tampabay.com

$1-billion fraud gets man 20 years

By ASSOCIATED PRESS
Published January 21, 2007


MIAMI - The former president of a firm that sold investments based on death benefits of elderly people, AIDS patients and other terminally ill individuals was sentenced Friday to 20 years in prison for fraud totaling nearly $1-billion.

Peter Lombardi, 56, told U.S. District Judge Paul C. Huck he was assisting in the continuing investigation into fraud at Mutual Benefits Corp., the Fort Lauderdale company he once headed.

Lombardi pleaded guilty in October to securities fraud. Mutual Benefits bought life insurance policies from ill and elderly people at less than face value, then sold shares in the possible payouts to investors.

Lombardi pleaded guilty to using false projections on how long the insured individuals would remain alive and misrepresented the riskiness.