime requires that you have already been convicted of Life Settlement Fraud and serves as an automatic enhancement should you be convicted of the crime again within the 5 year period.
- If Dalton from the first example had been convicted of life settlement fraud and after his release from prison had immediately attempted to sell his worthless policy again, then he could likely be convicted of aggravated life settlement fraud.
What are some of the essential and impactful cases?
Life Settlement Fraud is a very new criminal law passed by the New York Legislature in 2010. There are currently no essential and impactful cases that have been litigated or which might further refine the written statute.
The statute was enacted following the Life Settlement Industry remaining unregulated for decades. The industry often involves settlements for individuals who are in need of funds for medical purposes, or elderly individuals who need funds and both serve as targets for fraud.
In enacting the legislation that created the new criminal law, the author stated he hoped to bring “much-needed regulation to the growing life settlement industry.”
What agencies detect, investigate, and prosecute this crime?
Life Settlement Fraud is investigated and prosecuted by several agencies and offices. Generally, a life settlement company that suspects they are the possible victims of fraud will contact local authorities who will investigate.
Should the case cross state lines and involve a certain amount of money, then federal investigators may become involved. Insurance is also a regulated industry, and as such, industry investigators will likely also investigate your case. Once enough evidence has been collected, the case will be referred to a prosecutor’s office for charges to be brought against you.
Penalties for Violating (Statute):
Life Settlement Fraud can be either a misdemeanor or a felony depending upon the degree of the crime with which you are charged. The potential penalties include:
- The penalties for Life settlement in the Fifth Degree range from no jail with probation up to one year in prison
- The penalties for Life settlement in the Fourth Degree range from no jail with probation, to 1 1/3 years in prison up to 4 years in prison
- The penalties for Life settlement in the Third Degree range from no jail with probation, to 1-3 years in prison up to 7 years in prison
- The penalties for Life settlement in the Second Degree range from no jail with probation to 1-2 years in prison up to 15 years in prison
- The penalties for Life settlement in the First Degree range from a minimum of 1 to 3 years in prison with a maximum of 25 years in prison
In all cases, you will also be required to pay back any fraudulently obtained funds, and you will possibly be subject to additional fees.
Sentencing Enhancements
The penalties for Life settlement depend on the degree of the crime with which you are charged. Depending on the amount of the fraudulent settlement you may be sentenced anywhere from 25 years in prison down to no jail time with probation.
If you have previously been convicted of Life Settlement Fraud in the last five years, you may also be charged with Aggravated Life Settlement Fraud the punishments for which range from no jail time with probation, to 1-3 years in prison up to 7 years in prison.
What are some of the additional consequences of being convicted?
There are a significant number of additional consequences of which you should be aware of. Many degrees of Life Settlement Fraud punishments are felonies and carry with them significant legal and immigration consequences.
If you are not a citizen of the United States, you may face revocation of any legal status you have and be subject to deportation. Life Settlement Fraud is a crime of deceit. It is also considered a crime of moral turpitude and a conviction can bar you from practicing in many professions, including law.
Legal Defenses to Life Settlement Fraud
Nobody wants to go to jail or pay a fine—and nobody wants a conviction for Life settlement fraud on their record.
People may start to associate you with this crime, even though they do not understand the specifics of your case.
There are several powerful legal defenses you can use to fight these charges. They include:
Defense #1: Lack of Knowledge
- One of the defenses for Life settlement fraud is that the defendant had no knowledge that they were selling a worthless life settlement or otherwise defrauding the buyer.
- The law requires that the crime be committed in an intentional and knowing manner, and without such intent and knowledge, there can be no conviction.
- For example, if Dalton from the above example had no awareness that the insurance company that carried his policy had gone out of business, then he could not have been found to have tried to settle the policy knowingly and intentionally fraudulently.
Defense #2: Lack of Fraudulent Action
- The second defense for Life settlement fraud is that the defendant did not take a fraudulent action.
- The law requires that the crime be committed with fraudulent action, and without such action, there can be no conviction.
- For example, if Dalton from the above example had informed the buyer that the policy was likely worthless because the carrier had gone out of business, then he could not be found to have performed a fraudulent action.
These two defenses negate parts of the statute and are only some of the tools a skilled criminal defense attorney such as the ones at our firm will use to defend you or a loved one should you find yourself charged with Life Settlement Fraud.
“Life Settlement Fraud” in the News
Article #1: Greene County Veteran’s Agency employee charged with official misconduct
Charge: Fraudulently obtaining a signature, Fifth-degree life settlement fraud, and Official misconduct
Allegations: Misuse of position to obtain a life settlement
In 2018, Zachary P. Snyder, a Greene County Veterans Services Agency was arrested and charged with Fifth-degree life settlement fraud after it was alleged that he misused his position with the agency to convince a woman by fraudulent letter that there were unpaid claims for her deceased husband.
Snyder convinced the woman to authorize him as her power of attorney to investigate unpaid claims on her behalf. He also convinced her to sign a release of beneficiary status form.
According to the Hudson Valley 360, Snyder was summoned to Catskill Town Court and released after being given an appearance ticket. He is expected to appear back in court to answer for the charges of fraudulently obtaining a signature, fifth-degree life settlement fraud, and Official Misconduct. If convicted on all charges, he faces the possibility of years in prison.
