A man with graying hair and an open collared shirt, presumably her husband, is draped over her in a casual loving way. The woman sits next to a computer, sporting a stylish haircut and wire-framed glasses. On the cover is a photo of a youthful older couple. The secret to Caramadre's scheme can be glimpsed in a 2006 brochure for the ING GoldenSelect Variable Annuity. In his rulings to date, the federal judge hearing the civil cases has agreed with Caramadre's contention that he was doing what the fine print allowed. The companies have argued in court that Caramadre is a fraud artist who should return every last dime he made.
Their hunger for profits in a period of dizzying growth and competition, he contends, left them vulnerable to someone with his unusual acumen.
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In a series of detailed interviews, Caramadre said the companies designed the rules all he did was exploit them. Particularly during the lead up to the financial crisis, companies wrote billions worth of contracts that now imperil their financial health. ProPublica has taken a close look at the Caramadre case because it offers a window into a larger issue: The transformation of the life insurance industry away from its traditional business of insuring lives to peddling complex financial products. For them, Caramadre's can't-miss investment strategy was an illusion in which he preyed on the sick and vulnerable.
Prosecutors contend he deceived the terminally ill to make millions for himself and his clients. Number 18 came to fruition, he says, when a sizeable segment of the life insurance industry ignored centuries of experience and commonsense in a heated competition for market share.įederal prosecutors in Rhode Island and insurance companies paint a very different picture of Caramadre: They say he's an unscrupulous con artist who engaged in identity theft, conspiracy and two different kinds of fraud. As he tells his life story, his native ability helps him outsmart a phalanx of high-priced lawyers, actuaries and corporate suits. He has given millions to charities and the Catholic Church. He's an Italian kid from Providence, R.I., who grew up modestly, became a certified public accountant and then put himself through night school to get a law degree. But the one that landed him on the evening news as a suspect in a criminal conspiracy was number 18, which promised investors a unique arrangement: You can keep your winnings and have someone else cover your losses.Ĭaramadre portrays himself as a modern-day Robin Hood. Number three consisted of a sure-fire but short-lived system for winning money at the local dog track.
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For example, there was number four, which involved an office superstore coupon he parlayed into enough nearly free office furniture to fill a three-car garage. There have been about 19 in his lifetime, he says. He calls these insights his "creations," and he numbers them.
He's hardwired to seek the angle, an overlooked clause in a contract that allows him to transform a company's carelessness into a personal windfall. Joseph Caramadre has spent a lifetime scouring the fine print. 16, 2013: A federal judge sentenced Joseph Caramadre to six years in prison for his role in an investment scheme that recruited terminally ill people to sign over death benefits to passive investors.
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