Jurors deliberating in money-laundering trial linked to South Florida ‘Ponzi scheme’
02/27/2013 2:17 PM
02/27/2013 8:49 PM
One-time Fort Lauderdale executive Steven Steiner and his live-in partner, Henry Fecker III, had a taste for the finer things in life.
They owned multimillion-dollar homes on the waterfront in Fort Lauderdale and Camden, Maine, along with a Manhattan condo.
Now, a federal jury in Miami is deliberating whether the men laundered millions of dollars in ill-gotten profits from an investment scam allegedly run by Steiner’s company, Mutual Benefits Corp. The company sold $1.25 billion worth of life insurance policies, held by people dying of AIDS, to investors who lost $830 million — among Florida’s biggest financial frauds, federal authorities say.
Both men, who have stood trial for the past month, are charged with laundering millions through home purchases, hiding assets from authorities and lying to a court-appointed receiver who was seeking to reimburse Mutual Benefits investors who bought the so-called viatical policies.
The 54-count indictment charges them with conspiracy, money laundering and obstruction of justice, which carry potentially lengthy sentences.
Steiner, 61, a former Mutual Benefits vice president, has been detained at the Federal Detention Center in downtown Miami since his arrest in August 2011. Fecker, 59, who was arrested in Maine that summer, has been out on bond.
During trial in February, Steiner testified that no fraud was committed at Mutual Benefits and that he complied with his settlement obligations with the Securities and Exchange Commission and the court-appointed receiver, who took over the bankrupt company in 2004. Steiner also testified that his company was a “victim” of the receiver’s decision to wind down the business.
On the witness stand, Steiner name-dropped Bill Clinton, Hillary Clinton and Phil Donohue as friends.
Fecker’s lawyer, Valentin Rodriguez, argued that his client was a dupe who was misled by Steiner.
Assistant U.S. Attorney Jerrob Duffy depicted Steiner and Fecker as partners in crime, claiming they used “money from a massive Ponzi scheme” at Mutual Benefits to support their “lavish lifestyle.”
“When we started, we told you this case was about a crime spree, involving fraud, lies and deception,” Duffy said in closing arguments last week. “Now that you have heard all the evidence, you know that it is about ‘catch me if you can,’ a game of hide and seek.”
According to the indictment, Steiner and Fecker plotted to funnel nearly $11 million of Mutual Benefits proceeds through a consulting business, using the money for their Northeastern homes and lying about the real value of their assets to the court-appointed receiver for Mutual Benefits.
The receiver, Bob Martinez, was named by a federal judge in 2004 when the SEC shut down the company and froze its assets. The receiver recovered about $120 million for Mutual Benefits investors.
To obtain a favorable settlement with the SEC, Steiner and Fecker submitted a series of false and misleading documents to conceal their true financial condition, according to the indictment. In 2007, the SEC agreed to settle their liability for $5 million and later reduced the penalty to $3.95 million. But to date, Steiner and Fecker have paid only $750,000, according to Duffy and fellow prosecutor Dwayne Williams.
At trial, prosecutors sought to show that Steiner and Fecker actively thwarted the efforts of the court-appointed receiver and the SEC.
In one example, Fecker refinanced the waterfront Maine property in 2006 and placed the proceeds of $480,000 into a series of certified checks to conceal the money’s existence from authorities, according to evidence at trial. Fecker then cashed the checks from 2008 through July 2011 to support him and Steiner.
In another instance, evidence showed that in late 2009, Steiner sold their luxury Manhattan apartment for $1.3 million but said the sale was for $1.1 million in documents submitted to the SEC and the receiver.
Steiner allegedly provided “false and misleading testimony under oath” to the receiver about his assets, according to prosecutors.
Separately, Steiner is awaiting trial this spring on charges accusing him, his brother, Joel Steinger, and a one-time Mutual Benefits lawyer of conspiring to bilk investors between 1994 and 2003. (Although Steiner and Steinger are brothers, they spell their last names differently.)
Fecker was not charged in that fraud indictment, which was first filed in 2008.
So far, several former company employees, including president Peter Lombardi, have pleaded guilty and been sentenced to lengthy prison terms.
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