Newly-filed court documents indicate that the lawyer for Joel Steinger, accused of running a $1.25 billion Ponzi scheme, is seeking to withdraw as counsel due to the apparent inability of his client to pay his legal bill. Ed Shohat, a prominent Miami criminal defense attorney, claims he is owed in excess of $2.5 million for his past and continuing representation of Steinger, and that he has not been paid since May 2008. While Steinger may have intended to use proceeds from the attempted sale of his $3.1 million home, prosecutors recently filed court documents indicating the government intends to seek forfeiture of the home should Steinger be convicted, reasoning that funds from his scheme were used to pay for it.
Steinger was charged in January 2009, along with several other individuals, in a twenty-five count indictment alleging that his involvement with Mutual Benefits Corp. was an elaborate Ponzi scheme that bilked more than 28,000 victims out of nearly $1 billion dollars. Mutual Benefit purported to sell viatical and life insurance settlements through a network of sales agents, which were marketed as safe investments without risk In reality, many of the policies marketed could not be re-sold, life-expectancy figures were manipulated, and investor funds were commingled to pay premium obligations on older policies.
Thus far, ten individuals associated with Mutual Benefits Corp. have pled guilty, including attorney Michael McNerney, who pled guilty to a conspiracy charge earlier this year. Steinger is not scheduled to stand trial until early 2013. Steinger's case has been overshadowed by convicted Ponzi schemer Scott Rothstein, who was indicted shortly before Steinger for a $1.2 billion Ponzi scheme selling purported civil settlements. Rothstein has since been sentenced to 50 years in prison.