In April 2009, the Minnesota Department of Commerce (the “Department”) summarily suspended the insurance licenses of Michael Antonello and the insurance agency for which he served as chairman, Wealth Management Advisors, LLC (“Wealth Management”), for alleged dishonest practices in connection with the sale of life insurance policies and related Stranger Originated Life Insurance (“STOLI”) transactions. Specifically, the suspension order (the “Suspension Order”) alleges that Antonello secured 44 life insurance policies totaling $127,750,000 on the life of a single individual, John Paulson. According to the Suspension Order, Antonello misrepresented to the total amount of coverage already covering Paulson to the insurance companies in order to secure that much insurance for a single person. Antonello also received large commissions from the policies and profited from selling such policies to investors in the STOLI marketplace.
On December 2, 2009, the Department and Antonello (individually and on behalf of Wealth Management) entered into a consent order (the “Consent Order”) under which the Department fined Antonello and Wealth Management $250,000 and retroactively revoked their insurance producer licenses, effective April 16, 2009. Antonello and Wealth Management were also ordered to cease and desist from violating any Minnesota insurance laws. Antonello did not admit guilt in the Consent Order.