by Structured Settlement Watchdog
The Ponzi scheme du jour involves Danny Pang, an Orange County California financier who allegedly defrauded investors in life insurance policies (life settlements/viatical settlements).
What Are Life Settlements?
- Under Connecticut law, life settlements ”means an activity involved in, but not limited to, offering to enter into, soliciting, negotiating, procuring, effectuating, monitoring or tracking of life settlement contracts" See Definitions CT Gen Stat § 38a-465(3). (2022)
- Under California law, California Code, Insurance Code - INS § 10113.1 (k) “ Life settlement contract ” means a written agreement solicited, negotiated, or entered into in this state between a provider and an owner, establishing the terms under which compensation or any thing of value will be paid, which compensation or thing of value is less than the expected death benefit of the insurance policy or certificate, in return for the owner's assignment, transfer, sale, devise, or bequest of the death benefit or any portion of an insurance policy or certificate of insurance for compensation, provided, however, that the minimum value for a life settlement contract shall be greater than a cash surrender value or accelerated death benefit available at the time of an application for a life settlement contract.
Why Do People Sell their Life Insurance Policies?
They believe that their family doesn't need the protection of an income tax free lump sum at the insured's anymore
They cannot afford the premiums
Health issues/large medical bills and are willing to trade a large income tax free lump sum for a reduced lump sum now.
Sale of business if t the life insurance policies were used to finance a cross purchase or entity purchase buy sell agreementy for it either.
- Term insurance that is set to expire and they want to recover something from it.
Life Settlements Have Nothing to Do With Structured Settlements
Life settlements have nothing to do with structured settlements although it's bound to come up in the search results thanks to some shifty characters with a made for Adsense/Adwords website.
Read About Danny Pang the Life Settlement Fraudster.
Danny Pang died in 2009, after commiting suicide while waiting a 2010 trial (UPDATED)
- ‘About That $500 Million …’ | Courthouse News Service
- Pang Firm Left Some Big Funds Unaudited - WSJ
- Receiver: Pang's Fund Was a 'Piggy Bank' - WSJ
- California Financier Accused of Massive Fraud is Dead (cnbc.com)
- Danny Pang (financier) - Wikipedia
Last updated February 16, 2024