Daniel Carpenter, 64, of Simsbury, was sentenced yesterday in Hartford to 30 months of imprisonment, followed by three years of supervised release.
Carpenter was convicted of defrauding insurance companies into issuing insurance policies on the lives of elderly people for the financial benefit of himself and other investors in the scheme.
Carpenter was found guilty on June 9, 2016, of 57 counts of conspiracy, mail and wire fraud, money laundering and illegal monetary transaction offenses stemming from the scheme, also known as a stranger-originated life insurance scheme.
Carpenter controlled a series of companies, based in Simsbury and Stamford, that developed the Charter Oak Trust, an employee welfare benefit plan and trust. The primary objective of the trust was to secure insurance policies on the lives of elderly individuals that could be held by Carpenter’s companies as investments, or resold on the life settlement market, which is a third-party market for life insurance policies.
Typically, insurance agents working with, for or on behalf of Carpenter and his companies approached elderly individuals, also known as “the straw insured.” The agents promised to provide the straw insured people with free life insurance for two years, and, at the end of the two years, would attempt to sell the policies on the life settlement market. In most cases, the agents promised the straw insured that they would receive a portion of any sale proceeds.
The evidence at trial established that Carpenter, working with insurance agents, submitted applicants that contained several material misrepresentations to several insurance providers.
Based on the false applications that were submitted to the insurance providers, the Charter Oak Trust procured 84 insurance policies that had a total aggregate death benefit of more than $459 million on the lives of 76 different straw insured people.
In addition, another company controlled by Carpenter received more than $12 million in commissions from the insurance providers, who would not have paid the commissions had they known about the false representations on the insurance applications and the true nature of the Charter Oak Trust.
Finally, the trial evidence showed that one straw insured person died within the first two years of the issuance of the two insurance policies on his life. Those policies had been issued in late 2006 and early 2007 based on misrepresentations similar to those described above, specifically that his policies were not being funded by a third party and were not intended for resale.
The two insurance policies had a combined death benefit of $30 million, which the insurer paid to the Charter Oak Trust in May 2009. At Carpenter’s direction, Charter Oak Trust failed to pay the $30 million to the straw insured’s beneficiary, and instead used the funds to pay for various expenses, including other insurance premiums that were related to the underlying fraud, as well as to purchase a home in Rhode Island.
Carpenter, who is released on bond, was ordered to report to prison on March 4, 2019.
Carpenter was previously convicted in Massachusetts of mail fraud and wire fraud offenses stemming from an unrelated business scheme. He was sentenced to 36 months of imprisonment for those offenses in 2014.
