Kim Miller, writer for the Palm Beach Post, deserves credit for keeping on top of the unfolding Barry Kaye situation (which in turn should send really strong messages to the philanthropic community to stay away from various insurance schemes, particularly ones involving viatical settlements).
Here is the most recent story on Mr. Kaye:
http://www.palmbeachpost.com/localnews/content/local_news/epaper/2009/07/29/0729barrykaye.html
Apparently, he is being sued by an 81-year-old who bought a $5 million life insurance policy in 2006 on the promise from Mr. Kaye that they would be able to sell that policy for profit after two years.
This suit isn't directly about charities but the type of plan that the suit involves is very similar to ones that Mr. Kaye and many, many others have been promoting over the past few years. Can't lose propositions? Yea, right. Imagine if your institution "invested" a few hundred thousand in premiums on the expectation of healthy profits after two years, only to find that there is no market for these policies anymore. Finally, we have some evidence that these viatical schemes might be "dead in the water" because nobody is buying anymore (the big buyers of these policies was supposedly places like AIG - solid company...).
Anyway, for those interested in the time-line of Barry Kaye's giving to FAU, check out this link to the Palm Beach Post:
http://www.palmbeachpost.com/localnews/content/local_news/epaper/2009/06/12/0612kayetimeline.html
I don't think this story is over by a long shot.
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4 comments:
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