More than 900 investor victims in an allegedly fraudulent New Braunfels insurance group might share an initial $7.7 million payment, a court-appointed receiver recommended this week.
The amount accounts for about 10 percent of the money backers paid into Retirement Value LLC. Travis County state District Judge Stephen Yelenosky shut down the company last May after a request from the State Securities Board and Texas Attorney Generalâ€™s Office. The state accused the firm of securities fraud and deceptive practices in selling life-settlement investments.
The receiver, Dallas-based K&L Gates LLP attorney Eduardo Espinosa, said the distribution is the first of several he expects over time. In addition to underestimating the life expectancy of life insurance policy holders, the company also â€œfailed to maintain meaningful or appropriate financial records,” Espinosa said.
The fund collected more than $77 million from investors in just 10 months in 2009 and 2010.
Espinosa also recommended maintaining life insurance policies acquired by Retirement Value, which in effect means investors will have to wait longer to recover principals. He said, however, that strategy will provide the best possible return.