Transamerica Life Insurance Company v. Caramadre et al

Filing 1

COMPLAINT against all defendants ( Filing fee $ 350.00; Receipt number 14670001993), filed by Transamerica Life Insurance Company. (Attachments: #1 Civil Cover Sheet, #2 Exhibit A: Program Specifics, #3 Exhibit C: Affidavit of Patrick Garvey, #4 Exhibit D: Annuity Application, #5 Exhibit F: Rescission Letter) -- NOTE: Exhibits B and E docketed separately. (Duhamel, John)

Transamerica Life Insurance Company v. Caramadre et al

Doc. 1

UNITED STATES DISTRICT COURT D I S T R I C T O F R H O D E ISLAND

TRANS AMERICA LIFE INSURANCE COMPANY Plaintiff,
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C.A.No.

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JOSEPH CARAMADRE, RA YMOUR RADHAKRISHNAN, ESTATE P L A N N I N G RESOURCES, INC., ESTELLA RODRIGEUS, EDWARD MAGGIACOMO, JR., LIFEMARK SECURITIES CORP. and PATRICK G A R V E Y , Defendants.

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CA09- 4 71 H'-COMPLAINT and JURY DEMAND

COMPLAINT

Plaintiff, Transamerica Life Insurance Company ("Transamerica") for its Complaint against d e f e n d a n t s , alleges:
PARTIES

1.

Transamerica Life Insurance Company ("Trans america") is an Iowa company with its principal place o f business i n Cedar Rapids, Iowa.

2.

Defendant Joseph Caramadre ("Caramadre") is, o n information and belief, a Rhode Island citizen and resident.

3.

Defendant Raymour Radhakrishnan ("Radhakrishnan") is, on information and belief, a Rhode Island citizen and resident.

4.

Defendant Estate Planning Resources, Inc. ("Estate Planning Resources") is, on information and belief, a Rhode Island corporation with its principal place o f business i n Cranston, Rhode Island.

5.

Defendant Estella Rodrigues ("Rodrigues") is, o n information and belief, a Rhode Island c i t i z e n a n d resident.

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6.

Defendant Edward Maggiacomo, Jr. ("Maggiacomo") is a Rhode Island citizen and resident.

7.

Defendant Lifemark Securities Corp. ("Lifemark") is a New York company with its principal place o f business in New York.

8.

Defendant Patrick Garvey ("Garvey"), o n information and belief, is a Nevada citizen and resident.
JURISDICTION AND VENUE

9.

This Court has jurisdiction over this matter pursuant to 28 U . S . c . § 1332 because plaintiff and defendants are o f completely diverse citizenship and the amount in controversy exceeds Seventy-Five Thousand Dollars ($75,000.00).

10.

All defendants have sufficient minimum contacts with Rhode Island such that this Court has general or specific personal jurisdiction over them.

II.

Venue is proper in this Court under 28 U . S . c . § 1391 (a) because one or more o f the Defendants reside in this judicial district and/or a substantial part o f the events o r omissions giving rise to these claims occurred i n this judicial district.
BACKGROUND

12.

Caramadre is an attorney licensed to practice law in Rhode Island and a self-proclaimed expert in annuities and life insurance products. Caramadre does business through his individual law practice and through his various corporate entities, including Estate P l a n n i n g Resources.

13.

A t all relevant times, Caramadre was a n agent, officer o r employee o f Estate Planning Resources and was acting within the scope o f his employment o r agency relationship.

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14.

Caramadre h a s d e v o t e d a p o r t i o n o f h i s l a w p r a c t i c e a n d b u s i n e s s t o i d e n t i f y i n g p e r c e i v e d "loopholes" in insurance and investment products that, in his opinion, allow individuals to make money or reduce investment risks based, in part, on the shortened life expectancy o f tenninally ill people. Caramadre and Estate Planning Resources make money by advising c l i e n t s to p u r c h a s e i n s u r a n c e o r i n v e s t m e n t p r o d u c t s t h a t h a v e , w h a t C a r a m a d r e perceives to be, financially beneficial "loopholes."

