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{{main|National Heritage Life Insurance Company}}
{{main|National Heritage Life Insurance Company}}


Weiss and others siphoned $450 million from the National Heritage Life Insurance Company by defrauding mortgages and stocks. The majority of the insurer's policyholders were elderly Florida residents and federal authorities "said it ranked as the largest insurance company failure caused by criminal acts in United States history."<ref name="Times-2000" /><ref name="Anatomy 100">{{cite web |url=http://www.bestreview.com/media/pdfs/2000_septlh.pdf |author=Whitney, Sally |work=Best's Review |date=September 2000 |title=Anatomy of a Failure |page=100 |archive-url=https://web.archive.org/web/20060323065220/http://www.bestreview.com/media/pdfs/2000_septlh.pdf |archive-date=March 23, 2006 |url-status=dead |access-date=February 14, 2018}}</ref> After taking control in 1993, Weiss and others bought worthless stocks and mortgages in a series of deals that transferred money into accounts controlled by Weiss.<ref name="Times-2000" /> The heavy involvement of attorneys, who comprised one-quarter of the persons eventually convicted, helped the conspirators keep the fraud secret.<ref name="Anatomy 100" />
Weiss and others siphoned $420 million from the National Heritage Life Insurance Company by defrauding mortgages and stocks. The majority of the insurer's policyholders were elderly Florida residents and federal authorities "said it ranked as the largest insurance company failure caused by criminal acts in United States history."<ref name="Times-2000" /><ref name="Anatomy 100">{{cite web |url=http://www.bestreview.com/media/pdfs/2000_septlh.pdf |author=Whitney, Sally |work=Best's Review |date=September 2000 |title=Anatomy of a Failure |page=100 |archive-url=https://web.archive.org/web/20060323065220/http://www.bestreview.com/media/pdfs/2000_septlh.pdf |archive-date=March 23, 2006 |url-status=dead |access-date=February 14, 2018}}</ref> After taking control in 1993, Weiss and others bought worthless stocks and mortgages in a series of deals that transferred money into accounts controlled by Weiss.<ref name="Times-2000" /> The heavy involvement of attorneys, who comprised one-quarter of the persons eventually convicted, helped the conspirators keep the fraud secret.<ref name="Anatomy 100" />


National Life was liquidated in 1995 and had about 29,000 customers, of whom about 10,500 lived in Florida. Many lost their life savings as a result of the fraud, though various guaranty funds repaid policy and annuity holders about $420 million.<ref name="Bests Dec2000">{{cite journal |title=National heritage fugitive awaits extradition in Vienna |journal=Best's Review |date=December 2000 |volume=101 |issue=8 |page=17}}</ref>
National Life was liquidated in 1995 and had about 29,000 customers, of whom about 10,500 lived in Florida. Many lost their life savings as a result of the fraud, though various guaranty funds repaid policy and annuity holders about $420 million.<ref name="Bests Dec2000">{{cite journal |title=National heritage fugitive awaits extradition in Vienna |journal=Best's Review |date=December 2000 |volume=101 |issue=8 |page=17}}</ref>

Revision as of 07:37, 29 January 2021

Sholam Weiss
Born (1954-04-01) April 1, 1954 (age 70)
Brooklyn, New York, U.S.
StatusReleased via presidential sentence commutation, January 19, 2021
OccupationFormer business consultant
Criminal charge78 counts of racketeering, wire fraud and money laundering
Penalty835 years imprisonment (reduced from 845 years in 2009), three years supervised release, $123.4 million fine, $125 million restitution (Paid in full)

Sholam Weiss (born April 1, 1954)[citation needed] is an American former businessman, Philanthropist and Convicted Felon [1]

In 2000, Weiss was sentenced to 845 years in prison for racketeering, wire fraud, money laundering, and other charges in connection to the collapse of the National Heritage Life Insurance Company. He and other defendants engaged in an immense scheme resulting in what was believed to be the largest insurance company failure ever caused by criminal acts.[2][3]

His sentence was believed to be the longest prison term ever imposed in a U.S. federal court. and the longest ever for white-collar crime.[4][3][5] Weiss fled the country during jury deliberations in October 1999, captured in Austria in October 2000 and was later extradited from Austria in 2002. His sentence was commuted by President Donald Trump on January 19, 2021.

