Joel Steinger and Mutual Benefits Corp. Stole a Billion Dollars by Peddling Bogus Life Insurance Policies

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With less than a month to go before Election Day in 2002, Buddy Dyer was trailing Charlie Crist in the race for Florida attorney general. Dyer, who was then a state senator and is now mayor of Orlando, needed campaign cash to become the state's top lawman. So he went to a well-known criminal for help.

Joel Steinger was a convicted felon and had been hit with fines for breaking securities laws. He was the subject of numerous civil lawsuits during his life of running scams. And at the time, the office Dyer was running for, the Attorney General's Office, was investigating Steinger for his role in Mutual Benefits Corp., the billion-dollar fraud that authorities now say is one of the largest Ponzi schemes in Florida history.

Dyer ignored all of this. He needed money. And Steinger, swimming in illicit cash taken from duped investors, didn't disappoint.

Steinger pulled out all the stops for Dyer, culminating in an October 23, 2002, fundraising soiree at the exclusive Tower Club in Fort Lauderdale. Steinger's wife organized the affair, which included some impressive guests. On the host committee was Miami attorney John M. Hogan, a former Florida statewide prosecutor. State Sen. Steve Geller, the Senate minority leader at the time, was on the list, as was state Senate candidate Dave Aronberg, a former assistant attorney general. Famed defense lawyer Roy Black was also named on invitations, along with lawyer Norman Kent, once a leader in the Fort Lauderdale gay community. In attendance was Broward County land baron Ron Bergeron, who strode about in his trademark Western wear schmoozing with the politicians and lawyers. The guest of honor scheduled to attend the event: former U.S. Attorney General Janet Reno.

When the fundraiser was over, Dyer accompanied Steinger, Kent, and others to the Coliseum, a gay nightclub in Fort Lauderdale known for its elaborate drag-queen shows. Steinger had deep ties to the gay community; his Ponzi scheme depended on it. Dyer seemed uncomfortable as he addressed the crowd in his Southern drawl; he told someone there that it was the first time he'd ever been in a gay club.

In all, Steinger raised about $20,000 for Dyer, but that was just the chump change. Steinger poured at least $1 million into the political process during the 2002 election, including more than $600,000 going to the state Democratic Party itself. The party spread that so-called soft money around to all its candidates, including Dyer (who received more than $100,000). In all, law enforcement sources estimate that Steinger put $3 million into politics from 2000 through 2004.

In return for his electoral generosity, the con man was looking for cover. He needed the state Legislature to pass laws to get regulators off his back and, for obvious reasons, the AG's office in his corner.

Dyer, though, lost to Crist. But Steinger covered his bases there too, hiring Hollywood ophthalmologist Alan Mendelsohn, a renowned Republican fundraiser who would later serve on Crist's gubernatorial transition team. Mendelsohn's job was to gain sway for Steinger with Crist and the GOP, say sources.

Steinger spent even more money on lawyers and lobbyists than he did on politicians. He specialized in hiring attorneys who had ridden the revolving door from law enforcement posts to defending accused criminals. These lawyers — including Hogan, former Chief Assistant U.S. Attorney Jon Sale, and former Florida Deputy Attorney General Peter Antonacci — use the expertise and influence they accumulated while working for law enforcement to help accused criminals like Steinger escape justice. Also on Steinger's legal team was famed lawyer Richard Ben-Veniste, a former Watergate prosecutor.

And the daunting truth is that Steinger's strategy was effective. If the story of Joel Steinger tells us anything, it is that the Florida Legislature is for sale to the highest bidder — even if it comes in the form of a convicted felon and known swindler. And the executive branch, designed to protect the citizenry from financial predators like Steinger, moves especially slowly when big-shot attorneys like Hogan, Sale, Antonacci, and Ben-Veniste are involved.

Even with all his money and powerful friends, his latest con game is so massive that it seems almost impossible he will find his way to freedom again. But the slippery Steinger has a knack for surviving so he can pull off his next scam.

