Journalism in the Public Interest

Insurance Schemer Cops a Plea

Joseph Caramadre made a profit dealing in insurance products that paid out when someone died. He said he paid the terminally ill to participate, creating win-win deals. Now, he’s pleaded guilty to fraud and identity theft.


Rhode Island financial planner and lawyer Joseph Caramadre pleaded guilty to identity theft and wire fraud, two counts in a 66-count indictment a grand jury returned against them last year. (Matthew Healey for ProPublica)

In a trial closely watched by the insurance industry, Rhode Island attorney Joseph Caramadre and his former employee Raymour Radhakrishnan pleaded guilty today to charges that they conspired to steal the identities of the terminally ill.

ProPublica wrote about Caramadre's scheme last August in "Death Takes a Policy." He recruited the terminally ill to sign up for products such as variable annuities and bonds that, upon the death of participants, could pay out handsome benefits to Caramadre, his family members and outside investors. Acting on Caramadre's behalf, Radhakrishnan signed up the people whose deaths would trigger the benefits.

In interviews with ProPublica before the trial, Caramadre described the scheme as a win-win. Caramadre or his investors put up the money and reaped the reward, but he paid the terminally ill several thousand dollars or more to participate. They themselves usually could not afford the annuities and bonds he purchased. In Caramadre's view, he was offering money to the needy that they had not expected to receive. Some family members of the terminally ill agreed, while others felt exploited.

The two men pleaded guilty to identity theft and wire fraud, two counts in a 66-count indictment a grand jury returned against them last year. As part of the plea deal, prosecutors will not ask for more than 10-year sentences for each man. Ultimately, it will be up to the judge's discretion how much prison time they receive. Sentencing is scheduled for Feb. 8.

As part of the plea agreement, Caramadre and Radhakrishnan agreed that the object of the scheme was to defraud the insurance companies and bond issuers. The two men did so by obtaining the identity information of terminally ill individuals through false explanations as to why their signatures were required. They also took steps to prevent the terminally ill from understanding the documents they were signing. In some cases, the signers never even saw the full documents to which Caramadre attached their signatures.

As part of the bond purchasing part of the scheme, the two men opened a brokerage account with T.D. Ameritrade. They transferred $280,000 into the account, which constituted wire fraud, according to the plea agreement.

"This is a significant case of identity theft on a grand scale," says Jim Martin, a spokesman for the United States Attorney in Rhode Island.

In remarks outside the court house, U.S. Attorney Peter Neronha told the Associated Press that "today's message is that greed is not good."

A spokesman for Caramadre released a statement that he "has made a decision that acceptance of this plea agreement is in his best interests and the best interests of his family."

The plea agreement came unexpectedly on the second week of a trial that was expected to last for months.

It’s important to also note that “facts” in a plea are different than facts in real life

That’s disappointing.  So, basically, what he has done is now de facto illegal because the insurance companies are willing to commit bottomless pockets to bankrupting anyone who has the nerve to create a win-win situation where they aren’t both winners.

I’d bet good money (though not with an insurer) that Jim Martin is “destined” for Federal office in the next couple of years.

Once again a demonstration of the power of insurance (financial instrument) industry using the federal attorney’s office to punish another for their own greed. Law school long ago taught the illegality of selling an insureable interest on another’s life but the industry, in pursuit of profit, legislated just such in creating viaticles(sp) and should have had to reap the result.

Sound like Propublica bought into a criminal’s bs and wrote his story without fact checking.  How much of the original article was actually reporting and how much was fed to propublica by Caramadre’s professional “reputation manager,” Greg Perry?

Caramadre now admits lying to terminally ill people to get their identity information.  Not sure why that is the insurance companies’s faults.  He also admitted lying about the terminally ill epople’s investment backgrounds and assets to purchase bonds.  That’s not a loophole.  That’s a lie.  Propublica has some big egg on its face right now.

If I found out I was terminally ill, I would love to look this guy up and stick it to the parasite insurance companies. He would not have to lie to me to get me to participate.

I.D. theft…surely you jest…

I.D. theft has/is being perpetrated on others nonstop and as we speak, but the prosecution of it by the authorities is not nearly as zealous as when someone is beating the insurance business at it’s own game.

When it comes to deep pocket insurance companies, what is good for the goose is not ever considered to be good for the gander…


Nov. 23, 2012, 3:10 p.m.

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