The Minnesota Department of Commerce has summarily suspended the resident insurance producer license of Michael Antonello of New Brighton and charged him with insurance fraud and forgery. The department also summarily suspended the agency insurance license of Wealth Management Advisors of Minneapolis, of which Antonello is chairman.
In a 39-page order for summary suspension, Department of Commerce investigators allege that Antonello secured 44 life insurance policies from October of 1999 to December of 2004 on the life of John Paulson totaling $127.75 million. To secure that much insurance for one man, Antonello allegedly misrepresented to the insurance companies the total amount of coverage already in force for Mr. Paulson. He also incorrectly indicated on several applications that policies already in force for Mr. Paulson would be replaced by newer policies.
Antonello received large commissions from the sale of these policies and also profited from selling each of the policies to investors in the Stranger Originated Life Insurance (STOLI) marketplace after the two year incontestability period. STOLI policies are purchased by investors who take over the premium payments until the insured dies, at which time the investor receives the death benefit.
Several insurance companies have sued to rescind the policies and recover commissions Antonello has received.
Commerce investigators also outlined three other cases involving multiple life insurance polices and allegations of fraud:
- In a six month period from February to August of 2003, Antonello allegedly secured more than $38 million in life insurance for Irving Margolis. Antonello was paid significant commissions on these policies even though a substantial number of the applications contained material misrepresentations. After the two year incontestability period, the policies were sold to life settlement companies, allowing Antonello to profit from additional commissions on those sales. Antonello was also part owner of the limited liability companies that were beneficiaries on the policies.
- Between October 1995 and June 2003 Antonello allegedly secured more than $19 million in life insurance for Marjorie E. Ashbach. Antonello was paid significant commissions on these policies even though a substantial number of the applications contained material misrepresentations. The Ashbach policies were also sold on the STOLI market after the two year incontestability period. On August 28, 2000, Antonello even sent Ashbach a letter that stated, in part: “As you may recall, two years ago we were able to sell the old policy to another insurance company for a profit. This can be done every two years as long as we can get you insured at low rates…”
- In 2005, Antonello secured at least five different life insurance policies totaling $14 million for Marietta Campbell by directing her to sign the applications and return them to him blank. Antonello allegedly set up limited liability corporations in order to pay the premiums on these policies and then caused Campbell’s signature to be forged on change of beneficiary forms after she unexpectedly died in 2006. This case also resulted in litigation between the insurance companies involved and Antonello.
The Department’s order for summary suspension of Antonello’s license is effective immediately and will be considered at a hearing in front of Administrative Law Judge Bruce H. Johnson on May 14, 2009.
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