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| Adley H. Abdulwahab |
Two principals of A&O Resource Management Ltd. have been sentenced for their roles in a $100 million life settlement fraud scheme, which included more than 800 victims across the United States and Canada.
Adley H. Abdulwahab, 36, of Houston, a hedge fund manager and part owner of A&O, was sentenced to 60 years in prison. The co-founder and vice president of A&O, Christian Allmendinger, 40, also of Houston, was sentenced to 45 years in prison.
U.S. Attorney for the Eastern District of Virginia Neil H. MacBride and Assistant Attorney General Lanny A. Breuer of the Criminal Division made the announcement after the two A&O principals were sentenced by U.S. District Judge Robert E. Payne.
“The victims of A&O’s scam were looking for a conservative investment, and they were manipulated into believing A&O was a safe, secure, no-risk investment. It was all a big, fat lie; A&O was a sham, a financial house of cards waiting to collapse,” said MacBride.
“Hundreds of elderly retirees saw their life savings vanish, and their lives have been devastated by their loss. The Virginia Financial and Securities Fraud Task Force is dedicated to pursuing national impact frauds whose scams affect not only those on Wall Street, but folks on Main Street who work hard, play by the rules and try to provide for their families.”
High life
“These defendants used the savings of their unsuspecting, often elderly, investors to live the high life—luxury houses, fancy cars, and even a 15-karat diamond ring,” said Assistant Attorney General Breuer. “Having wiped out the life savings of many of their victims and stolen funds marked for retirement, Mr. Abdulwahab and Mr. Allmendinger appropriately now face significant prison terms. We will continue to aggressively pursue financial fraud throughout the country, and bring to justice those who illegally use the financial system for personal benefit.”
On Sept. 7, 2010, a federal grand jury returned an 18-count indictment against Abdulwahab, Allmendinger, and David White, 41, the former president of A&O. White and four others associated with the fraud scheme pleaded guilty in the fall of 2010. Allmendinger was convicted at trial on March 23, 2011, and Abdulwahab was convicted at trial on June 10, 2011.
According to court records and evidence at trial, the principals at A&O engaged in a scheme to defraud investors by making misrepresentations about such things as A&O’s prior success, its size and office locations, its number of employees, the risks of its investment offerings, and its safekeeping and use of investor funds.
Sham transaction
When state regulators began to scrutinize A&O’s investment products, Abdulwahab and others manufactured a sham sales transaction to “sell” A&O to a shell corporate entity named Blue Dymond and later to another shell corporate entity named Physician’s Trust.
This sale ended Allmendinger’s association with the fraud scheme; however, A&O and Physician’s Trust were still secretly controlled by Abdulwahab and his co-conspirators, who continued the fraud scheme through September 2009. The A&O fraud scheme caused more than 800 investors, many of whom were elderly, to lose more than $100 million. The vast majority lost all of their investment, which represented for many all of the money they had saved for their retirement.
Evidence at trial showed that A&O principals used the investors’ money for personal enrichment, including purchasing multi-million dollar homes, luxury cars, a 15-carat diamond ring, and other property.
“The A&O scheme wreaked havoc on the lives of hundreds of investors, and now those responsible will be held accountable as a result of the outstanding and collaborative work of task force members,” said Lorin Reisner, Deputy Director of the U.S. Securities and Exchange Commission’s (SEC) Division of Enforcement