To learn more about this case, click this link, or copy the URL below:
Article #2: Lall found guilty in Schenectady murder-for-hire case
Charge: first-degree murder and life settlement fraud
Allegations: Murder and attempt to illegally obtain a life insurance settlement
In 2018, Tarchand Lall hired hit men to kill Charles Dembrosky of Schenectady, New York, two years ago. Following a jury trial, Lall was convicted of first-degree murder and life settlement fraud. Lall arranged the murder in order to obtain $150,000 in life insurance proceeds.
As a result of the conviction for first-degree murder, Lall faces life in prison without the possibility of parole. Dembrosky was a friend of Lall, and the prosecutor stated in an interview that his actions were “heinous” and that it was unbelievable someone would do that to someone they considered a friend. Police found evidence of a call from Lall to the hitmen. Lall is now due for sentencing.
To learn more about this case, click this link, or copy the URL below:
https://dailygazette.com/article/2018/12/12/lall-convicted-in-schenectady-murder-for-hire
Article #2: Lall found guilty in Schenectady murder-for-hire case
Charge: first-degree murder and life settlement fraud
Allegations: Murder and attempt to illegally obtain a life insurance settlement
In 2018, Tarchand Lall hired hit men to kill Charles Dembrosky of Schenectady, New York, two years ago. Following a jury trial, Lall was convicted of first-degree murder and life settlement fraud. Lall arranged the murder in order to obtain $150,000 in life insurance proceeds.
As a result of the conviction for first-degree murder, Lall faces life in prison without the possibility of parole. Dembrosky was a friend of Lall, and the prosecutor stated in an interview that his actions were “heinous” and that it was unbelievable someone would do that to someone they considered a friend.
Police found evidence of a call from Lall to the hitmen. Lall is now due for sentencing.
To learn more about this case, click this link, or copy the URL below:
https://dailygazette.com/article/2018/12/12/lall-convicted-in-schenectady-murder-for-hire
Article #3: Life sentence for ordering 2016 Schenectady murder
Charge: first-degree murder and life settlement fraud
Allegations: Murder and attempt to illegally obtain a life insurance settlement
In 2019, Tarchand Lall was sentenced to life in prison without the possibility of parole. Following his conviction in 2018, Judge Matthew Sypniewski of the Schenectady County Court handed down the maximum possible sentence on Lall who will now spend the remainder of his life behind bars. The judge found him “solely responsible” for setting into motion the 2016 murder of Charles Dembrosky.
Before sentencing Lall, Sypniewski stated that it was a “shocking case” because of how cold and calculated Lall’s actions were. Lall valued his friend’s life at $139,230, the amount he obtained from his life settlement fraud in association with his first-degree murder.
During the sentencing hearing, Prosecutor Peter Willis of the Schenectady County District Attorney’s Office stated that Lall had a “complete lack of emotion” and that his crime was “unconscionable.”Lall remained stoic during the sentencing and merely shook his head without making a statement.
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Article #3: Landmark Consumer Protection Legislation Becomes Law
In 2009, New York State Senator Neil D. Breslin (D-Delmar) sponsored a piece of legislation designed to regulate the billion-dollar life settlement market in New York, and his bill was signed into law by Governor Paterson.
The life settlement industry originated in the 1970s and 1980s when many critically ill individuals sold their life insurance policies to help cover the expenses of their medical care. More recently, this industry has expanded to market to seniors who no longer need their policies.
- Senator Eric Schneiderman (D-Manhattan/Brox), stated that “Currently, fraud, and abuse run rampant in New York’s life settlement industry.” He believed that this bill would help protect customers from abusive industry practices.
- Senator Brian Foley (D-Blue Point), stated that the bill was a piece of “critical consumer protection legislation” and that it can help “ensure that seniors and other vulnerable members of our society are not taken advantage of by those seeking to make a quick buck.”
The bill’s passage into law was celebrated by numerous other senators and representatives of state agencies who emphasized the importance the bill would have in bringing regulation and protection to the New York Life Settlement industry after it had been unregulated for so long. Numerous officials also emphasized that the life settlement industry generally involves elderly seniors who are particularly vulnerable for being targeted.
To learn more about this case, click this link, or copy the URL below:
Call us for help.
For questions about N.Y Penal Law § 176.45-65 and Life Settlement Fraud, or to discuss your case confidentially with one of our criminal defense attorneys, do not hesitate to contact us. Life Settlement Fraud carries with it significant penalties. If you are convicted of Life Settlement Fraud in the First Degree, you may even find yourself sentenced to 25 years in prison!
Life Settlement Fraud
It is a very new criminal law, and there is little case law on the books so far. Even so, very harsh sentences have already been handed down by New York courts.
It is therefore incredibly important to have a skilled criminal defense attorney who understands how the law works and someone who is suited to take on one of the first cases of this kind prosecuted in the State of New York. Our attorneys are standing by to help you or your loved ones if you are charged with Life Settlement Fraud in New York.
We have local criminal law offices in your area.
[2] N.Y. Penal Law § 176.45-65.
[3] N.Y. Penal Law § 176.40 (McKinney)
[4] https://www.nysenate.gov/newsroom/press-releases/landmark-consumer-protection-legislation-becomes-law
[5] N.Y. Penal Law § 176.45 (McKinney).
[6] N.Y. Penal Law § 176.50 (McKinney)
[7] N.Y. Penal Law § 176.55 (McKinney)
[8] N.Y. Penal Law § 176.60 (McKinney)
[9] N.Y. Penal Law § 176.65 (McKinney)
[10] N.Y. Penal Law § 176.70 (McKinney)
[11] N.Y. Penal Law § 176.45-65.[12] N.Y. Penal Law § 176.45-65.