Benistar.Company 

Insurance deals strike a dissonant chord - startribune.com

Michael Antonello has used a lucrative career as an independent New Brighton life insurance agent as a way to finance his passions: American impressionist artwork and classical music.

He amassed millions of dollars in commissions by becoming a top seller of tax shelters and by selling scores of policies to rich, elderly clients. He was among the pioneers of an aggressive practice in which policyholders resold their future "death benefits" to investors.

Commissions from insurers enabled Antonello, 58, to spend lavishly on his love of the arts. He bought a 1720 Stradivarius violin, valued at $3 million, and returned to playing seriously. He gave the MacPhail Center for Music in Minneapolis "more than $1 million" in 2008, which got his name emblazoned on a concert hall. And in just three years his tax-exempt Antonello Family Foundation, formed in 2006 to buy art for public display, amassed nearly $17 million in assets from Antonello and his namesake insurance agency.

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Former Benistar head charged with misappropriating $9M in client funds - bizjournals.com

The former chairman of Newton-based Benistar Property Exchange Co. has been charged with mail and wire fraud by a federal grand jury in connection with a scheme that allegedly resulted in the misappropriation of roughly $9 million in client funds, the Justice Department has announced.

Daniel E. Carpenter was charged in a 19-count indictment, according to U.S. District Attorney Michael Sullivan and Kenneth Kaiser, special agent in charge of the FBI in New England.

The now-defunct Benistar was an intermediary in property exchanges performed under a section of the Internal Revenue Code that permits property owners to defer capital gains tax that would otherwise be owed upon the sale of property by rolling over the proceeds of the sale into the purchase of replacement property.

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Decision subjects law firm to class action RICO claim - newenglandinhouse.com

​Civil litigators say a 6th U.S. Circuit Court of Appeals ruling allowing a class action racketeering suit to proceed against a Boston-based law firm sends a dangerous message to tax attorneys. In Ouwinga, et al. v. Benistar 419 Plan Services, Inc., et al., the court held that a group of Michigan-based investors could pursue a civil claim against Edwards, Wildman, Palmer over a series of legal opinion letters the firm wrote to client John Hancock Life Insurance.

The firm unsuccessfully argued that it had no way of knowing that the plaintiffs, who were not its clients, would review or act on the advice in the letters.
Former Massachusetts Board of Bar Overseers Vice Chairman Thomas E. Peisch, though not involved in the case, said he was “horrified” by the decision.
“Edwards Wildman is a highly regarded national law firm that appears to me to have gone out of its way to consider the tax implications carefully. This is a terribly unfortunate opinion that ought to give pause to every lawyer who ever advises a client on an investment matter,” said Peisch, a partner at Conn, Kavanaugh, Rosenthal, Peisch & Ford in Boston.
Before Ouwinga, a law firm generally could be held liable to non-clients only if it were reasonably foreseeable that a third party would rely on its opinions, Peisch said.

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​BOSTON—A Connecticut man who victimized exchangors in Massachusetts was sentenced yesterday for his role in a mail and wire fraud scheme involving a tax-free property exchange business.

Daniel E. Carpenter, 59, of Simsbury, Connecticut, was sentenced by U.S. District Court Judge George A. O’Toole to 36 months in prison, three years of supervised release, and a $100,000 fine. In June 2008, Carpenter was convicted of 19 counts of mail and wire fraud following a 13-day jury trial.

Carpenter was charged with mail and wire fraud in connection with his handling of money entrusted to him by clients who engaged in tax-deferred real estate exchange transactions from August to December 2000. Under the relevant federal tax code provision, sellers of investment real estate were permitted to defer capital gains taxes on sale proceeds, provided they purchased a like property within six months and did not take possession of the sale proceeds during the interim. Carpenter owned a company, Benistar, which acted as an intermediary for these exchanges, holding clients’ money pursuant to escrow agreements until they purchased a replacement property. Carpenter, through Benistar, marketed his services as a qualified intermediary using materially false and misleading statements in marketing materials and contracts. 

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Connecticut Man Sentenced in Connection with Tax-Free Property Exchange Business - fbi.gov

First Circuit Reverses District Court Order Granting New Trial - crimeinthesuites.com

​Appellate courts do not often reverse a trial judge’s decision to grant a new trial, so we took notice when the First Circuit did so in United States v. Carpenter.  Given the case history, the First Circuit decision should help to answer an important question:  How much leeway do prosecutors have when summarizing evidence in closing arguments?

In 2005, a jury convicted Daniel Carpenter on nineteen counts of wire and mail fraud.  The charges pertained to Carpenter’s operation of Benistar, a company that handled “like kind” exchanges for owners of investment property.  Under federal law, investors may defer capital gains on the sale of investment property if they exchange it for another property of like kind.  In order to qualify, the seller or “exchangor” must complete the exchange within 180 days of the initial sale and must not take possession of sale proceeds in the interim.  To meet the requirements, exchangors usually rely on a qualified intermediary to hold the exchange funds until they are reinvested.  Benistar’s business as a qualified intermediary gave rise to the charges against Carpenter.

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