Mutual Benefits was born of a scam.

Steinger got the idea for it from a girlfriend who had worked at a Fort Lauderdale company called United Benefits Group, according to Marlene Steinger, Steinger's cousin and former associate. United Benefits Group bought and sold viaticals, an industry already rife with fraud when Steinger entered it.

The business of viaticals, while maligned as morbid, actually can be both profitable and humane, at least in theory. To understand how viaticals are supposed to work, consider an AIDS patient with two years to live. The patient has a $100,000 life insurance policy and wants to enjoy at least some of that money. A broker buys the policy for, say, $25,000. The broker then sells the policy to investors for $50,000. The broker then sets aside that money to pay the premiums until the patient's death, whereupon the investor gets the $100,000 payout.

It should work well for everyone. But that's not the way it worked with United Benefits. The company fell under scrutiny from the Securities and Exchange Commission because its owner, Zane Balsam, had been barred from dealing in securities after misleading investors at another company. In 1995, the SEC shut down United Benefits Group for good when it discovered that the firm had sold more than $4 million in insurance policies that didn't exist.

The United Benefits case should have served as a cautionary tale. But for Joel Steinger, it served as inspiration.

If his past proved anything, it was that he loved a good scam. He'd earned a felony conviction in 1981 for ripping off investors and had been fined and banned from selling securities by the SEC in other cases. He sold bogus commodities and fake diet pizza, among other scams. And he had a great criminal pedigree, as he learned at the feet of the late mobster Meyer Lansky.

As the United Benefits mess showed, the viatical industry was already rife with fraud when he entered it. Steinger, though, was primed to take a "death benefits industry" scam to new heights.

Steinger opened Mutual Benefits in a two-story white-columned building on Oakland Park Boulevard in 1994. The SEC had barred him from trading securities, so Steinger wasn't listed on corporate documents. He called himself a "consultant" to the company and propped a childhood friend from New York, Peter Lombardi, into the role of president of the company. He had two prominent Fort Lauderdale attorneys, Anthony Livoti and Michael McNerney, handle the business accounts.

Federal and state court records claim Steinger made up false life expectancies and had shady doctors rubber-stamp them. In classic Ponzi-scheme style, he used money from new investors to keep up with the premiums on the old policies. At the same time, he siphoned off tens of millions of dollars for himself and his brothers, Steven and Leslie, who helped him pull off the scam. The life insurance holders were paid and Steinger and his associates and sales agents certainly made a lot of money, but the investors — most of them elderly and unsophisticated — were often stiffed after being promised returns ranging from 12 to 72 percent.

The SEC and state regulators opened an investigation into Mutual Benefits within a few months of its opening and soon found that Steinger hid his true ownership of the firm, failed to tell investors about his troubled past, and misled them about what they were buying.

One of the key questions then — and one that would be disputed in and out of court by Mutual Benefits for the next decade — was whether viatical contracts were securities that needed to be licensed and registered or simply insurance products. The answer to that question was crucial not only because Steinger wasn't allowed to deal in securities but also because if they were defined as securities, they would be subject to much more stringent regulation.

In 1998, the SEC settled its case with Steinger and his brother Leslie without answering that question. The brothers agreed to pay a fine totaling $950,000 and promised not to violate anti-fraud laws again. The fine wasn't much to Steinger; Mutual Benefits raised $100 million during its first two years of business alone.

Failing to shut down Mutual Benefits at that time would prove a disaster for investors around the country. Steinger, even then a known financial predator, was able to win this favorable result in part thanks to his well-heeled attorney, Ben-Veniste, a friend of the president at the time, Bill Clinton, who had served as general counsel for the Senate Democrats during Whitewater and would later sit on the esteemed 9/11 Commission.

Ben-Veniste told the Sun-Sentinel, which published a short article about the 1998 settlement, that the company "refunded or exchanged all investor funds when it recognized the problem," and an SEC attorney remarked that it didn't appear any investors had lost money.

