Update - January 02, 2008

General News:

The following is from the November Update but as these topics seems to be on the minds of the investors, it is repeated.

Both the Receiver and Examiner have been contacted by many investors asking whether the investors will be paid their full principal amount invested from the receivership. Second, we are asked many times why this process is taking so long.

As to the question of the return of the full amount of an investor's principal investment, it is highly unlikely that the Receiver will be able to return to investors the full amount of the principal invested. ABC was engaged in what is referred to as a Ponzi scheme. Money from many investors was used to pay previous obligations of earlier investors, including premiums, and as a result when the Receiver took over, there was a substantial lack of funds necessary to pay future premiums and operate the company. As well, viators have not died within the time frames expected. There is no way to predict even the range of the return that investors can expect as the outcome could change dramatically if certain of the viators die allowing death benefits to flow to the receivership estate. Remember, as a result of the Court's order pooling all the policies and the future death benefits or sale proceeds, both death benefits and sale proceeds will be paid to the Receivership estate to be shared amongst all ABC claimants.

As to the second question of why this process takes so long, a more complete explanation is warranted. Please understand that this proceeding is in its initial stages. Two major tasks are being pursued simultaneously (1) asset protection and liquidation to form a pool of money from which investors can be paid, and (2) the review and Court approval of all claims.

As to the first, the Receiver must develop a strategy that is designed to maximize the value of the assets of the Receivership so that the most money can be returned to the investors. The assets of this Receivership are not simply cars or real estate, they are relatively complicated assets in the form of insurance policies on which key information is needed, if it can be obtained at all, to understand the value of the assets and it must be marketed to a unique set of buyers. A specific written plan then needs to be submitted to the Court and approved. The Receiver has been trying to get updated information on the policies and the viators and has now developed a plan for how to deal with the policies. The plan is set forth in more detail below.

Second, as described below, over 3700 claims have to be processed and approved by the court. The Receiver is hopeful that most of the claim forms and supporting documentation have been received. No distribution of funds can occur until ALL CLAIMS are processed and approved by the Court. The Receiver must review each claim and the supporting documentation to confirm the amount of the investment of each investor and if there are differences, work with the investors to clarify the amount of the claim. He must then seek the Court's approval of the amount of each claim. As the Receiver will likely be distributing a percentage of each investor's principal investment, the Receiver must know the total amount of all court approved claims before he can determine what share an individual investor will be paid. Should the Receiver have any questions concerning your claim, he or his representatives will contact you directly. Do not contact the Receiver's office to check on the status of your claim as this will only further delay the process and increase the costs of the Receivership.

Many of you are encouraging the Receiver to promptly sell the entire portfolio. As will be described in detail below, a plan has been agreed upon between the Receiver and the Examiner as to how to proceed with a sale of some of the policies, but the Receiver and Examiner believe that selling the entire portfolio for a "quick" return will produce the lowest return to the investors. Thus, the Receiver at present intends to hold on to a number of the policies to enhance the chance of the largest possible return to the investors.


LaMonda: The LaMonda brothers have been sentenced. Keith LaMonda received a sentence of 20 years in prison and was directed to pay $89,000,000 in restitution to three classes of investors relative to conduct prior to ABC Viaticals, Inc. His brother Jess LaMonda received a 13 and one half year sentence and was ordered to pay the same restitution. Also, John Maynard who was one of the principals of ATCO, one of the first trustees for Accelerated Benefits Corporation and ABC Viaticals, was sentenced to about ten years in prison.

Kaplan: As you may recall, the Receiver has filed suit against one of the largest brokers/facilitators of ABC viatical interests, Donald Kaplan. Mr. Kaplan was sued in the Dallas Court overseeing the Receivership and he filed various motions to dismiss the Receiver's claims and to try to move the proceeding to California. The court has essentially denied all of his motions and entered a Scheduling Order calling for the matter to be set for trial in May of 2008. The Receiver has filed suit against Mr. Kaplan for approximately 1.2 million in commissions. The 1.2 million dollar damage figure is based on what the records of ABC show as paid to Mr. Kaplan. Mr. Kaplan did not sell all of the investments received by ABC although he was substantially involved in the sales of investments to the Taiwanese. Discovery will commence soon and the matter prepared for trial or settlement.

Erwin: No new news on this matter.

