Joel Steinger Sentenced for $1B MBC Scheme

Former head of the Mutual Benefits Corporation (MBC), Joel Steinger, has been sentenced to 20 years in federal prison for his pivotal role in a massive $1 billion investment fraud. The court also ordered Steinger to forfeit $15 million and serve three years of supervised release following his sentence by U.S. District Judge Robert N. Scola, Jr.

Steinger’s scheme, which targeted approximately 30,000 investors, was the MBC’s fraudulent marketing of viatical and life settlements. He and his conspirators, including Steven Steiner, Michael McNerney, Anthony M. Livoti, Jr., and others, managed to raise over $1.25 billion before federal regulators shut down the operation in 2004.

The court heard evidence that from 1994 to 2004, MBC purchased life insurance policies from individuals with terminal illnesses or disabilities, then sold fractional interests in these policies, misleading investors about risks and returns. Steinger’s fraudulent methods included misrepresenting policyholders’ life expectancies and the source of funds used to pay investors.

Steinger concealed his criminal history by using a figurehead company president, while new investor money was funneled into paying off earlier investors in what can be likened to a Ponzi scheme. The MBC fraud collapsed under the weight of its own deceitful practices.

Steven Steiner, another co-defendant and founding principal of MBC, received a 15-year sentence after pleading guilty to charges including money laundering. Anthony M. Livoti, Jr., was sentenced to 10 years in prison for his role in the scheme following a jury trial.