That rationale is strongly reminiscent of mega-swindler Bernie Madoff's claim to the SEC when he was investigated in 1992. The SEC determined that two of Madoff's top lieutenants, Michael Bienes and Frank Avellino, who both had strong Broward ties, were selling unregistered securities. They were hit with fines, but Madoff was allowed to stay in business because it was alleged that no one had actually lost any money.

Both Madoff and Steinger financially ruined thousands of people after wrist slaps from the SEC. But Steinger couldn't have been nearly as effective a swindler as he was without access to AIDS patients who were willing to sell policies to Mutual Benefits. To get that access, Steinger simply started the largest AIDS clinic in Broward County — and that put him in charge of millions of Medicaid dollars. The fun for Steinger was only beginning.

When you're buying insurance policies from people suffering from AIDS, you need access to sick patients. That's why Steinger set out to corner the market on AIDS services in Broward County.

When it first opened for business, Mutual Benefits started a nonprofit called the Viatical Benefits Foundation that was run by Steinger's brother, Steven, a gay man who used his contacts in the gay community to further his brother's agenda. The foundation donated money to AIDS clinics and provided help to sick people, but it was all in the name of snapping up insurance policies to sell.

In 1996, Steven Steiner (who didn't use the g in his name) and other Steinger associates founded an AIDS clinic called Community Healthcare of Broward next door to the Mutual Benefits office.

And Steiner proved adept as a spokesman for the clinic, which was soon pulling in a million dollars a year in federal grants and milking Medicaid for big money. It also ran a for-profit pharmacy on the property called Commcare that dispensed AIDS medications to the clinic's patients.

The patients would be treated and then pitched on selling their life insurance policies.

To gain further credibility and reach, Steinger and his brother struck a deal with the Indiana-based Ryan White Foundation, named for the child who contracted HIV in 1984 during a blood transfusion.

With the AIDS clinics, pharmacy, and the name recognition, Mutual Benefits began giving VIP tours to potential investors, picking them up in limousines, showing them the clinic and the business, taking them to lunch, and introducing them to doctors.

"They treated me royally," says Albert Scartz, an 88-year-old Mutual Benefits investor who sank $500,000 into the company. "They showed me everything. It was an open book. But it was all a fraud."

And there were plenty of early signs that things weren't right at Mutual Benefits. The clinic, not surprisingly, was soon in turmoil and facing regulators' queries.

In 1998, the state began another investigation, this one by the Agency for Healthcare Administration, amid allegations of Medicaid fraud associated with the pharmacy. Two doctors quit the board after learning that Steinger had used their names in advertising for Mutual Benefits. And it was discovered that the clinic's director wasn't licensed in the United States.

Ryan White's mother, Jeanne, cut all ties with the brothers, telling the media in 1998, "There's nobody more greedy than the Steingers."

The state, meanwhile, would keep the Medicaid fraud investigation going for years. In 1999, the Office of Statewide Prosecution began its own investigation of Mutual Benefits as complaints about the company kept coming in. This investigation would take years — and thousands of hapless investors would be hoodwinked into putting their money into Mutual Benefits while authorities failed to take action.

The investigation was given a catchy name, "Operation Death for Dollars," and at first it centered on an unlawful practice called "clean-sheeting." That is, the holders of the policies had withheld their terminal illness — AIDS, in this case — from the insurance companies so they could get big-dollar policies, which they then offered for sale through Mutual Benefits.

The state investigation found that an estimated 20 percent of all policies Mutual Benefits was selling had been clean-sheeted and that company executives and attorneys were involved in the fraud.

It was practices like this that prompted Lt. Glen Hughes, an investigator with the Florida Department of Financial Services, to write in an email to Chief Assistant Statewide Prosecutor Lisa Porter: "Unbelievable! These guys are stealing from all sides."

