By Terrence McCoy
By Scott Fishman
By Deirdra Funcheon
By Allie Conti
By New Times Staff
By Ryan Pfeffer
By Deirdra Funcheon
By Kyle Swenson
The practice of legislators recommending lobbyists is odious. They are supposed to be agents of the people, not lobbyists for lobbyists. Has Geller given Klenet a lot of work over the years?
"This is probably the only one. There may be one other that I don't remember right now," Geller said. "This is certainly the only big client I know of... Over 20 years, I may have [recommended lobbyists] 20 times, and maybe that resulted in people hired ten times, and this is the only one I recall that Russ got. There may have been a small short-time one that I don't remember."
Klenet and, by extension, Ritter, made a fortune from Geller's recommendation. Here's how Klenet described in the 2005 deposition how he got Steinger to pay for the renovation:
"One day I was sitting and visiting with Joel, who knew I had recently purchased a house and was in the middle of decorating it, and I said to him, 'You know, it wouldn't be so terrible if you picked up some of my renovations in the house.' He said, 'OK, great.' "
The payments for the renovations to Ritter and Klenet's home, curiously, were paid directly to the decorator, identified as "JSD," but Klenet testified in the SEC deposition that they were reported to the IRS.
Even after the Securities and Exchange Commission shut down Mutual Benefits for its fraudulent behavior, Klenet retained ties with Steinger and other company executives. One of those execs was Steven Steiner, who is Steinger's brother, despite the oddly different last name. In 2004, Klenet purchased Life Settlements International, another viatical firm, with the help of nearly $2 million in investments from Steiner and his life partner, Henry Fecker.
Steiner and Steinger were indicted by the feds in January. Klenet sold Life Settlements International for $1.7 million in July. Steiner and Fecker sued Klenet in December for their share of the sale.
The burning question: Was the money that Steiner and Fecker put into Klenet's company ill-gotten gains from Mutual Benefits? And if so, did Klenet know it?
Klenet not only kept associating with the crooks at the company but defended them in the media. In May 2004, he was quoted in the Sun-Sentinel as saying, "No Mutual investor has ever lost a penny." When questioned by SEC lawyers about that pronouncement, Klenet said he was simply being an "advocate" for the company.
That was news to Albert and Mayetta Scartz, 85-year-old retired schoolteachers who spend the winter season in their Tamarac home. They invested about half a million dollars in Mutual Benefits. The company is now in receivership, and the couple hopes to someday see at least a partial return on their investment. They say they were shocked to learn that the company was so crooked.
Albert Scartz says that he met with Keechl's former partner, McNerney, before investing and that the lawyer told him, "Don't worry about a thing." Company officials picked him up in a limousine, took him to lunch, and introduced him to doctors who, it turned out, were doing bogus medical reports on policyholders.
"They treated me royally, but those doctors are now in jail," Albert said. "They showed me everything. Everything was an open book. But it was all a fraud. I don't trust anybody in Florida anymore."
"Seems like if somebody wants to do something crooked," Mayetta added, "Florida is the place to do it."