Nine people and seven corporations were indicted Wednesday on charges they swindled more than $100-million from National Heritage Life Insurance Corp., bringing about the company's collapse.
A 93-count indictment, returned by a federal grand jury in Orlando, included charges of fraud, racketeering, dealing in stolen property and money laundering. Indicted defendants and companies were in New York, Illinois, North Carolina and Florida.
"According to industry sources, this is the largest insolvency occasioned by fraud in the history of the United States," U.S. Attorney Charles R. Wilson said. "The defendants are alleged to have engaged in various schemes from April 1992 until April 1998 to defraud National Heritage Life of money and property and both the insurance company and its parent, LifeCo, their shareholders and policyholders of their right to honest services."
Seven others previously have been convicted or pleaded guilty in the expansive case.
National Heritage collapsed in 1994, with the Delaware Insurance Commissioner appointed receiver for the defunct insurance company, based on a finding that the company's capital had been severely impaired.
The indictment says a labyrinth of transactions portrayed National Heritage as having growing assets when they were dwindling.
Fraud schemes included the diversion of more than $100-million in cash, phony credit lines, the sale of fraudulent mortgage-backed securities and diversion of income from those securities, according to the indictment.