It gets worse. Investigators discovered that Steinger was pulling "regular" consulting fees not only from Mutual Benefits but also more than $250,000 from Commcare Pharmacy. He had the pharmacy send the checks to one of his shell companies, the aptly named Bullmax.

In May 2001, the state got a break in its case. It learned that Steinger had hired an unlicensed doctor named James Davis to rubber-stamp bogus life expectancy statements at $200 a pop. Davis also worked at Commcare and was an early investor in the business. He told investigators that Steinger personally ordered doctors to prescribe certain drugs whether the patients needed them or not, according to state records.

One doctor who worked at the clinic and pharmacy, Ginge Brien, told investigators that he believed that too many patients were getting a certain intravenous medication called IVIg and took some of them off the treatment. "After removing the patients he stated he was taken to lunch by Joel and Steven Steiner," investigators wrote in a report. "During the lunch Brien was told by Joel that he needed to prescribe IVIg as it made them money."

Brien refused to do it and was soon fired. Brien said another doctor at the clinic, Clark Mitchell, "would do what he was told to do." Another former Steinger doctor, Joey Kenney, told investigators that several patients were secretly prescribed an AIDS drug called Serostim and that an agent with the maker of the drug, Serrano, was often on the premises. He too said he felt pressured and "intimidated" by Steinger to prescribe certain drugs.

Investigators found that Commcare had billed Medicaid an astounding $18 million for Serostim from July 1999 through January 2002. During that time, Steinger acquired another large AIDS services company, Center One. Once a respected entity, Center One would soon be consumed by scandal.

At the same time, Steinger was becoming one of the biggest drug pushers in Broward County. By 2000, Mutual Benefits was the largest viatical company in the United States.

As Mutual Benefits' empire grew, the viatical industry was being hit with a lot of bad media coverage. Company after company went down amid fraud allegations. Steinger responded to the bad publicity by having his company issue an extraordinary news release on November 10, 1999.

"All over the country there have been charges and allegations against people who have fraudulently sold non-existent life insurance policies from the terminally ill to individual investors for personal gain," the release stated. "Referred to as Ponzi schemes, they have, in some cases, caused investors to suffer staggering losses... Mutual Benefits Corp., the country's largest viatical settlement company, has a mission: they want the world to know that they are one of the 'good guys.' "

At that very time, Mutual Benefits investors were flooding state agencies with complaints. From 1999 through 2003, the state's Department of Insurance received 178 complaints from investors who represented about $20 million in ripped-off money — a tiny portion of the $830 million that the feds believe was actually lost in the Mutual Benefits scandal.

Many of the people listed on the complaints were elderly investors who had put large chunks of their retirement money into Mutual Benefits after being promised big returns. People like 77-year-old Leleen Montgomery who, along with her emphysema-stricken husband, invested $170,000 with Mutual Benefits in 1999, about half of their savings. Mutual Benefits never returned her a dime.

"It was supposed to be guaranteed," she says now. "But it wasn't."

In all, about 30,000 investors sank more than $1.7 billion into Mutual Benefits from 1994 to 2004. Most of them have lost all of their investment in the company. And the problem boiled down to the frank sentiment contained in one of the complaints made to the Florida Division of Consumer Affairs in 2002: "Consumer is upset that insured [person] has not died."

And that was due, of course, to Steinger's manipulation of life expectancies to draw in the investors.

By this time, state and federal investigators knew what was happening. Five other states, in fact, had barred Mutual Benefits from operating within their borders. Steinger's own problems had at least been mentioned in newspapers.

Yet Florida politicians claim they were oblivious to the whole mess.

When asked about his relationship with Joel Steinger, former Senate Minority Leader Steven Geller seemed to take a page right out of Mutual Benefits' news release. "I thought they were the good guys," says Geller, who was term-limited out of the Senate in 2008 and is now running for the Broward County Commission. "I thought they wore the white hats."

