Provident Capital Indemnity, Ltd., Minor Vargas Calvo, Jorge L. Castillo and Desarrollos Comerciales Ronim, S.A.

On January 21, 2011, the SEC obtained a temporary restraining order and the appointment of a Receiver for Provident Capital Indemnity, Ltd. (PCI).  According to the complaint, PCI is an offshore company located in Costa Rica that provides financial guarantee bonds on life insurance policies, which are then packaged and sold as bonded life settlement investments across the U.S. and abroad.  From at least 2004 through March 2010, PCI issued approximately 197 bonds with a face value of more than $670 million.  The SEC alleges that PCI, its president Minor Vargas Calvo, and purported outside auditor Jorge L. Castillo misrepresented PCI’s ability to satisfy its obligations under its bonds.  The SEC further alleges they made material misrepresentations about the assets that backed the bonds, PCI’s credit rating, the availability of reinsurance to cover claims on PCI’s bonds and whether PCI’s financial statements had been audited. The SEC also named Desarrollos Comerciales Ronim, S.A., PCI’s managing agent, as a relief defendant.

For more information about the SEC’s action, you can read Litigation Release No. 21818 (Jan. 19, 2011).  A Preliminary Injunction was entered on February 11, 2011.  The Court’s docket number is:  SEC v. Provident Capital Indemnity, et al., Civil Action No. 3:11-cv-0045 (E.D. Va.) (Richmond Division).

The Court appointed Richard B. Roper as Receiver who continues his efforts to locate and recover assets for the benefit of investors in life settlement investments bonded by PCI.  If you are such an investor, please email the following information to Mr. Roper’s attorney, John S. Brannon, at john.brannon@tklaw.com:  

• Your name, address, phone number and email address;
• Name of the company you purchased your investment from; and
• Name of the insured on the policy, the amount of the policy and the amount you paid for your investment. 

The Receiver plans on providing periodic updates on the status of the Receivership to investors.