SEC bars two R.I. brokers after annuities scheme

PROVIDENCE – The Securities and Exchange Commission barred two Rhode Island-based brokers from the securities industry for their roles in a variable annuities scheme to profit from the imminent deaths of terminally ill individuals.
According to a press release from the commission, Edward J. Hanrahan, 44, of West Greenwich, and Edward L. Maggiacomo Jr., 50, of Warwick, agreed to the industry bars to settle the SEC’s charges that they offered and sold variable annuities as part of an investment scheme devised by Joseph A. Caramadre, 54, of Cranston.
Caramadre was later criminally charged by the U.S. Attorney for the District of Rhode Island with conspiracy and wire fraud and sentenced to six years in prison. Earlier this year, he was ordered to pay more than $46 million in restitution.
“Caramadre was not registered as a broker, so he needed Hanrahan and Maggiacomo to help complete these crooked deals. In barring Hanrahan and Maggiacomo from the industry, we are looking to protect investors from two brokers who have demonstrated that they cannot be trusted in the industry,” Paul G. Levenson, director of the SEC’s Boston Regional Office, said in a statement.
According to the SEC’s order against Hanrahan, he was a partial owner of Estate Planning Resources Inc. in Cranston – Caramadre was the majority owner, president and CEO of the company.
Hanrahan received at least $483,187 in commissions, of which he gave 82.75 percent to Caramadre, leaving him with $83,349.76. Hanrahan was to pay the $83,349.76 plus interest for a total of $99,953.76, but that amount was offsetby $200,000 already paid to settle related claims, so he does not owe anything to the commission, the order states.
Maggiacomo was a registered representative of a registered broker-dealer and was associated with an investment adviser until his termination in 2012. The firm was not named.
Maggiacomo received at least $619,292 in commissions, of which he gave 65 percent to Caramadre, leaving him with $216,752.21. He was supposed to pay that amount, plus interest, for a total of $263,197.91. He has 30 days to pay the money, the order states. No money is owed at this time, the order states.

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