Geller became friendly with Steinger in 2000, which was also the year Steinger first contributed at least $1,000 to Geller's campaign. It was the beginning of a years-long steady diet of Steinger-related campaign cash for Geller. The following year, Steinger-related sources gave Geller a nice holiday gift: $5,500 contributed on Christmas Eve. Of that, $500 came from an aptly named company, Bandit Services, one of many shell companies related to Mutual Benefits, this one registered under the name of a Mutual Benefits sales agent named Howard Mandel.

In 2004, Steinger-related companies and Mutual Benefits employees poured at least another $15,000 into his campaign, which equaled nearly 20 percent of the total amount of money Geller raised for that race. Checks came from numerous Mutual Benefits employees. One source who worked for Mutual Benefits at the time says Steinger would collect $500 checks from employees and then reimburse them with cash, a blatant violation of campaign laws. It's not clear if this allegation has been investigated by authorities.

In all, Geller took more than $20,000 in campaign contributions from Mutual Benefits-related donors.

Geller's claim of ignorance regarding Steinger's character is hardly credible. Simply reading the newspaper or putting Steinger's name in an internet search would have shown Geller that he was joining forces with a crook. The state's Medicaid fraud investigation of Steinger was publicized in newspapers in 1998, as was the SEC action against Steinger and his brother Leslie for misleading investors. News reports had also recounted Steinger's 1981 felony fraud conviction. The state made its first arrest in the Mutual Benefits case the same year Geller took that $5,500. On May 23, 2001, the state charged Clark Mitchell, the doctor who allegedly did as Steinger told him, with an organized scheme to defraud and 24 counts of communications fraud. The arrest was reported in the Miami Herald.

"Normally campaigns will vet anyone who gives a lot of money," says political fundraiser and campaign manager Fred Menachem, who worked for a time for Steinger. "If a significant amount of money is coming from one area, the smart thing to do is to vet your prospect before you take the money. You don't want it coming back and biting you on the ass."

State investigative records show that all the criminal charges against Mitchell concerned the doctor's alleged rubber-stamping of Mutual Benefits' phony life expectancy claims that caused false confidence in investors that they'd be paid quick and healthy returns.

The investigators got the doctor, but they wanted Steinger. The problem was that Steinger was hiding his tracks. They knew Steinger controlled Mutual Benefits. Former Mutual Benefits staffer Howard Michael Stern told state investigators that Joel was the "brains" of the operation. Another employee called Steinger the "chairman of the board." Yet another described him as "the godfather" of the company.

On paper, though, Steinger was just a "consultant," albeit one who funneled millions out of the company. And Mitchell, whose attorneys' fees were being paid by Steinger, wasn't talking. He was holding loyal to "the godfather."

The closer the investigation got to him, the more money Steinger poured into the political process. It's seemingly impossible to tally all the Steinger-related political contributions, as they came from myriad companies and individuals.

His grand plan, according to sources, was to get enough powerful politicians, lawyers, and lobbyists on his team to help thwart the investigation and pass key legislation in Tallahassee that would protect the company from regulators.

Sen. Geller helped choose the dream team that enabled Steinger to carry it out. It was Geller who recommended that Steinger hire the senator's close friend and former legislative aide, lobbyist Russ Klenet. Because Klenet was married to then-state Rep. Stacy Ritter, Steinger viewed the hire as a two-for-one, says a source close to Mutual Benefits. Steinger boasted that Ritter was in his corner and would back legislation proposed by the viatical company, says the source.

Soon, Steinger was paying Klenet $20,000 a month for his services. In 2003, Mutual Benefits paid more than $100,000 to remodel the Parkland home owned by Klenet and Ritter, who is now mayor of Broward County. It included the purchase of a grand piano now displayed in the couple's living room.

Court records reveal that Klenet, who led Steinger's legislative agenda, became a close friend of Steinger's. He was a regular fixture at Steinger's $6 million Las Olas-area home on the New River and said in a deposition that he and his lobbying assistant, Aaron Scavron, referred to him as "uncle." He swam in Steinger's pool with his children. Ritter and Klenet even had Steinger over for a New Year's Eve party at their home.