15.

One investment scheme that Caramadre has orchestrated and/or participated in involves the purchase o f variable annuities. Rather than recommending the purchase o f variable annuities for their intended and appropriate use as long-tenn retirement investment vehicles, Caramadre and/or his associates induce investors to apply for annuities using tenninally i l l annuitants with whom they have had no prior relationship.

16.

Caramadre's scheme works as follows: Caramadre or his colleagues identify an individual with a tenninal illness and, in some cases, offer him o r h e r cash to sign a n application for a variable annuity, naming a n unknown investor as beneficiary and designating the tenninaUy ill individual as the annuitant. The investor/beneficiary, who frequently has a personal o r professional connection with Caramadre, opts for a death benefit feature in the annuity and purportedly pays the annuity premium. A t a minimum, the death benefit provides a guaranteed return o f premiums paid.

17.

Such transactions are referred to as Stranger Initiated Annuity Transactions, or "STAT." Stranger investors may be lured to S T A T ' s for reasons ranging from the opportunity to r e c e i v e e n h a n c e d d e a t h b e n e f i t s to m o n e y laundering.

18.

Another attraction to S T A T ' s is the opportunity to engage in risk-free, short-tenn investments based on the short life expectancy o f the tenninally ill annuitant. When the

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annuitant dies - frequently within days or months o f the purchase o f the annuity - the beneficiary is able to capture market gains while the annuitant was living. A t the same time, the investor is insulated from the risk o f loss because o f the guaranteed return o f premiUm. 19. In order to locate and entice terminally i l l individuals to participate in his investment schemes, Caramadre has created and advertised a "Program for the Terminally Ill." C a r a m a d r e c i r c u l a t e d a flyer a d v e r t i s i n g t h e p r o g r a m t o H o s p i c e p a t i e n t s a n d c h u r c h e s .
See Exhibit A. Caramadre also has placed advertisements in various newspapers, offering

to pay $2,000 to terminally i l l individuals who are willing to participate in various investment schemes that allow him or other individuals (with no relationship to the terminally ill person), to earn a profit based o n the short life expectancy o f the terminally

i l l person.
20. T r a n s a m e r i c a o f f e r s a r a n g e o f financial p r o d u c t s for s a l e t o t h e p u b l i c . T h e s e p r o d u c t s are sold nationally by a network o f independent Broker/Dealers, including Lifemark. Maggiacomo is a n agent or employee o f Lifemark, selling insurance and investment products to individuals in Rhode Island. 21. One o f the products offered by Transamerica is a flexible premium variable annuity referred to as the "Transamerica Landmark." ("Landmark Annuity"). The Landmark Annuity prospectus, Exhibit B, explains that variable annuities are long-term financial v e h i c l e s d e s i g n e d for r e t i r e m e n t purposes. T h e m a i n f e a t u r e s o f t h e L a n d m a r k A n n u i t y are t a x d e f e r r e d t r e a t m e n t o f e a r n i n g s , g u a r a n t e e d d e a t h b e n e f i t o p t i o n s , g u a r a n t e e d l i f e t i m e p a y o u t o p t i o n s a n d m u l t i p l e i n v e s t m e n t o p t i o n s . B e c a u s e t h e a n n u i t i e s are " v a r i a b l e , " t h e o w n e r o f t h e a n n u i t y i s a b l e t o p a r t i c i p a t e i n t h e b o n d and e q u i t y m a r k e t

