Imperial Holdings, Inc*, a Boca Raton, Florida company that was involved in life insurance and structured settlements, was raided by the Federal Bureau of Investigation last week, under the authority of a search warrant issued by a Magistrate Judge in US District Court for the Southern District of Florida. Reports indicate that the investigation originated in the District of New Hampshire. Trading was halted in the company's publicly-traded stock on the New York Stock Exchange, which plunged 60% after the raid. A number of the company's officers and directors are also reportedly under criminal investigation. Some reports state that the company's offices are closed, but this is unconfirmed.
Imperial was engaged in three categories of finance. First, making purchases of structured settlements, which are generally long-term annuities, where the recipient agrees to receive a discounted lump sum from the company, and sells the rights to receive future payments . Second, Premium Financing, where holders of life insurance policies borrow the money necessary to purchase, or maintain, the policies. Finally, the company purchased what are known as life settlements, (in the UK called traded life policies) life insurance policies from the owners and beneficiaries, who receive a discounted payment, and assign over the death benefits to the company.
The company has announced that it is cooperating in the investigation; The company's CEO** has stated that "we are not aware of any wrongdoing, and will cooperate fully with all relevant authorities to assist in their investigation."
Companies involved in Life Settlements in the United States have been targeted by law enforcement agencies since the billion-dollar Mutual Benefits Corp.*** scandal a decade ago.
** Antony Mitchell
*** SEC vs. Mutual Benefits Corp., 408 F.3d 737 (11th Cir. 2006), affirming SEC vs. Mutual Benefits Corp., 323 F. Supp. 1337 (SD Fla. 2004).