IFS: The suit against this bonding company and the individuals is winding down. The Receiver sued IFS, Wollock, Goldenberg, KPMG International and Hawks Legal. As you know the Receiver has a judgment against IFS and Mr. Wollock for $48,000,000. Mr. Goldenberg, another primary principal in the scheme to sell the IFS bonds, recently committed suicide. The Receiver is continuing to search for assets held by all of the Defendants in this case to maximize the return for the estate. Mr. Goldenberg's wife has been deposed. Some insurance policies were found but it is unclear at this point what the Receiver will and can do with them. The Receiver is continuing to investigate the company that allegedly took over for IFS ( Galax Management) and the legal and accounting firms that were alleged to have been involved with IFS (Hawks Legal and KMPG International).

Prior Trustees: The Receiver has been asked why he is not bringing claims against ATCO and the Mills Potozac firms who served as trustees of the ABC viatical trusts before Erwin & Johnson. Although the first trustee, ATCO, does not appear to have established premium escrows, it does not appear that ATCO is in business any longer, nor that ATCO or its principal David Piercefield would be able to pay any judgment that the Recevier might obtain. As to the Mills Potozac firm, our investigation and that of the SEC revealed that Mills Potozac attempted to force ABC to escrow money and fund the policies as required. The investigation reveals that when ABC tried to bribe representatives of Mills Potozac to do disburse money inconsistent with their obligations, they resigned their position rather than follow an illegal path. Under these circumstances, the Receiver does not presently intend to spend money pursuing these former trustees.

General: The Receiver is evaluating additional claims for other fraudulent transfers of ABC's assets to determine the likelihood of recovery of those transfers for the benefit of all investors.


As previously reported, the Receiver believes that claim forms have been sent to all known interested parties. If an investor knows of anyone that invested in ABC that did not receive a claim form, please let us know by contacting the Examiner by email at the email address on the home page of this site. At present there are 3718 claims. This is a very large number of individual investments. There are 2653 investors. Each claim form submitted must first be logged into a database that is maintained by the Receiver. This is done by one person in the Receiver's office to assure consistency in the database. This process is essentially complete. The Receiver' staff will next begin reviewing the claim forms and supporting information provided by investors and comparing them to the records of ABC. Where there are inconsistencies, investors will be contacted and attempts made to clarify the claim. This process is complicated by the fact that a large number of these claims belong to persons in Taiwan and Puerto Rico. However, the process is expected to proceed more promptly than in other cases because the records of ABC have been found to be reasonably accurate and up to date. It will take a significant amount of time to complete the claims review. The Receiver will have one person in charge of the process and two employees working to review and submit the claims to the Court for approval or otherwise contacting investors regarding the treatment of their claim. The Receiver estimates that the approval process will be completed by the end of the summer of 2008.


When claims are paid, they will be paid without regard to the length an investment has been held by ABC or the amount of the promised return. Those who invested earlier in the process will be treated no differently than those that invested later. Those who invested early had their investment maintained by the money paid by later investors and in the eyes of the Receiver and Examiner deserve no special treatment.

Sale of the Insurance Policies:

The over all plan for the sale of policies was discussed in general in the November update. More specifics are provided here.

The first step in the sale process has been to put the key information known to the Receiver on a special web site that can be accessed by qualified potential buyers. The web site information will include, where available, such things as the policy, policy premium illustrations, known medical and life expectancy reports and the like. These materials will not include updated medicals for the reasons identified before relating to the difficulty, expense and even impossibility of obtaining this information. This web site will be available to potential buyers for review and consideration in association with any bid they may make for the purchase of some or all of the policies as explained below. At present the web site with this information is not available for access and will not be made available until the Court approves the Receiver's plans for sale of the policies. ONLY interested and financially qualified potential buyers will be given access to this information. Each will be asked to sign a confidentiality/non-disclosure agreement and pay a fee to the Receiver to cover the cost of the web site.

The Receiver will notify the many persons who have expressed serious interest in the insurance policy portfolio of the opportunity to qualify to see the portfolio and submit a bid. The fact that the portfolio information is on the web will be announced on this website so that investors know it is going up for sale.

The Receiver intends to ask potential bidders to submit a bid for the entire portfolio, and then certain specific groupings of the policies. The policies in these alternative sub-groups will also be posted on this website.

The Receiver will allow a set period of time from the date the web server is available (probably 90 days) for interested parties to review the information and submit a bid. There will be a bid deadline. The Receiver will not be required to accept any of the bids. If in the opinion of the Receiver and his consultants there is a bid sufficient to compel the Receiver to go to the Court and request approval of a sale at the bid price, the Receiver will file a motion with the Court specifying the polices that will be sold. This motion will be posted on the English and Chinese sides of this website.