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and realize a return o r loss based o n m a r k e t performance. The Landmark Annuity also p r o v i d e s a s t a n d a r d d e a t h benefit t h a t p a y s t h e a n n u i t y b e n e f i c i a r i e s the t o t a l o f a l l premiums paid, less any adjusted partial withdrawals. For an additional fee, the Landmark Annuity offers a "Double Enhanced" death benefit, an "Annual Step-Up" death benefit and a "Taxpayer Rider," which will provide additional compensation to the beneficiaries upon the death o f the annuitant. 22. Caramadre claims to have identified " l o o p h o l e s " in the terms o f Transamerica's Landmark Annuity and application process that would provide him with the opportunity to purchase, o r arrange for the purchase of, S T A T ' s from Transamerica. 23. C a r a m a d r e t y p i c a l l y o r c h e s t r a t e s a r e l a t i v e l y l o w i n i t i a l p r e m i u m w i t h the a n n u i t y a p p l i c a t i o n , i n v e s t e d c o n s e r v a t i v e l y , s o as n o t t o g e n e r a t e q u e s t i o n s o r s u s p i c i o n s b y t h e i s s u i n g i n s u r e r . Later, a f t e r t h e c o n t r a c t i s i s s u e d , C a r a m a d r e w o u l d o r c h e s t r a t e t h e p a y m e n t o f a s u b s t a n t i a l l y h i g h e r p r e m i u m a n d t r a n s f e r funds i n t o h i g h e r - y i e l d i n g , a n d riskier, i n v e s t m e n t s .
24.

Garvey is Exhibit C.

S e e A f f i d a v i t o f G a r v e y a t t a c h e d as

25.

T h r o u g h h i s c h u r c h , G a r v e y w a s g i v e n a f l y e r a d v e r t i s i n g fmancial a s s i s t a n c e t o _ and urging them to contact Estate Planning Resources through

R a d h a k r i s h n a n . I n r e s p o n s e t o t h e flier, G a r v e y c o n t a c t e d R a d h a k r i s h n a n a n d i n f o r m e d h i m o f hi . B e c a u s e o f his Radhakrishnan

i d e n t i f i e d G a r v e y as a p o t e n t i a l a n n u i t a n t u n d e r C a r a m a d r e ' s S T A T i n v e s t m e n t s c h e m e . 26. A t all relevant t i m e s , Radhakrishnan w a s a n a g e n t o r e m p l o y e e o f E s t a t e P l a n n i n g R e s o u r c e s a n d a c t i n g w i t h i n t h e scope o f h i s a g e n c y o r e m p l o y m e n t r e l a t i o n s h i p .

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27.

Radhakrishnan convinced Garvey to sign a n application for a Landmark Annuity by paying him a total o f $ 5 , 0 0 0 . Radhakrishnan did not explain to Garvey that he would be entering into an annuity contract, how the Landmark Annuity worked, or what Garvey's involvement in the annuity would be.

28.

B e c a u s e n e i t h e r C a r a m a d r e , R a d h a k r i s h n a n n o r E s t a t e P l a n n i n g R e s o u r c e s were authorized to sell Transamerica's annuities, it was arranged that Maggiacomo, as an agent o f Lifemark, would sign and submit the application to Transamerica for consideration.

29.

In o r about March 2008, Tninsamerica received a n application to purchase a Landmark Annuity, signed by Garvey. See Exhibit D.

30. 31.

The application was submitted by o r thorough Maggiacomo and/or Lifemark. The application listed Rodrigues as the owner and beneficiary and requested a guaranteed "Double Enhanced Death Benefit," plus a Rider providing an "Additional Death Distribution" to cover tax liability associated with the payment o f the death benefit.

32.

Garvey had no relationship with Rodrigues at the time the application was signed and submitted.

33. 34.

The application was accompanied b y a $290,000 initial premium payment. Maggiacomo signed the application as "Registered Representative/Licensed Agent" with the firm o f Lifemark. A t all times relevant hereto, Maggiacomo was a n agent o r e m p l o y e e o f L i f e m a r k a n d w a s a c t i n g w i t h i n t h e s c o p e o f his e m p l o y m e n t o r a g e n c y relationship.

