$100 Million Fraudster gets 60 Years

Back in June, we brought you the story of Adley Abdulwahab, a 36-year-old on trial for an insurance fraud scam that involved 100 million dollars, and over 800 victims in over 30 U.S. states, plus Canada.

Well, according to the Insurance Journal, Abdulwahab has finally gotten his comeuppance.  A federal judge in Virginia sentenced him to 60 years in prison after hearing tearful testimony from several people who had their life savings stolen.

Also in June, a Richmond jury convicted him of 15 counts of conspiracy, wire fraud, securities fraud and money laundering.

Abdulwahab was one of the principals of a company called A&O that used investor funds to buy life insurance policies from individuals at less than face value. Those investors were told that A&O was a huge international company that had hundreds of employees in offices in several cities, decades of experience in the insurance and investment businesses, and had successfully turned $579 million into $1.2 billion over five years. Those were obviously not true statements.

Then later, once the insured had passed away, the investors were supposed to get paid. Instead, A&O’s partners spent that money on extravagant lifestyles rather than safeguard the investments and pay the premiums. So, eventually, the policies lapsed, and the investors lost their money.

‘They were people who built their dreams by hard work — real hard work — and those dreams have been stripped from every one of these investors,’ U.S. District Judge Robert E. Payne said.

Before sentencing, when he was given a chance to address the court, Abdulwahab said the value of the insurance policies was incorrectly calculated, he stated that the prosecutors declined to meet with him during the investigation, and he blamed a co-defendant for encouraging him to join A&O.

Among the many victims was Paula Higdon Whitaker of Texas. Her life savings of $1 million helped pay for mansions, fancy cars, expensive jewelry, resort vacations and other luxuries for A&O’s leaders. Whitaker, a teacher and counselor, says she earned that money by working as many as three full-time jobs at a time over a 40-year period of frugal living to build a nest egg to help her only son who had medical problems

She stated, “I earned money the old-fashioned way — I worked for it, that’s why this is such a horrendous and difficult thing for me.”

After her son Ryan died, she was going to use the A&O investment money to fund a charitable foundation in his memory.

Then she learned that A&O was a scam, and all her money was gone.

Whitaker said, “It’s been four years, seven months and 28 days since I lost my son and I cry every day because I can’t leave the legacy for him that I wanted. It was like taking Ryan away from me again.”

Many of the other victims talked about the embarrassment of losing their life savings to a fraud or the anguish they feel when they see that their lifelong goal of a comfortable retirement has vanished.

U.S. Attorney Neil MacBride attended the sentencing, and he agrees that 60 years was a fair sentence.

‘A case like this really puts a human face on financial crimes,’ he said. ‘These defendants stole life savings and retirement funds from hundreds of people who worked hard and played by the rules.’

He noted that some of the investors may have worked their entire lives to save $50,000, while A&O’s officers would often spend that much in credit card purchases in a month.

Abdulwahab was sentenced a day after Payne also sentenced A&O co-founder Christian Allmendinger of Houston. He received 45 years for his role in the scam.

Five other conspirators, including A&O co-founder Brent Oncale of Houston, have previously pled guilty and received lighter sentences.