AOC Challenger left CNBC to join Life Settlement Company

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Before Michelle Caruso-Cabrera launched a conservative debut challenge against Democratic Rep. Alexandria Ocasio-Cortez in New York City, she was a board member of GWG Holdings, a life settlement firm that earns money from life insurance policies purchased primarily from the elderly, terminally ill and those unable to afford it for less than face value, making a profit when the recipient dies.

In September 2018, Caruso-Cabrera left her full-time position as a presenter at CNBC to join the board of directors of Beneficient Group, a Dallas based company which lends money to ultra-rich Americans who need it quickly by turning illiquid assets into cash. Beneficient is funded by GWG Holdings, a Minneapolis-based life insurance investor that paid the company nearly $ 1 billion in a transaction in 2018.

Last April, GWG Holdings announced that it was expanding its partnership with Beneficient, replacing most of its board with Beneficient’s current board. a SEC filing shows that Caruso-Cabrera joined the board of GWG on the same day. A few months later, she received 8,169 restricted stock units from GWG Holdings, according to deposits.

Caruso-Cabrera explained his decision to join the GWG board in a farewell segment on CNBC. “We talk so much about corporate governance on CNBC; we criticize it a lot, don’t we? ” she said. “And I thought, you know, maybe the next step should be corporate governance, because boards need help.”

On February 21, Caruso-Cabrera resigned his board positions to run for Congress, according to SEC filings. She has positioned herself as a moderate, business-friendly Democrat in the race, accusing Ocasio-Cortez of being “out of touch” with her constituents and not belonging to the working class. Caruso-Cabrera, who lived for years in an upscale apartment at the Trump International Hotel and Tower in Manhattan, said Business Insider that Ocasio-Cortez “doesn’t know what it takes to put food on the table and put a roof over the head of a family.” Ocasio-Cortez, in fact, took on multiple jobs after graduating from college to help his family make ends meet, working 18 hours a day to supplement his mother’s income as a housekeeper and bus driver, as a first year legislator. described.

Caruso-Cabrera’s campaign quickly garnered support from corporate interests, receiving the first donations from dozens of leading private equity executives and top investment bankers, such as The Intercept previously. reported. In particular, its offer is supported speak United States Chamber of Commerce, a powerful conservative lobby group that has invested millions in the election of Republicans. (Caruso-Cabrera was herself a Republican until a few years ago.)

Caruso-Cabrera was making public appearances on behalf of Beneficient as recently as this year. In January, she appeared on CNBC, where she remained a contributor after quitting her job, as a member of the Beneficient board of directors, to discuss Goldman Sachs Group Inc.’s commitment to increasing diversity on Squawk Box boards.

Lifetime regulations, too known as “viatic regulations “, increased in the 1980s, at the height of the AIDS epidemic. The New York Times described the niche industry in a 2017 item As such:

If a life settlement company likes their chances of making a profit, they will buy the policy, paying more than the cash value of the policy – the amount received if the policy were canceled – but less than the face value or benefit. of deceased. The company acquires the policy and continues to pay the premiums. Then, the company (or a large investor who buys lots of policies) cash in on the seller’s death. It’s something like a reverse mortgage, but on your life rather than your home.

GWG Holdings, which has a portfolio of over $ 2 billion, entered the life settlement business in 2006. The company reported in a SEC 2019 filing that it continues to have a portfolio of life insurance policies, but that it would no longer purchase additional policies. Its subsidiary, GWG Life, told the New York Times that it “works with nursing homes and assisted living chains to reach people who are considering the huge costs of long-term care. Life insurance companies offer larger payouts to people they expect will die soon – the sooner they die, the faster the payout. (GWG called the benefits of insured deaths “”political achievements“and wallet”seasoning. ”)

To increase its profits, GWG Holdings used biological specimens to reach more precise estimates of life expectancy. “GWG has been sending cheek swab kits, to capture saliva, to potential policy sellers since February,” one said. 2017 Forbes article noted. Life Epigenetics, which is owned by GWG Holdings, “is working to commercialize epigenetic technology for life insurance and related industries,” according to the company’s website. In 2018, GWG collected DNA from residents of Minneapolis, paying $ 100 for blood, urine and saliva samples to expand its research on life expectancy. The Star Tribune reported At the time, Scientific Testing Partners, which is owned by Life Epigenetics, was looking for 1,000 participants for its genetic information collection. A company spokesperson told The Intercept that the GWG subsidiary involved in epigenetic research was established last year and operated as a separate company.

The company also approved a 2018 bill that would have allowed seniors, regardless of their health, to sell their life insurance policies and set aside the proceeds in a tax-free account for pay certain health costs, including long-term care. In a prePress release, GWG, which could benefit from inducing seniors to sell their life insurance policies, suggested that by preventing seniors from receiving Medicaid for their long-term care, the bill would potentially allow ” taxpayers to save up to $ 2 billion over the next nine years ”. Bill floundered through the House with only two sponsors.

Asked about Caruso-Cabrera’s involvement in GWG and her support for this bill, campaign spokesperson Katy Delgado said: “Michelle was proud to be one of the first Latinas to serve on the board of directors of a financial services company. Once elected to Congress, Michelle will work with all her colleagues in Congress to draft and pass bills to ensure that older people are not forgotten. “


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