Houston firm sold 'bonded' life settlements to 800 mostly elderly investors; two men get 45 and 60 years
A&O Resource Management Ltd. of Houston, Texas sold whole and fractional interests in "bonded life settlements" to some 800 investors, most of them elderly, raising about $100 million. In July 2011 five people who pleaded guilty were sentenced to terms ranging from 188 to 36 months. The two others, Christian Allmendinger and Adley H. Abdulwahab, were found guilty at trial and were sentenced in September 2011 to 45 and 60 years.
- Year
- 2011
- Where
- United States
- Outcome
- Sentenced
- Reported loss
- $100.0 million
- Victims
- 800
- Schemes
- Life settlement fraud
- Last reviewed
- 2026-10-28
The facts, as recorded
- Investors were offered whole and fractional interests in bonded life settlements, said to be backed against longevity risk by a reinsurance bond, as fixed-maturity investments with a term of four to seven years and a guaranteed minimum compounded annual return of 10% to 12%.
- Some 800 investors, most of them elderly, bought the investments, and A&O took in about $100 million, according to InvestmentNews.
- A marketing company and independent insurance agents who were not securities licensed sold the investments, and A&O paid them a commission of 10% of each purchase.
- The U.S. Attorney's Office said the money was not put into policies but spent by A&O executives and employees on multi-million dollar homes, high-end cars and diamonds.
- Securities and insurance regulators became suspicious in 2006 about unregistered securities. Law enforcement said the men set up a phony series of sales of A&O in 2007 to put distance between themselves and regulators, and created sham companies, Blue Dymond and Physician's Trust.
- A&O went into bankruptcy in September 2009 after failing to pay the premiums on its underlying policies.
- Russell Mackert, A&O's general counsel, received more than 15 years. The ABA Journal reported, from an Associated Press account and Corporate Counsel, that he created overseas shell companies to pretend to buy A&O, hired an actor who pretended to do due diligence and filed false affidavits in civil suits, and that prosecutors said he earned about $500,000 in the scheme.
- The defense lawyers for Allmendinger and Abdulwahab said in October 2011 that they would appeal, or had appealed, their sentences.
Why this case matters
A&O’s pitch was that the investment was safe. The U.S. Attorney said “the safety, security and no-risk nature of the investment was critical to the sales pitch, and it was all a big fat lie.” The product was described as a fixed-maturity investment with a guaranteed minimum return, supposedly backed against longevity risk by a reinsurance bond.
How the sales reached investors
A marketing company and independent insurance agents who did not hold securities licences sold the investments, according to InvestmentNews, and were paid a 10% commission on each purchase. The sources do not say whether investors knew the agents were not licensed to sell securities, so this page does not either.
The caveat
Seven people were convicted and the sentences above are those reported in 2011. Allmendinger’s and Abdulwahab’s lawyers said they would appeal; the sources here do not say what happened on appeal. FA magazine attributes one statement to “the attorney general” where the rest of the article refers to the U.S. Attorney; this page attributes it to the U.S. Attorney’s Office. The two sentences of 45 and 60 years are those reported by InvestmentNews as imposed on September 27 and 28.
Sources
- Life settlements scammers get longer jail sentences than Enron's Skilling. InvestmentNews. Accessed 2026-10-28. Supports: The bonded life settlement product, the 10% to 12% guaranteed return, the 800 investors and $100 million, the commissions, the 2006 regulator concerns, the 2007 phony sales, the 2009 bankruptcy and the 45-year and 60-year sentences and appeal statements.
- Men Sentenced For Fleecing Retirees In Huge Life Settlements Fraud. Financial Advisor magazine. Accessed 2026-10-28. Supports: The July 2011 sentences of five defendants from 188 to 36 months, how the money was spent, the sham companies and the two defendants found guilty at trial.
- Former GC Sentenced to 15 Years for Aiding Life Settlement Fraud; Defense Argued He Was Naïve. ABA Journal. Accessed 2026-10-28. Supports: Mackert's sentence of more than 15 years, his overseas shell companies, the actor who pretended to do due diligence and the $500,000 prosecutors said he earned.