Michael Horowitz responds. Jonah Lowenfeld writes this morning:
Richard Horowitz settled with the SEC for more than $365,000; Firestone settled for more than $180,000. Neither Richard Horowitz nor Firestone responded to emails or to a message left at their firm’s office.
The SEC also settled with Harold Ten, who is the president of Bikur Cholim, a Los Angeles-based nonprofit that, according to its Web site, provides services to seriously ill Jews and their families. According to the SEC, Ten, an Orthodox rabbi who also goes by the name Hershy or Heshy, established a new charity, Raphael Health, which he presented as providing services to terminally ill patients.
In fact, the charity, according the SEC, merely served to identify terminally ill patients to be named as the annuitants on the fraudulent policies, and received compensation from Horowitz for doing so. Ten deceived both hospice care providers and a number of patients in their care in order to obtain private medical information that allowed him to ascertain that the patients were, in fact, dying. In November 2007, Ten himself purchased an annuity on the life of one unnamed woman, who was dying of stomach cancer. Ten invested $1 million, and when she died, less than one month later, Ten realized a profit of $50,000.
Ten agreed to pay the SEC more than $290,000. He did not respond to an email or to a phone message left at the office of Bikur Cholim.
While the scheme, which according to the SEC lasted for at least two years during 2007 and 2008, generated hundreds of thousands of dollars in commissions and profits for investors and the brokers involved, the terminally ill individuals who were named as the annuitants on the policies received next to no compensation at all – between $250 and $500 apiece, according to the SEC’s order against Ten.
“This was a calculated fraud exploiting terminally ill patients,” said Julie M. Riewe, co-chief of the SEC Enforcement Division’s Asset Management Unit in a statement. “Michael Horowitz and others stole their most private information for personal monetary gain.”