Geller, Klenet, and Ritter were just a few of the willing pawns Steinger used in his attempt to pass legislation and win favor with the state agencies on his tail. In addition to contributions to parties and committees that totaled more than $1.5 million, sources connected to Mutual Benefits contributed tens of thousands of dollars to individual politicians, including Sen. Dave Aronberg.

Aronberg, who was running for the state Senate at the time, says he first met Steinger in 2002 through a friend, Ron Klein, who was a Democratic state senator at the time and has since been elected to Congress.

He says Klein drove him to Steinger's mansion on the New River in rather mysterious fashion, just telling him there was someone he should meet. There, Steinger's wife at the time fed them lunch. "It was a very big house, I remember that," says Aronberg, a Democrat from Greenacres. "I pretty much kept my head down and ate. It was delicious. No money changed hands or anything. It was my first time meeting Joel Steinger, and as I look back, I think, 'Wow,' especially after what I've learned about him since."

Later that year, Aronberg accepted $500 for his campaign from a company owned by a Mutual Benefits sales agent named John Trombino as well at least another $1,000 from two of Steinger's attorneys, John M. Hogan and Jeffrey Orseck. Aronberg says that he, like Geller, didn't know about Steinger's past or that he was under state investigation.

This happened despite the fact that Aronberg, a lawyer, had previously worked at the Attorney General's Office during the time the Steinger investigation took place. He says he wasn't privy to the investigation, never checked Steinger's background, and had no idea he was associating with a convicted felon.

"People don't realize that we have so little time," says Aronberg, who plans to run for attorney general in 2010. "It would be impossible to do a background check on everyone who gives a campaign contribution. And we have a thousand bills to keep up with."

Aronberg was far from alone. Some other prominent politicians who received contributions from Steinger-related sources: George W. Bush, Adam Hasner, Franklin Sands, Eleanor Sobel, Mandy Dawson, Gwen Margolis, Jeff Atwater, and many others.

It was Klenet who provided Steinger with lists of legislators to give money to, according to SEC records. But Klenet wasn't alone either; Steinger also hired plenty of reinforcements in the lobbying realm, including Antonacci, Big Tobacco rep Larry Williams, and onetime Republican Party Chairman Wil McKinley.

All of the money and hires provided Steinger much good will in Tallahassee. But he had one very strong enemy: Florida's chief financial officer, Tom Gallagher, who vowed to crack down on Mutual Benefits because of all the complaints about the company. When Steinger's legislative forces backed a bill during the 2004 session that would keep the company under the regulatory umbrella of the relatively toothless Department of Insurance, Gallagher urged legislators to vote against it.

The entire Steinger political machine mobilized behind the measure. Aronberg says that Geller openly touted it and that Klenet's assistant at the time, Scavron, lobbied him to support it.

The measure was tucked in a massive financial services bill that was passed on April 28, 2004. The amendment was written by Republican state Sen. Bill Posey of Melbourne, who has since been elected to Congress. Although Posey has no known direct ties to Steinger, he received several thousand dollars in campaign contributions from Alan Mendelsohn, the Hollywood ophthalmologist and Republican fundraiser who served as treasurer for the Florida Medical Association PAC. Posey did not respond to a call for comment.

Mendelsohn's role in Mutual Benefits' legislative effort is still mysterious. Klenet testified in a deposition that Steinger hired Mendelsohn and that the eye doctor was "very helpful" in raising campaign contributions for Mutual Benefits, especially among Republicans. Mendelsohn, who raised big money for governors Jeb Bush and Charlie Crist, recently resigned his position at the medical PAC and remains under investigation for his role in the Mutual Benefits scandal.

The bill passed with only a couple of contrary votes. According to a source close to Steinger, Klenet called his boss with the good news. A jubilant Steinger thanked Klenet and also asked that he thank his wife, Ritter. She supported the amendment, as did Geller, Bogdanoff, Aronberg, and all the other Tallahassee pols Steinger showered with money.

