main menu page title feature menus content footer
My Florida C F O

CFO's Initiatives

Stay Connected

Follow the
Department of
Financial Services

Sign up for the CFO's
weekly newsletter!

Press Release

News   RSS RSS   Press Office   Archive

Future First Financial Group President Arrested

5/2/2003

CONTACT: Nina Banister
(850) 413-2842

TALLAHASSEE—The former president of the former Ponte Vedra-based Future First Financial Group, Inc., a viatical settlement provider whose license Chief Financial Officer Tom Gallagher stripped last year for fraud, was arrested Thursday on numerous felony counts including one count of violating the state's White Collar Crime Victim Protection Act.

Randy E. Stelk, of 909 Ponte Vedra Blvd., Ponte Vedra Beach, was arrested by investigators with the Florida Department of Financial Services' Division of Insurance Fraud. He was booked into the St. Johns County Jail with bond set at $10 million. In addition to one count of aggravated white collar crime, Stelk is charged with one count of racketeering, one count of securities fraud and three counts of grand theft in excess of $100,000.

Three other principals also had charges filed against them on Thursday. They are Francis X. Keaveney II, 1007 San Rafael Road, Saint Augustine, former director and executive vice president of marketing; Alan H. Anderson, 129 Sea Island Drive, Ponte Vedra Beach, former treasurer and secretary, and executive vice president of operations; and Charles R. Sussman, C.P.A. and former trustee of The Fidelity Trust, 9572 Waterford Road, Jacksonville. Anderson and Keaveney are charged with one count each of racketeering, securities fraud, and grand theft in excess of $100,000. Their bonds are set at $1 million. Sussman is charged with one count of grand theft in excess of $100,000, and his bond is set at $10,000.

The charges are a culmination of the investigative efforts of several agencies since 1997, including the Office of Financial Institutions and Securities Regulation (OFISR), the Office of Insurance Regulation (OIR), the Division of Insurance Fraud, and the Florida Department of Law Enforcement. The charges are being prosecuted by the Office of Statewide Prosecution.

Future First Financial Group, Inc., was placed into conservatorship last August to protect about 5,000 consumers who entered into more than 8,000 individual investment contracts representing approximately $170 million invested in death benefits with the firm. Expected return was $270 million.

In a viatical settlement transaction, investors agree to enter into investment contracts to purchase a fractional interest in the future death benefits of life insurance policies. Upon the death of the insured, investors expect to receive their share of the death benefit, which exceeds their initial investment. Future First offered and sold investments in viatical settlements.

On or about May 26, 2000, Stelk, Keaveney, Anderson and Sussman, as the Trustee of the Fidelity Trust, are alleged to have conspired to fraudulently divert $12 million of investor funds obligated for the future payment of insurance premiums from the designated premium account to an account outside the control of Future First and the Trustee, for the purpose of entering into an unsecured investment through offshore financial institutions. The diversion depleted accounts needed to pay premiums. Additionally, Stelk is charged with grand theft through the conversion of more than $700,000 of death benefits due investors into an account Future First intended to use to pay premiums.

After a 1999 investigation by the department's fraud division, both Future First and its then-vice president, William Sweeney, were charged by a statewide grand jury with 81 counts of grand theft and one count of organized fraud in the marketing of policies valued at $6.9 million. Trial is still pending.

Although Gallagher revoked Future First's license in May 2002, the firm continued to conduct business as Life Settlement Services Corp. with the same president, same office location and most of the same employees. Last year, Life Settlement Services Corp. sent letters to investors, asking for six months' worth of premiums in order to keep the Future First policies in which they had invested from being cancelled for non-payment. Life Settlement Services Corp. told the investors that Future First had no money with which to pay the premiums, estimated at $350,000 per month.

Investors may contact conservator David Levine at (305) 536-1112. They may also wish to consult an attorney to decide what actions are appropriate to protect their investments.

The Department of Financial Services' Helpline at 1-800-342-2762 is available from 8 a.m. to 7 p.m. Monday through Friday.