35.

Garvey did not know, a n d had never m e t Maggiacomo as o f the time the application was s i g n e d o r submitted.

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36.

Garvey had never had any dealings with Lifemark or any o f its agents or employees as o f the time the application was signed or submitted.

37.

In reliance o n the representations contained in the application, Transamerica issued Annuity Policy Number 07-1 00519LK8 ("Annuity"), with a policy date o f March 27, 2008, attached hereto as Exhibit E.

38.

In connection with the sale o f t h e Annuity, Transamerica paid a $21,750.00 commission to Maggiacomo and/or Lifemark.

39.

Within the months following the issuance o f t h e Annuity, Transamerica learned that Garvey: i.) had no knowledge that he would be a party to an annuity contract o r how the Annuity worked; ii.) received money to sign the application; iii.) had never met Rodrigues or Maggiacomo; and iv.) wa

40.

Transamerica, by letter o f September 2 4 , 2 0 0 9 , notified Garvey and Rodrigues that it was exercising its right to rescind the Annuity contract because it had been procured by fraud or misrepresentation and was otherwise void because Rodrigues lacked an insurable interest in Garvey. A true and correct copy o f the rescission notice sent to Garvey and Rodrigues is attached hereto as Exhibit F.

COUNT I - R E S C I S S I O N
41. Transamerica restates and realleges all preceding paragraphs as i f set forth at length herein. 42. The application misrepresented that Garvey signed the application for the Annuity with knowledge and understanding o f the transaction. Such misrepresentation was material to Transamerica's decision to issue the Annuity under the terms it did and it would not have issued the annuity i f it k n e w that Garvey did not knowingly apply for the Annuity.

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43.

The application failed to disclose that Garvey w~t the time o f the application. Omissions concerning G a r v e y ' s known health condition and life expectancy were material to Transamerica's decision to issue the Annuity under the terms it did and

44.

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it would not have issued the Annuity i f it knew o f Garvey's known

The application failed to disclose that Garvey h a d no relationship with the owner and

beneficiary o f the Annuity, Rodrigues. Omissions concerning the known lack o f any relationship between Garvey and Rodrigues were material to Transamerica's decision to issue the Annuity under the terms it did and it would not have issued the Annuity i f it k n e w o f t h e l a c k o f s u c h relationship. 45. Maggiacomo represented on the application that he was the agent who sold the Annuity. This representation was false. Neither Maggiacomo nor anyone else from Lifemark had any substantive involvement in selling the Annuity. The representation by Maggiacomo

in the application was material to Transamerica's decision to issue the Annuity under the
terms it did and it would not have issued the Annuity i f it knew that Maggiacomo' s representation was false. 46. The application did not disclose that Garvey was paid to sign the application, in violation o f R.I. Gen. Laws § 21-4-6. The concealment o f this payment to Garvey was material to Transamerica's decision to issue the annuity under the terms it did and it would not have issued the annuity i f it knew o f the payment to Garvey. 47. The m a t e r i a l m i s r e p r e s e n t a t i o n s a n d o m i s s i o n s d e s c r i b e d h e r e i n a c t u a l l y c o n t r i b u t e d t o the contingency o r event upon which the death benefits under the Annuity are to become d u e and p a y a b l e .

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48.

Because Rodrigues is the beneficiary o f t h e Annuity, which contains a death benefit, Rodrigues is required to have a n insurable interest in Garvey.

49.

Rodrigues lacked any insurable interest in Garvey and, therefore, the Annuity was void ab initio or is voidable at the will o f Transamerica.

50.

As a result o f the material misrepresentations and omissions in the application for the Annuity, as well as Rodrigues' lack o f an insurable interest in Garvey, Transamerica is entitled to rescind the Annuity. C O U N T 11,- D E C L A R A T O R Y J U D G M E N T

51.

Transamerica restates and realleges all preceding paragraphs as i f set forth at length herein.