The passage of the amendment was a big victory for Steinger. But a major problem remained: Those plodding but pesky investigators were still on his tail.

One of Steinger's main weapons against state investigators was Antonacci, whose previous role as state deputy attorney general gave him remarkable access to the bureaucracy. A slew of powerful Steinger lawyers also kept tabs on the investigation, including Hogan and Ben-Veniste. The latter, in fact, corresponded with the Statewide Prosecutor's Office so much that investigators set aside a special Ben-Veniste folder to keep track of it.

Despite the pressure from the influential lawyers, or perhaps because of it, the state office and Steinger's people were initially not very cozy. When Dr. Mitchell was arrested in 2001, for instance, the Miami Herald reported that "Mutual Benefits has offered to cooperate in the investigation." This riled Chief Assistant Statewide Prosecutor Lisa Porter and her own assistant prosecutor, Cheryl Aleman, and they sent an angry letter to Steinger attorney John Hogan.

"How exactly was Mutual Benefits offering to cooperate in the investigation?" they wrote. "... To date, Mutual Benefits has not produced for interview in our office a single one of the Mutual Benefits employees on the list we provided in May... In fact, even when our office went to the lengths of obtaining a search warrant for needed documents, Mutual Benefits actually engaged in the unprecedented action of mounting a 'full court press' in an effort to block our warrant."

One of Steinger's strategies is to pay the lawyers' fees for all his associates who get in trouble, in effect buying their silence, and he did just that for Mitchell. But a break came in the Mitchell case in July 2002 when Mitchell called investigators, telling them he was ready to talk.

A state investigator furiously took notes as Mitchell related how Steinger shredded medical documents, rewrote charts, and instructed doctors at the AIDS clinic to "push" drugs. From the investigator's notes on July 26, 2002: "Joel made him sit down and sign charts. Today he refused and now they are suspicious of him... [Mitchell] is taking a chance. He has before-and-after charts and can prove Medicaid fraud that happened last year... They keep rubbing in his face how much they are paying the lawyer and say another $100,000 and it's all your fault. He can hand us Joel."

This was just the kind of corroborating evidence investigators wanted to cement a case against Steinger. In exchange for Mitchell's cooperation, the state charges were dropped and Mitchell was handed over to the U.S. Attorney's Office, which was conducting a grand-jury investigation of Mutual Benefits and Steinger. The feds determined that Mitchell, at Steinger's order, falsified 6,000 life expectancies while employed at Mutual Benefits and charged him with fraud.

Steinger became consumed by Porter and her boss, Statewide Prosecutor Melanie Hines. "He was obsessed with getting rid of those two women," says a source who was close to him at the time.

To really have influence at the Statewide Prosecutor's Office, Steinger needed the attorney general's ear, and he didn't have it with Bob Butterworth, the AG at the time. When election time came in 2002, he backed Dyer strongly but also hedged his bets with Mendelsohn, the Republican fundraiser with strong ties to Crist.

Crist won the race and immediately replaced Hines with Florida Division of Alcoholic Beverages and Tobacco director Peter Williams. The switch wasn't out of the ordinary, and there's no evidence that Steinger had anything to do with Crist's decision — but sources say he privately took credit for it.

And there is little doubt that Williams was warmer to Steinger's lawyers and lobbyists than Hines. In fact, he met personally with Antonacci less than two months after taking the position. Antonacci wrote Williams a letter after the February 27, 2003, almost pleading with him not to bring a case against Steinger or the company.

"The company has consistently worked with the Legislature to assist in changing and making improvements in viatical legislation to protect policy owners and investors," Antonacci wrote. "... It also is significant that Mutual has consistently given back to the community by contributing generously to charitable organizations which affect patients suffering from AIDS. We are greatly concerned that an ill-advised prosecution would serve to put Mutual out of business, which would bring great harm to numerous innocent individuals."

