TRUMBULL, Conn. -- An attorney from Trumbull waived his right to be indicted and pleaded guilty Wednesday to a conspiracy charge involving insurance fraud.
David Quatrella, 61, made his plea before U.S. District Judge Alvin W. Thompson in Hartford, according to Deirdre M. Daly, U.S. Attorney for the District of Connecticut.
The charge stems from a scheme to defraud insurance companies into issuing insurance policies on the lives of elderly people for his and other investors' benefit, also known as a stranger-originated life insurance or "STOLI" scheme.
Quatrella and others, including insurance brokers based in California, New Jersey, and Florida, assisted elderly persons in applying for multi-million dollar life insurance policies, according to court documents and court statements, between 2008 and January 2016.
Quatrella and his co-conspirators offered the insureds the promise of free life insurance for two years, after which Quatrella and his co-conspirators would attempt to sell the policy and provide a share of the proceeds to the insured.
The insured was not obligated to pay anything and was commonly told that the premiums were being borrowed from a third-party source.
As part of the scheme, Quatrella and others recruited investors to finance the payment of premiums on the life insurance policies, with the understanding that the investors would earn a profit upon the sale of the policy.
Quatrella and his co-conspirators then caused to be submitted to various life insurance providers applications containing false and misleading information, and which failed to disclose the third-party premium funding arrangements for the policies.
They received large commissions from the providers as a result of the issuance of insurance policies on the lives of the insureds, and Quatrella personally profited $272,000 as a result of the scheme.
Quatrella and the others attempted to sell the life insurance policies to life settlement investment funds or brokers but, in certain cases, they could not find a buyer and the policies lapsed.
Quatrella pleaded guilty to one count of conspiracy to commit wire fraud.
Sentencing is scheduled for April 28. He faces a maximum prison sentence of five years.
Quatrella also has agreed to forfeit $272,000.