A pair of former executives with Southport Lane, L.P., a private equity investment holding company that specializes in managing investment portfolios for insurance companies, were charged with participating in a massive insurance fraud scheme. According to authorities, the scheme resulted in hundreds of millions of dollars in losses for its victims.
The two individuals were charged with a count of conspiracy to commit crimes by or affecting persons engaged in the insurance business, a count of conspiracy to commit wire fraud affecting financial institutions and five counts of wire fraud affecting financial institutions.
According to the indictment documents, the two men and their co-conspirators encouraged insurance companies to exchange cash and other liquid assets for knowingly overvalued securities they created. They would act as investment advisors for those insurance companies to gain access to the management of their investment portfolios. They would then use Southport and other affiliated entities to develop those fraudulently overvalued securities, and replace assets held by their victims with those overvalued securities. Collectively the victim companies lost hundreds of millions of dollars.
Without the assistance of whistleblowers, it would be extremely difficult to uncover these types of schemes. A significant portion of fraud cases taken on by the federal government start thanks to a whistleblower tip, and would not have been uncovered by routine audits or investigations.
To that end, if you are aware of wrongdoing within your workplace, it is important you follow the proper protocols to report it to the necessary parties. Blowing the whistle can not only bring the corruption to a halt, but could also result in you being granted a significant award for your contribution to the ensuing investigation.
For more information on how to proceed with a whistleblower claim, reach out to the team of experienced attorneys at Kardell Law Group.