Company Pleads Not Guilty in Virginia to $670M Fraud

March 20, 2012

A Costa Rican company accused of a $670 million insurance fraud scheme has pleaded not guilty in federal court in Richmond, Va.

Defense attorney John Russell entered the plea Monday on behalf of Provident Capital Indemnity Ltd. Provident and its president and majority owner, Minor Vargas Calvo, are scheduled for trial on conspiracy, wire fraud and mail fraud charges April 23.

Provident sold bonds guaranteeing funding for life settlement companies, which buy life insurance policies from insured people at less than face value and collect the benefits when those people die. The government says Provident misled investors about its financial stability, its credit rating and whether its financial statements had been audited.

An outside auditor for the company pleaded guilty in November to conspiring to commit mail and wire fraud.

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