Viatical fraud story leads to Elvis’ house
By GREG MARTIN
“Nobody ever lost money; it’s safe.”
Those words, uttered by Venice-area financial planner Herman “Skip” Jaehne, led retirees Ron Gillis of North Port and John Romanus of Port Charlotte to invest many thousands of dollars in “viatical settlements.”
No one could lose on the investments, Jaehne argued, because a viatical settlement is an investment in which an investor buys shares in the life insurance policies of terminally ill patients at a discount which comes off the face value of the policies.
Once the patients die, as everyone does eventually, the insurance company pays off the investor.
When their investments failed to pay off within a year or two as promised, Gillis and Romanus mounted separate crusades to bring down the billion-dollar corporation that provided their viatical investments, Mutual Benefits Corp. of Fort Lauderdale, and the financial planner who sold them the investments.
Their crusade would eventually take them from the halls of a Fort Lauderdale office building that Gillis described as “shabby,” to Elvis Presley’s deluxe house in Palm Springs, Calif., which Jaehne had purchased for $1.25 million — the amount of money he made selling the viatical investments.
“It didn’t surprise me,” said Romanus, of Jaehne’s connection to Elvis’s house. “I know from past experience, (Jaehne) always wants to do unusual business practices that most good financial planners wouldn’t touch.”
A ‘risk-free’ investment
Viatical investments were established in 1989 and came into vogue in the late 1990s. At that time, interest rates were falling, and viaticals were seen by many as an alternative to other interest-bearing investments.
The term “viatical” comes from a Latin word for giving a traveler or a soldier money before they set out on a long journey.
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Source: Life Settlement Pro
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