Miami Herald - June 21, 2005
Patrick Danner, pdanner@herald.com

Steven Steiner, who was an executive with Mutual Benefits Corp., has been added as a defendant in the civil fraud case against the shuttered Fort Lauderdale viatical-settlement company.

The Securities and Exchange Commission on Monday identified Steiner as the ''public face'' of Mutual Benefits, which has been accused of defrauding investors who had purchased life-insurance policies belonging to sick and elderly people. Some 29,000 investors collectively purchased 7,000 policies with a face value of more than $1 billion.

Steiner, 53, met with prospective investors and participated in training sessions with the company's sales agents, the SEC alleges. Steiner is the brother of Joel and Leslie Steinger, named by the SEC as the ''de facto principals'' of Mutual Benefits and who spell their names differently. The SEC accused them of fraud last year.

''We're certainly intending to vigorously defend the charges, which we don't think are well founded,'' said Faith Gay, Steiner's Miami lawyer. Gay noted the SEC has not accused Steiner of acting as a controlling officer of Mutual Benefits.

CHARITABLE

Steiner, who identified himself in a court document as Mutual Benefits' vice president of public relations, oversaw Mutual Benefits' extensive charitable endeavors, Gay said. It donated ''millions and millions'' to charities, including AIDS/HIV organizations.

''All that positive good the company was doing in the county of Broward and the state of Florida has been destroyed by the SEC,'' Gay said.

Mutual Benefits, Gay said, was a major donor to AIDS Project Florida, an Oakland Park organization that assists people affected by HIV. Steiner chairs the organization.

The SEC added Steiner to the suit after additional investigation and interviews with various witnesses, said SEC lawyer Teresa J. Verges.

''Steven Steiner was just as culpable as his brothers because he participated in the offering fraud,'' Verges said. ``He held himself out as knowing about the business and made glowing remarks about Mutual Benefits.''

Viatical and life-settlement companies purchase life insurance policies of the sick and elderly and then sell the policies to investors, who collect the death benefits when the insured person dies. But the SEC alleges Mutual Benefits defrauded investors by using bogus life expectancies in determining when the insured would die and using new investors' money to pay off earlier ones.

Lawyers for the Steingers have denied the allegations.

Steiner collected about $16 million from Mutual Benefits, Verges said.

LEGITIMATE CLAIMS

A company controlled by Steiner, SKS Consulting, was originally named as a defendant in the civil action brought by the SEC in May 2004. But SKS, which the SEC claimed received $3.8 million in fees from Mutual Benefits, was later dismissed as a defendant by U.S. District Judge Federico A. Moreno. He found SKS had a legitimate claim to the money paid by Mutual Benefits.

Moreno last year froze Mutual Benefits' assets and appointed a receiver to oversee the company.

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