Two Houston men have been sentenced to lengthy jail terms for their part in a $100-million life settlement fraud scheme that victimized 800 victims people the U.S. and Canada.
Adley H. Abdulwahab, 36, a hedge fund manager and part owner of A&O Resource Management Ltd., was sentenced to 60 years in prison. Co-founder and vice president of A&O, Christian Allmendinger, 40, was sentenced to 45 years in prison. Many of the victims were looking for safe, conservative investments but lost their entire retirement savings, said U.S. Attorney for the Eastern District of Virginia Neil H. MacBride.
"These defendants used the savings of their unsuspecting, often elderly, investors to live the high life-luxury houses, fancy cars and even a 15-karat diamond ring," said Assistant U.S. Attorney General Lanny A. Breuer. "Having wiped out the life savings of many of their victims and stolen funds marked for retirement, Mr. Abdulwahab and Mr. Allmendinger appropriately now face significant prison terms."
"The victims of A&O's scam were looking for a conservative investment, and they were manipulated into believing A&O was a safe, secure, no-risk investment," MacBride added. "It was all a big, fat lie; A&O was a sham, a financial house of cards waiting to collapse. Hundreds of elderly retirees saw their life savings vanish, and their lives have been devastated by their loss."
Five others in the scheme, including David White, 41, the former president of A&O, who received 60 months in jail, were sentenced after pleading guilty. Abdulwahab and Allmendinger were found guilty at trial.
The principals at A&O misrepresented such things as A&O's prior success, its size and office locations, its number of employees, the risks of its investment offerings and its safety and use of investor funds, according to court and trial records. When regulators began looking into the investment scheme, the principals invented two sham companies to hide behind, Blue Diamond and Physician's Trust, court records say.