U.S. v. Provident Capital Indemnity, Ltd. (E.D. Va.) is an action against Provident, a Dominican company doing business in Costa Rica, and its president Minor Vargas Calvo and Jose Castillo, the auditor of the company. The indictment contains one count of conspiracy to commit mail and wire fraud, three counts of mail fraud and three counts of wire fraud. The SEC brought a parallel action against the same defendants. SEC v. Provident Capital Indemnity, Ltd., Civil Action No. 3:11-cv-045 (E.D. Va. Jan. 19, 2011). The complaint alleges violations of Securities Act Section 17(a) and Exchange Act Section 10(b). The defendants are alleged to have engaged in a scheme to defraud by making misrepresentations about Provident’s reinsurers, financial statements and ratings. The scheme was in connection with the sale of financial guarantee bonds to companies that sold life settlements or securities backed by life settlements to investors. Specifically, from 2004 to the present the company sold over $600 million in bonds to life settlement investment companies in the U.S. and several other countries. Those clients then sold investment offerings backed by Provident’s bonds to investors around the world. The cases are in litigation.