Doctor Sued
Other parties sued by the trustee include Donald T. Cassidy, a medical doctor hired by Pardo in 1999 who had no experience in estimating life expectancies for the life settlement market, according to the suit. Cassidy misrepresented the nature and accuracy of the life expectancies, concealing the existence of longer life expectancies and distorting the likely returns on investment, the trustee said.
With such investments -- also sometimes called viaticals or death bonds -- purchasers must pay premiums to keep the policies active until the insured dies and the death benefit is paid. The sooner death comes, the more an investor stands to profit. Likewise, investors are willing to pay more for policies on terminally ill people expected to die soon.
From 2008 to 2015, Cassidy received $1.6 million in funds from Life Partners, Moran said. Cassidy could not be reached for comment at phone numbers under his name in public databases.
Life Partners filed for bankruptcy in 2015 after a $46 million court judgment in which the company and Pardo were found by a jury to have filed false and misleading statements with the U.S. Securities and Exchange Commission.
The case is In re Life Partners Holdings Inc., 15-40289, U.S. Bankruptcy Court, Northern District of Texas (Fort Worth).