Ex-financier gets 18-month term - East Valley Tribune: East Valley Local News

Ex-financier gets 18-month term

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Posted: Saturday, August 21, 2004 7:18 am | Updated: 5:43 pm, Thu Oct 6, 2011.

A Scottsdale man who swindled millions from investors was handcuffed in court Friday and led off for his first day of an 18-month sentence.

But Richard Dean Carrington, 35, who pleaded guilty to two counts of felony theft and one count of aggravated assault, will spend only nights in confinement.

During the day, the former financier will be released to operate a security alarm company. The goal, his attorney Mark Dwyer said at Friday’s sentencing hearing, is to allow Carrington a way to pay restitution to roughly 600 victims.

"I want you to know even though I committed the crimes, I never meant to harm anyone," Carrington told Maricopa County Superior Court Judge Barry C. Schneider.

Prosecutors said a five-year investigation of Carrington’s two Scottsdale companies, Carrington Estate Planning Services and Carrington Investment Services, showed he sold investors contracts involving bogus life insurance policies of AIDS patients.

Carrington was sentenced to one year for theft and another six months for a fight in which he broke his girlfriend’s nose. He will be on probation at least five years after his jail term and has to pay up to $3.1 million in restitution at a rate of $500 a month.

Two defrauded investors asked that Carrington receive the maximum sentence. One, Mary Lou Reck of Prescott Valley, said she and her husband lost about $70,000 — their life savings — and continue to lose money on a policy that may not pay before their deaths. Carrington sold contracts, called viaticals, which originated as a way for the gravely ill to pay their bills. For example, someone with AIDS and a life insurance policy worth $100,000 could sell it to an investor for $75,000 and use that money to pay off debt. When the policyholder dies, the investor gets full proceeds.

Carrington paid AIDS patients to sign up for life insurance without revealing their illnesses. He resold the viaticals to investors, who lost their money when insurance companies canceled the policies because applicants lied about their illnesses.

He also sold viaticals to investors on the premise that they were for people with lifethreatening illnesses.

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