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Company: Mutual Benefits Corporation
Ticker Symbol:
Class Period: Late 1994 through the present
Court: Southern District, FL
Date Filed: May-28-04
Lead Plaintiff Deadline: Jul-27-04
A class action lawsuit has been filed in the United States District Court for the Southern District of Florida on behalf of all persons who purchased viatical or life settlement contracts or otherwise invested through Mutual Benefits Corporation ("MBC" or the "Company") including those investing in MBC through Viatical Benefactors, LLC ("VBLLC") during the period from late 1994 through the present ("Class Period").

The complaint charges defendants MBC, Viatical Benefactors, LLC ("VBLLC"), Viatical Services, Inc. ("VSI"), Kensington Management, Inc. ("Kensington"), Rainy Consulting Corp. ("Rainy"), Twin Groves Investments, Inc. ("Twin Groves"), P.J.L. Consulting, Inc. ("P.J.L."), SKS Consulting, Inc. ("SKS"), Camden Consulting, Inc. ("Camden"), Joel Steinger a/k/a Joel Steiner ("J. Steinger"), Leslie Steinger a/k/a Leslie Steiner ("L. Steinger"), Peter Lombardi ("Lombardi"), Steven Steinger ("S. Steinger"), Henry Fecker, III ("Fecker"), Clark C. Mitchell ("Mitchell"), Edgard Escobar ("Escobar"), Anthony LaMarca ("LaMarca"), A.M. Livoti, Jr., P.a. and A.M. Livoti, Jr. (collectively "Livoti"), Citibank, N.A. ("Citibank, N.A."), Union Planters, N.A. ("Union Planters"); RBC Centura Bank ("RBC"), and First Southern Bank ("First Southern") with violations of Sections 12(a)(1), 12(a)(2), and 22(a) of the Securities Act of 1933 ("Securities Act"), and Sections 10(b) and 27 of the Securities Exchange Act of 1934.

The complaint alleges that since late 1994, MBC has operated as a viatical and life settlement provider, raising money from investors to purchase viatical and life settlement contracts. A viatical or life settlement contract involves the sale of a life insurance policy by a terminally ill person or senior citizen (known within the industry as a "viator") at a price discounted from the face value of the policy. Investors pay the premiums, and receive the face value of the life insurance policy when the insured, or viator, dies. In turn, the viator receives a portion of the proceeds of his life insurance policy in a lump sum. On information and belief MBC has allocated investor funds to approximately 9,559 life insurance policies with an aggregate anticipated death benefit of approximately $1.7 billion. MBC promised investors guaranteed, fixed rates of return ranging from 12% to 72%, depending upon the term of investment chosen by the investor. The life expectancy of the viator, as determined by MBC, in turn, determines the total rate of return.

Specifically, the complaint alleges that since 1994, defendants have operated or aided and abetted a billion dollar Ponzi scheme and defrauded at least 29,000 investors -- many of whom are retirees -- by issuing a series of material and misleading omissions and false statements, breaching escrow agreements and breaching their fiduciary trust to investors. The complaint alleges that defendants failed to disclose and misrepresented the following material adverse facts which were then known to defendants or recklessly disregarded by them: (1) that new investor funds were diverted to cover shortfalls on the funds escrowed to cover life insurance premiums on policies assigned to earlier investors; (2) that there were gross inaccuracies in the calculated life expectancies of viators; (3) that insurance premium escrow accounts were commingled and deficient; (4) the Steingers' civil disciplinary backgrounds as well as $26-plus million in "consulting fees" paid to the Steingers or to entities that the Steingers controlled were not disclosed to investors; and (5) that MBC does not require that its sales agents be licensed, and that several of MBC's sales agents have been the subjects of state cease-and-desist orders in connection with the MBC offering.

On May 5, 2004, the United States Securities & Exchange Commission ("SEC") and federal marshals raided MBC's south Florida offices, seized the company's records and shut down MBC's operations.

If you acquired the securities of the defendants during the Class Period you may, no later than the Lead Plaintiff Deadline shown above, request that the Court appoint you as lead plaintiff through counsel of your choice. You may also choose to remain an absent class member. A lead plaintiff must meet certain requirements.

If you feel you qualify for damages or remedies that might be awarded in this class action please click here to fill in our form to submit your complaint.

If your injustice does not match the complaint described above, please use this form to register your complaint. Thank you.

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