52. 53.

A n actual c o n t r o v e r s y c o n c e r n i n g t h e v a l i d i t y o f t h e A n n u i t y c u r r e n t l y e x i s t s .

A s a r e s u l t o f t h e m a t e r i a l m i s r e p r e s e n t a t i o n s d e s c r i b e d herein, a n d R o d r i g u e s ' l a c k o f a n insurable interest in Garvey, the Annuity was void ab initio or has properly been voided and rescinded by Transamerica.

C O U N T III - F R A U D (CARAMADRE, R A D H A K R I S H N A N , E S T A T E P L A N N I N G RESOURCES, M A G G I A C O M O a n d LIFEMARK) 54. Transamerica restates and realleges all preceding paragraphs as i f set forth at length herein. 55. C a r a m a d r e , R a d h a k r i s h n a n , E s t a t e P l a n n i n g R e s o u r c e s , M a g g i a c o m o and L i f e m a r k a c t e d in concert to submit the application containing intentionally omitted and misleading information concerning G a r v e y ' s knowledge o f the application, his health condition, his life expectancy, the payment to Garvey, a n d the absence o f a relationship between G a r v e y a n d Rodrigues, M a g g i a c o m o a n d L i f e m a r k .

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56.

At the time the application was submitted, Caramaclre, Radhakrishnan, Estate Planning Resources, Maggiacomo and Lifemark knew the representations and omissions were false or misleading.

57.

Caramaclre, Radhakrishnan, Estate Planning Resources, Maggiacomo and Lifemark submitted, or arranged for the submission of, the false or misleading application with the intention that Transamerica would rely o n the infonnation, or lack thereof, contained i n t h e application.

58.

Transamerica relied and acted on the false or misleading representations and omissions and issued the Annuity w h e n it otherwise would not have i f there had been full disclosure to Transamerica.

59.

T r a n s a m e r i c a has b e e n h a r m e d b y t h e f r a u d u l e n t a c t s o f C a r a m a d r e , R a d h a k r i s h n a n , Estate Planning Resources, Maggiacomo and Lifemark by, among other things, issuing t h e Annuity, p a y i n g c o m m i s s i o n s o n t h e f r a u d u l e n t l y o b t a i n e d A n n u i t y a n d i n c u r r i n g market losses caused by the fraudulently obtained Annuity.

COUNT I V - BREACH O F CONTRACT
(LIFEMARK)

60.

Transamerica restates and realleges all preceding paragraphs as i f set forth at length herein.

61.

F i r s t P r o v i d i a n Life a n d H e a l t h I n s u r a n c e C o m p a n y ( " F i r s t P r o v i d i a n " ) e n t e r e d a G e n e r a l Agent Agreement with Lifemark in October 1997 ("1997 Agreement"). First Providian was merged into Transamerica in 1998 and, thus, the 1997 Agreement governs the r e l a t i o n s h i p , r i g h t s , a n d r e s p o n s i b i l i t i e s o f T r a n s a m e r i c a a n d L i f e m a r k and a u t h o r i z e d Lifemark to sell insurance and annuity products for Transamerica.

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62.

Pursuant to Part 2 o f the 1997 Agreement, Lifemark was obligated to "(a) use and supervise" its agents selling Transamerica's products. Lifemark has breached the 1997 A g r e e m e n t b y f a i l i n g t o t r a i n , use o r s u p e r v i s e M a g g i a c o m o c o n s i s t e n t l y w i t h t h e obligations set forth in Parts 2(a) o f the 1997 Agreement.

63.