In August, Antonacci and Ben-Veniste met with Williams and agreed that, should charges be filed against Steinger, he would be allowed to surrender at the Broward County Jail and post a $115,000 bond. On October 29, 2003, Antonacci arranged for Joel Steinger and the statewide prosecutor to meet personally to discuss a "global resolution to the pending investigations," as Antonacci put it in a memo.

Although details of that meeting aren't known, Williams and Antonacci then began drafting a settlement agreement that precluded any criminal charges against Steinger as long as Mutual Benefits paid the cost of the state investigation and put several million dollars in an escrow account to pay premiums on old AIDS policies.

The agreement also forced the sale of Mutual Benefits Corp. to a new entity and barred Steinger from conducting "day-to-day activities of Mutual Benefits." However, it specifically allowed Steinger to remain as a "consultant."

In other words, Steinger would be free to keep playing the same con games he'd been playing.

The federal grand jury was still targeting Steinger, and the delinquent SEC — which should have shut down Steinger in 1998 — was finally getting back into the act. On May 4, 2004, just a week after Steinger's big legislative victory, the SEC shut down Mutual Benefits and cleaned out its offices.

Mutual Benefits was finally out of business, but Steinger was still a free man.

While his victims stew with anger at both the fraud and the seeming complicity of major political figures, Steinger sits in his riverfront mansion, awaiting federal trial on fraud and money-laundering charges related to the Mutual Benefits scandal.

Mutual Benefits is now being run by a federal receivership — and victims like Albert Scartz say they fear they'll never see any money back, especially after the lawyers involved in the receivership get their share.

When Leleen Montgomery, who lost half of her and her husband's life savings in the scam, was asked about the fraud last month, she still had never heard of Joel Steinger. She just wanted to know if there was any chance of her seeing her money back from the receivership.

But she says she hopes Steinger pays for his crimes. Many of his previous cohorts are already paying. Former Mutual Benefits President Peter Lombardi is serving a 20-year sentence. Clark Mitchell, the doctor who did as he was told, was sentenced to ten years. Many former employees are serving five-year sentences, including CFO Raquel Kohler; office manager Carol Traina; her husband, David Traina; manager Bari Wiggins; executive Ameer Khan; and attorney Stephen Ziegler.

Steinger's brother Leslie died of cancer last year. Joel Steinger was charged by the feds this past December, along with his other brother, Steven Steiner; and lawyers McNerney and Livoti.

There are still tens of millions of dollars still unaccounted for from Mutual Benefits, but don't expect Steinger to offer it up. He's been hit with multimillion-dollar federal fines and class-action-lawsuit judgments in the hundreds of millions. He pleads poverty, though he can still somehow afford a battalion of high-priced attorneys and upkeep on his mansion.

Those close to him say Steinger maintains his innocence and doesn't believe he'll be convicted. In fact, some believe he's still in the viatical business. His sister-in-law, Stacy Schultz, Leslie's widow, who was deeply involved in running Mutual Benefits, is now operating Life Insurance Exchange, a Fort Lauderdale company that has licenses to do business across the country. Schultz didn't respond to interview requests.

Steinger has had plenty of time to plan a comeback; he wasn't arrested until last December, and his upcoming trial has already been continued until 2011. Numerous court documents have been sealed from public view by U.S. District Judge Adalberto Jordan. Opinion seems split on whether the documents are sealed to protect the public officials or because those same public officials are soon to be indicted.

The lead attorney for Steinger in the federal case, Edward Shohat, says his client is not guilty of any of the charges. "I fully expect Joel Steinger to be vindicated in a federal court of law," says Shohat.

The prospect of Steinger's going free may seem preposterous, but he has managed several magic tricks in his past. The question remaining is whether he can, with the help of his money and well-heeled friends, pull off one more.

Go to BrowardPalmBeach.com to read last week's featured story, "Don of the Con," which details Joel Steinger's criminal past.

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