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New York Investment Manager Charged in Scheme to Defraud $34 Million from North Carolina Mutual

pexels-karolina-grabowska-4386393-300x200A former New York investment manager was charged this week for his alleged involvement in a scheme to defraud a North Carolina-based life insurance company out of over $34 million—putting it in danger of insolvency.

Bradley Reifler, 61, of Millbrook, NY, was charged with four counts of wire fraud and one count of perjury in a North Carolina federal courtroom. It is unclear if he has acquired the services of an attorney.

According to the indictment, the accused was the CEO and founder of Forefront Capital Holdings. He served as an investment advisor for North Carolina Mutual Life Insurance Company (N.C. Mutual), which has a long legacy in Durham, North Carolina. The 120-year-old company was founded by a barber and a doctor in 1989, and by 2000, it had grown to more than $77 million in revenue.

The former investment manager was purportedly tasked with investing over $34 million in assets belonging to N.C. Mutual. Court documents claim that instead of investing the funds in permissible investments, Reifler put the assets in high-risk or self-dealing investments “or otherwise divert[ing] funds for his personal and business use.”

A 2016 audit raised concerns about the investments he had made, and he attempted to conceal the scheme by falsifying supporting documents, prosecutors allege. He also allegedly caused others to falsify promissory notes, valuations, and agreements that purportedly underlaid investments made with N.C. Mutual funds. Authorities also claim that he submitted a false declaration in connection with a civil suit filed by N.C. Mutual in 2016 that accused him of participating in a “fraudulent scheme” to invest its assets to benefit his company. He allegedly falsely swore, under penalty of perjury, that his investments had been approved and all the assets had been properly invested.

As a result of the alleged fraud scheme, N.C. Mutual only recouped a portion of the approximately $34 million it gave to the accused. The company was unable to pay out claims to beneficiaries and was eventually placed under court-ordered rehabilitation, sources indicate.

The charges are just the latest development in the former investment manager’s contentious history with N.C. Mutual in recent years. When he filed a Chapter 7 bankruptcy petition in 2017, N.C. Mutual initiated an adversary proceeding to oppose “the discharge of his liabilities on the ground of fraud.” The bankruptcy court found that he attempted to and succeeded in destroying evidence related to those claims, according to sources.

N.C. Mutual was placed under rehabilitation in December 2018, putting it under the control of the North Carolina Department of Insurance (NCDI). The NCDI released a statement in support of the indictment against the accused:

“These charges stem from the same conduct by Mr. Reifler that is the subject of N.C. Mutual’s civil lawsuit against him in the same federal district court in 2016 to recover over $34 million of assets,” the statement said. “Insurance Commissioner Mike Causey and the Department are hopeful this action by USDOJ will result in a resolution favorable to the policyholders who have suffered because of Mr. Reifler’s action.”

The U.S. Department of Justice’s press release notes that the indictment against the defendant is merely an allegation and that all defendants are presumed innocent until proven guilty in a court of law.

Considering the severity of the penalties of a fraud conviction, anyone accused of committing fraud should immediately seek experienced legal counsel. A capable attorney can conduct an unbiased review of the available evidence and craft a winning defense strategy that can reduce the potential penalties or have the charges dropped altogether.

South Florida Fraud Defense Attorney

Are you accused of committing fraud in South Florida? Contact Brian Silber, P.A. to set up a free initial consultation with one of South Florida’s most experienced fraud defense attorneys.

Source: 12.3.20 Former investment manager  charged in scheme to defraud insurer.pdf

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