Pursuant to Part 2 o f the 1997 Agreement, Lifemark was obligated to, among other things, " ( t ) make a determination with respect to e a c h purchaser o f a PLAN that such purchaser's investment in the PLAN is suitable as to such purchaser based upon a thorough review o f t h e current financial situation and needs o f the purchaser. . . and notify [Transamerica] promptly upon its learning any circumstances that render such suitability information inaccurate; and (g) adopt, abide by and enforce the principles set forth in the Ethics Code . . . . " The Ethics Code provides, among other things, that the sale o f insurance products should be conducted "according to the high standards o f honesty and fairness . . . . " The Ethics Code further provides that Transamerica's p r o d u c t s s h o u l d b e s o l d only a f t e r r e a s o n a b l e e f f o r t s h a v e b e e n m a d e " t o d e t e r m i n e t h e insurable needs o r financial objectives o f its customers . . . . "; that Lifemark' s agents will " m a i n t a i n c o m p l i a n c e w i t h a p p l i c a b l e l a w s a n d r e g u l a t i o n s " ; and t h a t L i f e m a r k w i l l "maintain a system o f supervision that is reasonably designed to achieve compliance with this Ethics Code." Lifemark has breached the 1997 Agreement by failing to honor the obligations o f Part 2 o f the 1997 Agreement and the Ethics Code.

64.

Pursuant to Part 3 o f the 1997 Agreement, Lifemark was prohibited from, among other t h i n g s , " ( e ) u s [ i n g ] o r s u p p l y [ i n g ] t o a t h i r d p a r t y f o r u s e , a n y o f [ T r a n s a m e r i c a ' s ] forms other than for purposes o f this Agreement. . . ; (g) pay[ing] or allow[ing] to be paid any inducement not specified in the contract for the PLANS; (h) cause any premium o r

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consideration to be rebated, in any manner whatsoever, directly or indirectly . . . ; (1) enter into any contracts with sub-agents for the solicitation o f PLANS or to share commissions with anyone not licensed and under contract with [Transamerica]; (m) engage i n speculation o f human life in any way . . . ." Lifemark breached the 1997 Agreement by engaging in acts prohibited in Part 3 o f the 1997 Agreement by, among other things, arranging for Radhakrishnan to solicit and sell the Annuity and providing h i m with application forms to accomplish such activities; permitting Garvey to be paid to sign the application; and arranging for the issuance o f the Annuity in the absence o f a n insurable interest in Garvey. 65. Pursuant to Part 4 o f the 1997 Agreement, Lifemark represented and warranted that its e m p l o y e e s a n d a g e n t s " w i l l h a v e s o u n d b u s i n e s s r e p u t a t i o n s a n d b a c k g r o u n d s . . . ; and will comply with all other applicable laws federal and state and regulations." Lifemark breached the 1997 Agreement by failing to honor the representations and warranties set forth i n Part 4 o f the 1997 Agreement concerning its employees and agents. 66. Had Lifemark complied with its contractual obligations, Transamerica would not have i s s u e d t h e A n n u i t y , w o u l d n o t have p a i d c o m m i s s i o n s t h e r e o n a n d w o u l d n o t h a v e incurred market loss and attorney's fees. Transamerica has incurred financial loss, claims, damages and liabilities as a result o f Lifemark's breaches o f the 1997 Agreement.

COUNTV-DECLARATORYJUDGMENT
(LIFEMARK)

67.

Transamerica restates and realleges all preceding paragraphs as i f set forth at length herein.

68.

Pursuant to Part 7 o f the 1997 Agreement, Lifemark is obligated to "indemnify and hold harmless" Transamerica " w i t h respect to any and all losses, damages, claims o r expenses