Early life and background

Weiss grew up in Borough Park, New York; he attended a Yiddish-language Yeshiva and, as a child, Weiss delivered fruit for his father's fruit stand. As a young man, he did construction work, and purchased Windsor Plumbing Supply in 1974, at the age of 20. The firm was profitable for the 1970s and for most of the 1980s, but declared bankruptcy during the 1989 recession, then Weiss became a bankruptcy specialist assisting many other struggling businesses.[3]

In 1994, Weiss was indicted on mail fraud charges and found guilty, for which he served eight months in prison, Weiss had falsely inflated a more than $1 million claim worth of factory defected bathtubs claiming insurance as non-defected In a 1986 warehouse fire.[3]

National Heritage Life Insurance Company fraud

Main article: National Heritage Life Insurance Company

Weiss and others siphoned $420 million from the National Heritage Life Insurance Company by defrauding mortgages and stocks. The majority of the insurer's policyholders were elderly Florida residents and federal authorities "said it ranked as the largest insurance company failure caused by criminal acts in United States history."[3][5] After taking control in 1993, Weiss and others bought worthless stocks and mortgages in a series of deals that transferred money into accounts controlled by Weiss.[3] The heavy involvement of attorneys, who comprised one-quarter of the persons eventually convicted, helped the conspirators keep the fraud secret.[5]

National Life was liquidated in 1995 and had about 29,000 customers, of whom about 10,500 lived in Florida. Many lost their life savings as a result of the fraud, though various guaranty funds repaid policy and annuity holders about $420 million.[6]

Trial, sentencing and flight

Weiss rejected a government offer of a plea deal in which he would have served five years in prison, and chose to go to trial.[1] Weiss fled the country while the jury was deliberating. In November 1999, he was found guilty in absentia at the trial and was sentenced to 845 years in prison, three years of supervised release, a fine of $123.4 million and ordered to pay $125 million in restitution. Asset forfeitures of $57 million were also ordered.[7][5][4] The restitution was paid in full.[8]

After fleeing the trial Weiss travelled to Israel, Belgium, Brazil, Austria and the United Kingdom.[9] Weiss shaved his beard, lost weight, used prepaid phones and created false identities to avoid detection. During this time he lived an extravagant lifestyle and spent money on fine dining and gambling.[9] He was apprehended in Vienna, Austria in October 2000, he first fought extradition and was eventually extradited to the United States in 2002.[10][1]

Sentence commuted

On January 19, 2021, President Donald Trump commuted Weiss's sentence, in one of the 70 pardons and 73 sentence commutations issued on his last full day in office. A White House statement said that Weiss "has already served over 18 years and paid substantial restitution. He is 66 years old and suffers from chronic health conditions,” [11][12][8]

Criticism of sentence

Weiss' sentence was controversial due to its length, which exceeded the 150-year sentence imposed on Bernard Madoff. The National Association of Criminal Defense Lawyers included Weiss with other clemency petitions it submitted to the White House. Rep. Sean Patrick Maloney asserted that the sentence was retaliation for rejecting a five-year plea deal.[4][8] Weiss hired lobbyist Brett Tolman to press for commutation, and other supporters included former U.S. Attorney General Edwin Meese, former U.S. Solicitor General Seth Waxman and Harvard Law School professor Alan Dershowitz. The commutation campaign was spearheaded by his nephew.[4]

See also

References

  1. ^ a b c Chris McKenna (July 1, 2002). "Convicted thief paid for religious school". Times Herald-Record. Middletown, NY.
  2. ^ Writer, Susan Clary, Sentinel Staff. "INSURANCE THIEF BACK IN FLORIDA". OrlandoSentinel.com. Retrieved 2021-01-17.{{cite web}}: CS1 maint: multiple names: authors list (link)
  3. ^ a b c d e f Rashbaum, William K. (9 March 2000). "845 Years in Prison, If the Authorities Can Catch Him; F.B.I. Says Fugitive Has a Flair For Fraud and Hiding Stolen Cash". The New York Times. Retrieved 6 July 2009.
  4. ^ a b c d Yaffe-Bellany, David (2021-01-20). "Fraudster Returns Home After Trump Commutes 835-Year Term". Bloomberg.com. Retrieved 2021-01-23.{{cite news}}: CS1 maint: url-status (link)
  5. ^ a b c d Whitney, Sally (September 2000). "Anatomy of a Failure" (PDF). Best's Review. p. 100. Archived from the original (PDF) on March 23, 2006. Retrieved February 14, 2018.
  6. ^ "National heritage fugitive awaits extradition in Vienna". Best's Review. 101 (8): 17. December 2000.
  7. ^ Cite error: The named reference doj was invoked but never defined (see the help page).
  8. ^ a b c McKenna, Chris. "Trump commutes prison sentence of Monsey man serving 835 years for 1999 fraud conviction". Times Herald-Record. Retrieved 2021-01-23.
  9. ^ a b Rashbaum, William K. (26 October 2000). "Fugitive Arrested in Austria After a Year on the Run". The New York Times.
  10. ^ Susan Clary (October 26, 2000). "Extravagant Fugitive's Run Comes to An End". Orlando Sentinel.
  11. ^ "Statement from the Press Secretary Regarding Executive Grants of Clemency – The White House". trumpwhitehouse.archives.gov. Retrieved 2021-01-27.
  12. ^ Schulte, Fred (26 January 2021). "Trump's pardons included health execs behind massive Medicare frauds". Chicago Sun-Times. Kaiser Health News. Retrieved 27 January 2021.
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