By LARRY O'DELL
The Associated Press
Wednesday, March 23, 2011; 8:50 PM
RICHMOND, Va. -- A Texas businessman faces decades in prison after being convicted in a $100 million life insurance fraud scheme in which his company used investors' money to buy policies at less than face value then collected benefits when the insured people died.
Christian Allmendinger showed no reaction Wednesday as the verdict was read - guilty on all federal charges of mail fraud, money laundering and securities fraud - as his wife and mother wept quietly.
U.S. District Judge Robert Payne in Virginia set sentencing for Aug. 12 and ordered Allmendinger held in custody until he can determine whether the former A&O Life Funds executive's wife has enough money to make him a flight risk. Allmendinger, who had remained free before his trial, surrendered his suit jacket and tie and was led away by a U.S. marshal.
Assistant U.S. Attorney Michael Dry said Allmendinger, 39, is facing a sentencing guideline range of 22 to 27 years.
Prosecutors argued during a seven-day trial that Allmendinger and his associates lied to investors about several aspects of the company he helped found, including its size, the way it handled people's money and its record of success.
The government claimed the company defrauded hundreds of investors in about three dozen states and Canada. The case was brought in Richmond because it is where some of the victims live as well as an A&O sales agent who pleaded guilty in the case and testified against Allmendinger. Several investors who lost money also testified.
Defense attorney Barry J. Pollack claimed during the trial that his client did nothing wrong, and that investors only lost money after Allmendinger was squeezed out of the business in 2007 by partners who looted A&O's accounts and failed to make payments to keep insurance premiums in force.
"We respect the jury's decision, but we strongly disagree with it," Pollack said after the verdict. He said he will take the case to the 4th U.S. Circuit Court of Appeals.
Toward the end of the trial, the jury was shown photographs of Allmendinger's sprawling Spanish-style home, a 15-carat diamond ring, a grand piano and Lamborghini and Maserati automobiles - the spoils of his ill-gotten fortune, prosecutors said.
"Christian Allmendinger stole millions from elderly retirees to buy flashy cars and a multi-million-dollar home," U.S. Attorney Neil MacBride said in a statement. "Mr. Allmendinger now has been held accountable for his crimes, and we will continue to pursue other financial fraudsters who prey on those in Virginia and throughout the country."
After the jury delivered its verdict, the court took up the issue of whether Allmendinger should be allowed to remain free until sentencing.
Assistant U.S. Attorney Michael Dry urged Payne to keep Allmendinger locked up, saying several factors made him a flight risk: he lives in a border state, he had $200,000 cash stashed in his home when he was arrested, and he had sent a text message suggesting to a former A&O sales agent under investigation that he flee.
Dry produced a copy of the message, which read: "You need to vanish, bro." He said the message showed Allmendinger, facing a lengthy sentence, would be inclined to vanish, too.
Pollack said the text message was just an offhand remark, not serious advice. He said Allmendinger has strong ties to the Houston area, his assets have been frozen by the government, and his passport has been surrendered to federal court officials in Houston.
Payne was concerned, however, that there was no accounting of Allmendinger's wife's assets.
"Immediate release is not appropriate," Payne said. "I need a more complete understanding of what financial resources are available through his wife."
Payne said he will revisit the issue after Allmendinger's attorneys and federal authorities work up a list of bank accounts and other assets.
Pollack said he hoped for a hearing in about a week.