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(including reasonable attorneys' fees) which any o f the foregoing m a y incur arising from o r in connection with I N D E M N I F I E R ' S performance, non-performance and/or breach o f any warranty, representation o r other provision o f this Agreement o r any unlawful acts o r practices by I N D E M N I F I E R i n v o l v i n g t h e P L A N S . " 69. Transamerica has suffered and will suffer financial loss, damages, claims, and expenses, including but not limited to legal fees, commission payments, annuity payments and death benefits, a s a r e s u l t o f L i f e m a r k ' s " p e r f o r m a n c e , n o n - p e r f o r m a n c e a n d / o r b r e a c h o f any warranty, representation o r other provision o f ' the 1997 A g r e e m e n t and, thus, Transamerica is entitled to be indemnified b y Lifemark pursuant to Part 7 o f the 1997 Agreement for such losses. C O U N T V I - B R E A C H O F D U T Y O F G O O D F A I T H AND F A I R D E A L I N G S (LIFEMARK) 70. T r a n s a m e r i c a r e s t a t e s a n d r e a l l e g e s all p r e c e d i n g p a r a g r a p h s a s i f s e t f o r t h a t l e n g t h herein. 71. 72. The 1997 Agreement incorporates a n implied duty o f good faith and fair dealings. Lifemark, by the acts o f its agent, Maggiacomo, breached its duty o f good faith and fair dealing owed to Transamerica by engaging in conduct designed o r intended to obtain the Annuity w i t h o u t t h e i n f o r m e d c o n s e n t o f Garvey, w i t h o u t d i s c l o s i n g h i s k n o w n h e a l t h c o n d i t i o n a n d life e x p e c t a n c y , w i t h o u t d i s c l o s i n g R o d r i g u e s ' l a c k o f a n i n s u r a b l e i n t e r e s t i n Garvey, w i t h o u t d i s c l o s i n g t h a t R a d h a k r i s h n a n a c t u a l l y b r o k e r e d t h e p u r c h a s e o f t h e annuity and without disclosing that Garvey was paid to sign the application.

73.

T r a n s a m e r i c a h a s b e e n f i n a n c i a l l y h a n n e d as a r e s u l t o f L i f e m a r k ' s b r e a c h .

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COUNT VII - CIVIL LIABILITY F O R C R I M E S AND OFFENSES (CARAMADRE, RADHAKRISHNAN, E S T A T E P L A N N I N G RESOURCES, MAGGIACOMO a n d LIFEMARK)

74.

Transamerica restates and realleges all preceding paragraphs as i f set forth at length herein.

75.

C a r a m a d r e , R a d h a k r i s h n a n , Estate P l a n n i n g R e s o u r c e s , M a g g i a c o m o a n d L i f e m a r k p r e p a r e d , a s s i s t e d , a b e t t e d o r s o l i c i t e d t h e p r e p a r a t i o n a n d s u b m i s s i o n o f the a p p l i c a t i o n for the Annuity to Transamerica. In doing so, Caramadre, Radhakrishnan, Estate Planning R e s o u r c e s , M a g g i a c o m o and L i f e m a r k a c t e d w i t h t h e i n t e n t t o deceive a n d w i t h knowledge that information or omissions o n the application were false o r misleading and w e r e material t o T r a n s a m e r i c a .

76.

The Annuity is a n insurance policy within the contemplation o f R.I. Gen. Laws § 11-4129.

77. 78.

Transamerica is a n '"insurer" within the meaning o f § 11-41-29(a)(l). The conduct o f Caramadre, Radhakrishnan, Estate Planning Resources, Maggiacomo and L i f e m a r k c o n s t i t u t e s c r i m i n a l i n s u r a n c e f r a u d i n v i o l a t i o n o f § 11-41-29.

79.

Transamerica has suffered injury as a result o f such crime and m a y recover its damages for such injury pursuant to R.I. Gen. Laws § 9-1-2.

C O U N T VIII - C I V I L C O N S P I R A C Y (CARAMADRE, RADHAKRISHNAN, E S T A T E P L A N N I N G RESOURCES, MA GGIA C O M O a n d LIFEMARK)

80.

T r a n s a m e r i c a r e s t a t e s a n d realleges a l l p r e c e d i n g p a r a g r a p h s as i f s e t forth a t l e n g t h herein.

81.