The Receiver believes that the potential buyers of these policies will be major institutions. These are large polices and will require substantial payments to the Receiver and significant premium costs going forward.

In January 2008 the Receiver will file a motion to approve the bid and sale procedures outlined in this update. This motion will be posted on the English and Chinese websites. This Motion will seek approval by the Court of the procedures outlined above. It must be approved by the Court and that will likely occur in February 2008. If approved, the due diligence web server will then be turned on and bids will likely be made in May 2008. If an acceptable bid is received, the Receiver will sign a letter of intent or contract for sale that must be approved by the Court. He will then file a motion to sell either all of the policies or the sub-group of policies on which an acceptable bid has been received. The motion to sell will be set for a hearing and the Receiver will proceed to demonstrate to the Court that the bid should be accepted. The Receiver will try to allow 30-45 days between the filing of the motion and the actual hearing so that all potential buyers will have notice and investors will have the opportunity to comment to the Examiner on the potential sale.

At the hearing to approve the sale, the Court will also allow for others who did not submit the highest bid to come to the Court at that hearing and make an "over bid". The "over bid" will be required to be at least 10% more than the bid submitted. If an over bid occurs, the Court will then conduct an auction to get the highest bidder possible. If the original bid that is submitted to the Court for approval is not the winning bid, the original bidder will be paid a "break up fee" which is a fee intended to compensate the original high bidder for his trouble. The amount of the break up fee will be included in the bidding procedures to be approved by the Court. If and when the sale is approved, the Receiver will then proceed to transfer the policies sold and collect the sales price for the benefit of the investors.

The Receiver and Examiner believe that by informing a wide range of potential competitive bidders of the sale, providing the same information to all, obtaining a number of competitive bids, and the use of the "over bid" auction process, the highest market price available for the policies will be obtained.

We have been told by some investors that they have knowledge of persons interested and capable of purchasing the portfolio and we ask that these investors contact these potential buyers and advise them to monitor this website for the announcement of the beginning of the sale process.

Comparison to other Viatical/ Life Settlement Receiverships:

Some investors have indicated to the Receiver and the Examiner that other viatical / life settlement receiverships are being handled in a different fashion and producing very high returns. These claims have been investigated. As each other receivership is a mix of its own specific and unique facts, the Examiner will not try to respond to each of these issues. Investors who hear this kind of thing are encouraged to make a full investigation of the facts as the "summary rumors" are not always as true or clear as they may seem. For instance, we heard that the Mutual Benefits Receivership investors were getting a 90% or better return. All you have to do is go to the www.mbcreceiver.com website and you will see this is not true. Some people sold their policies for a return between 4% and 33%, some lost their investment all together and some are paying more premiums with no end in sight hoping on a death to occur. It is clearly possible that those that chose to pay their premiums had an immediate maturity and got a high return but that is not to say that everyone in that proceeding is getting a 90% return or better.

Financial Status:

All policies are paid current. No maturities have occurred although one of the spouses in a large second to die group of policies has passed away. The Receiver has a nine million dollar line of credit that has been drawn substantially and is in the process of requesting that the bank increase that line to allow for the time necessary to complete the sale process set out above.

The Receiver has sold some of the LaMonda's assets generating about $100,000 -$200,000 in cash. There are assets to sell.


The Receiver and Examiner hired a private investigator to investigate Albatross Invest S.p.A. and its current status. The news is not good. Albatross is essentially no where to be found and there is no human associated with the entity. The Receiver and Examiner did not travel to Italy in the late summer or early fall awaiting the outcome of the investigation which proved that a trip would have been an unnecessary expense. Based on this investigation and other information that the Receiver has learned but does not want to post at this time, the Receiver and the Examiner are of the belief that Albatross is in fact a fraud and that it cannot be expected to pay as agreed under the terms of the bonds. It has no current place of business, the individuals formerly associated with the company cannot be located and there are no known assets of the company for payment of bonding obligations. The Examiner did receive an email in December 2007 allegedly from Albatross Invest S.p.A. It had no address, phone or fax and was sent from the equivalent of a "yahoo" account. The Examiner has responded with a specific request for a substantial amount of information that would help demonstrate that Albatross is a bona fide company and offered to meet promptly with Albatross representatives. The Examiner has received no response.

The bonds of Albatross were purportedly secured by Support Letters from Unicredit Xelion Bank. Unicredit Xelion Bank is in fact quite real. Official inquiries are being made to Unicredit regarding the Support Letters to gain a more detailed and formal written response from Unicredit as to their knowledge of the letters, the validity of the letters and their intentions with respect to same. This site will be updated as the information is made available.