WASHINGTON – Minor Vargas Calvo, 61, the president and majority owner of Provident Capital Indemnity (PCI) Ltd., was sentenced to 60 years in prison for carrying out a half-billion-dollar fraud scheme that affected more than 3,500 victims worldwide.
On April 30, 2012, Vargas Calvo was convicted of one count of conspiracy to commit mail and wire fraud, three counts of mail fraud, three counts of wire fraud and three counts of money laundering.
“Mr. Vargas masterminded a criminal reinsurance company that fraudulently claimed to guarantee almost half a billion dollars of life settlement investments sold to thousands of investors worldwide,” said U.S. Attorney Neil H. MacBride.
“Many of these investors lost their life savings because of the worthless guarantees PCI made. Mr. Vargas mistakenly believed that he could avoid punishment for the countless lives he destroyed because he operated his scheme from a non-extradition country. But, this prosecution demonstrates our resolve and ability to pursue justice on behalf of U.S. victims regardless of where the fraudsters may be hiding,” added MacBride.
According to court records and evidence at trial, PCI sold financial guarantee bonds to companies selling life settlements, or securities backed by life settlements, to investors. These bonds were marketed to PCI’s clients as a way to alleviate the risk of insured beneficiaries living beyond their life expectancy.
Vargas Calvo and his accomplice, Jorge Castillo, 57, of New Jersey, used lies and omissions to mislead PCI’s clients and investors regarding PCI’s ability to pay claims when due on the financial guarantee bonds that PCI issued.
From 2004 through 2010, PCI sold at least $485 million of bonds to life settlement investment companies located in various countries, including the United States, the Netherlands, Germany, Canada and elsewhere.
U.S. Attorney MacBride warned that this prosecution demonstrates the resolve and ability of the Justice Department to pursue justice on behalf of U.S. victims regardless of where the fraudsters may be hiding.
Assistant Attorney General Lanny A. Breuer added, “Mr. Vargas’s reinsurance company was a house of cards, built on a foundation of deception and lies. He reaped millions in profit from his scheme to sell nearly $500 million worth of guarantee bonds to more than 3,500 victims, and then spent his spoils on his soccer team and himself.”
The sentencing reflects the determination of the agents and prosecutors to bring sham artists like Vargas Calvo to justice.
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