Caramadre, R a d h a k r i s h n a n , Estate P l a n n i n g R e s o u r c e s , M a g g i a c o m o a n d L i f e m a r k reached an agreement to work in concert to obtain the Annuity unlawfully and b y

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Improper means. In doing so, Caramadre, Radhakrishnan, Estate Planning Resources, Maggiacomo and Lifemark intended to act illegally o r tortiously and have harmed T ransamerica. C O U N T IX - U N J U S T E N R I C H M E N T (LIFEMARK a n d MAGGIACOMO) 82. Transamerica restates and realleges all preceding paragraphs as i f set forth at length herein. 83. Transamerica paid commissions to Lifemark and/or Maggiacomo as a result o f the sale o f the A n n u i t y a n d , a s s u c h , L i f e m a r k o r M a g g i a c o m o h a v e a p p r e c i a t e d a b e n e f i t c o n f e r r e d by Transamerica. 84. I t would be inequitable for Lifemark o r Maggiacomo to retain the commission previously p a i d b e c a u s e it w a s p r o c u r e d b y t h e i r t o r t i o u s o r c r i m i n a l a c t s a s d e s c r i b e d h e r e i n . COUNT X - NEGLIGENCE ( L I F E M A R K a n d MAGGIACOMO) 85. Transamerica restates and realleges all preceding paragraphs as i f set forth at length herein. 86. Maggiacomo owed a duty to Transamerica to learn and obtain information material to Transamerica's review o f the application for the Annuity, including the facts that Garvey . . . . . . . .~, that Rodrigues had no relationship with Garvey and. lacked a n insurable interest in him, that Garvey did not knowingly apply for the Annuity and that he was paid to sign the application. Maggiacomo breached his duty o f care o w e d to Transamerica by failing to obtain and report s u c h information to Transamerica in connection with the application for the Annuity, thereby causing T r a n s a m e r i c a t o i s s u e t h e Annuity.

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87.

Lifemark owed a duty to Transamerica to adequately supervise and train its employees to ensure that insurance and investment products such as the Annuity would not be issued to aid to sign annuity applications, issued with named beneficiaries who have no insurable interest in the annuitant and issued without the knowledge or informed consent o f the annuitant. Lifemark's failure to adequately supervise and train Maggiacomo caused Transamerica to issue the Annuity.

88.

Transamerica has been financially harmed by the negligence o f Maggiacomo and Lifemark.

W H E R E F O R E , Transamerica respectfully requests that the Court grant the following relief: a) b) c) commissions; d) A j u d g m e n t a g a i n s t C a r a m a d r e , R a d h a k r i s h n a n , E s t a t e P l a n n i n g Resources, Rescission o f the Annuity and a judicial declaration o f such rescission; Alternatively, a declaration that the Annuity was void ab initio; Restitution o f all sums Transamerica has paid out on the Annuity, including sales

Maggiacomo and Lifemarkjointly and severally, awarding Transamerica damages for, among other things, commissions paid in connection with the Annuity, market losses suffered as a result o f the issuance o f the Annuity and costs, attorney's fees and expenses incurred investigating and pursuing this lawsuit, with prejudgment interest thereon; e) A declaration that Lifemark must indemnifY Transamerica for all losses, claims,

damages, liabilities and attorney's fees that Transamerica might incur in the future in connection with the Annuity; and
f)

Any other relief as the Court deems j u s t and equitable.

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JURY DEMAND: Transamerica h e r e b y requests trial b y j u r y o n all issues so triable. Respectfully submitted

Brooks R. Magratten sq., No. 358 Michael J. Daly, Es N o . 6 7 2 9 P I E R C E A T W O O LLP A t t o r n e y s for P l a i n t i f f 10 Weybosset St., Suite 4 0 0 Providence, RI 02903 ( 4 0 1 ) 5 8 8 - 5 1 1 3 [Tel.] ( 4 0 1 ) 5 8 8 - 5 1 6 6 [Fax] [e-mail] [e-mail] Dated:

ID~ ~ i

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