Russ Klenet and Stacy Ritter Mutually Benefited From Fraud

Scott Wyman writes this morning of a lawsuit filed against lobbyist Russ Klenet, the husband of Broward Mayor Stacy Ritter, by a former vice president of viatical company Mutual Benefits Corp.

You might remember the name of the company -- it is, after all, accused of ripping off investors of about $1 billion in a Ponzi scheme described as the largest fraud in Florida history. 

Klenet was the company's lobbyist beginning in 2003 -- and man did he jump in to help the company with both feet. The fact that the crooks running MBC gave him $20,000 a month for his efforts and another $100,000 to remodel the Parkland house he shares with Ritter didn't hurt. [ADDED: On top of that they got to dock their boat at convicted felon and MBA poobah Joel Steinger's waterfront house.] A deposition Klenet had with the Securities and Exchange Commission in 2005 outlines his compensation. I bet Stacy was so proud of her hubby for making their house beautiful.

Of course, she was a state representative at the time, charged with regulating the viatical industry of which Mutual Benefits was a part. Hopefully for her sake she recused herself from votes relating to MBC and her husband.

When the SEC shut down Mutual Benefits in 2004, Klenet didn't budge, even though it was obvious that the company was a total fraud. On May 16, 2004, he was quoted in a Sun-Sentinel story saying: "No Mutual investor has ever lost a penny."

That wasn't true and he should have known it. Here's an excerpt from his July 7, 2005 deposition with Securities and Exchange Commission about his involvement with the fraud:

Q: I'm showing you what's been marked as Plaintiff's Exhibit 6. It's a copy of the a Sun-Sentinel article written by Tom Stieghorst.

Klenet: Yes.

Q: Did you speak with him? ...  

Klenet: Absolutely. ... I'm sure I spoke to quite a number of members of the press.

Q: There's a quote attributed to you ... "No Mutual investor has ever lost a penny."

Klenet: Yes.

Q: What was the factual basis for that statement?

Klenet: [Mutual Benefits official] Dan Goldman.

Q: Dan Goldman? You didn't have any independent records?

Klenet: I'm a lobbyist. I don't go through their books and records. Remember what I said before, I advocate, I'm given a position by the company.

So there you have it. Klenet was talking out of his ass to the press to defend a corrupt company. But that's not all. When MBC was shut down by the SEC, Klenet bought a viatical company himself, one called Life Settlements International. How did he finance the purchase? Why, he got former MBC vice president Steven Steiner and Steiner's life partner, Henry Fecker, to invest in it.

Now where do you think Steiner and Fecker got their money? Maybe from the MBC Ponzi scheme? The federal government seems to think Steiner got away with some illicit money -- the U.S. Attorney's Office indicted Steiner and his brother, Joel Steinger, on fraud and money laundering charges earlier this month.

Now Steiner is suing Klenet for him to give him his fair share of the $2 million that Klenet allegedly made when he sold Life Settlements last year.

Brilliant. Klenet is so good that he ripped off one of the architects of the greatest frauds in Florida history, if the lawsuit is to be believed.

And this is the guy that Broward Mayor Stacy Ritter comes home to every night? And they wonder why Broward County is such a corrupt and disgusting place? It gets worse. Indicted  by the feds on January 5 with Steiner was lawyer Michael McNerney. As I reported here, McNerney is the former law partner of Broward Vice Mayor Ken Keechl. And guess what? Keechl worked side-by-side with McNerney to defend MBC against lawsuits alleging fraud and other violations.

This county needs an enema, folks. And a good hot shower.

You know, I wish Michael Satz would have done his job when he investigated Klenet and Ritter last year (following my reporting on the couple's conflicts of interests). Maybe now it will be left for the feds -- ala Ken Jenne -- to come and clean up this festering sore of a county.

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Journalist Bob Norman has been raking the muck of South Florida for the past 25 years. His work has led to criminal cases against corrupt politicians, the ouster of bad judges from the bench, and has garnered dozens of state, regional, and national awards.
Contact: Bob Norman