DALLAS (CN) - A North Texas man used elderly straw buyers to scam full commissions away from several life insurance companies, federal prosecutors say.
Vincent Bazemore, 38, formerly of Aubrey, Texas, was indicted Wednesday of four counts of mail fraud. He is currently serving a five-year sentence in federal prison on an unrelated 2009 securities fraud conviction.
Between October 2009 and April 2009, Bazemore worked as an insurance agent and issued stranger-initiated life insurance policies, or STOLIs, for applicants of modest financial means, according to the indictment. Bazemore allegedly misrepresented these individuals to the insurance companies, however, as wealthy and seeking the insurance for estate-planning purposes.
He then transferred the policies to investors, though insurance companies condemn this practice.
"STOLI policies circumvent state insurable interest laws and are inconsistent with the established and legitimate purposes of life insurance," the 15-page indictment states. "In order to deter STOLI policies, life insurance companies required applicants to meet certain standards."
Prosecutors say Bazemore solicited elderly individuals to apply for the multimillion-dollar policies, telling them the life insurance was an investment with no financial cost or exposure and would result in a sizable monetary benefit to the individual's heirs.
"Bazemore would then prepare the applications and related documents, on behalf of the applicants, that contained forged signatures and falsified financial information to induce the life insurance companies into issuing the policies," according to a statement from the U.S. Attorney's Office. "Bazemore is also alleged to have submitted the false and fraudulent applications and related documents to financial institutions to obtain premium financing on the policies. ... Bazemore had agreements with insurance companies and managing agents which provided that he would receive, for each policy issued on an application he submitted, a commission of 95 to 105 percent of the first year's premium paid on the policy."
Insurance companies to which Bazemore submitted applications include Principal Life Insurance Company, Transamerica Occidental Life Insurance Company, ING Annuity and Life Insurance Company, John Hancock Life Insurance Company, Sun Life Assurance Company and Metropolitan Life Insurance Company.
Bazemore faces up to 20 years in federal prison and a $250,000 for each of the mail-fraud counts. He also faces a 10-year penalty enhancement because he allegedly committed these crimes while on pretrial release for his previous securities fraud case.
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