4th Circuit trims ex-businessman’s fraud convictions
Posted: 7:59 pm Mon, April 29, 2013
RICHMOND, Va. — A federal appeals court on Monday reversed five of a former Texas businessman’s 15 convictions in a $100 million life insurance fraud scheme.
A three-judge panel of the 4th U.S. Circuit Court of Appeals in Richmond also ordered a new sentencing for Adley Abdulwahab of Spring, Texas. Abdulwahab was sentenced to 60 years in prison after a federal jury in 2011 convicted him of conspiracy, wire fraud, securities fraud and money laundering.
Abdulwahab appealed all of the convictions. The appeals court tossed out only the money laundering convictions, which were based on commissions that Abdulwahab’s company paid to a sales agent in Richmond. The court ruled that those payments were essential expenses of the underlying fraud, not a separate act intended to conceal the origin of the funds or to perpetrate another fraud.
“We’re very pleased,” Abdulwahab’s attorney, Joe Gonyea, said of the ruling.
The government has argued in court papers that Abdulwahab’s sentence should not be affected because the term for the money laundering counts runs concurrently with his other 10 convictions. Gonyea disagreed.
“Certainly the judge should reflect the reduced amount of convictions. I’m hopeful he will,” Gonyea said.
The U.S. attorney’s office had no comment, spokesman Zach Terwilliger said.
Abdulwahab was one of the executives for a group of companies called A&O involved in the “life settlement” business. The company used investor funds to buy life insurance policies from policyholders at less than face value. Investors were supposed to be paid when the insured died, but A&O’s partners spent their money on lavish lifestyles rather than safeguard the funds and pay premiums to keep the policies in force.
The scam claimed more than 800 victims in 36 states and Canada. Many lost their life savings.
Abdulwahab was one of seven people convicted in the A&O conspiracy. In a related case, the president of a Costa Rican company that sold bonds purportedly backing the “life settlement” contracts was convicted on 10 counts and also was sentenced to 60 years in prison. An accountant who faked an audit for that company also was convicted.
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