Image by Vernon Yuen / NurPhoto via Getty / Futurism

In a new lawsuit filed in Delaware, the equity firm Apollo Global Management Inc has been accused of "carrying out a widespread fraudulent human life wagering conspiracy."

Translation: the company was, as the estate of one alleged victim claims, taking out life insurance policies against the lives of the elderly in hopes that they'd die soon and they could collect big — and, as the suit details, going out of its way to hide it, too.

This scheme, as the estate of the late Martha Barotz details, was "designed to not only hide its involvement, but to create the false appearance that the policies it owns are somehow legitimate."

As the Financial Times explains in its reporting on the suit, the Barotz case goes all the way back to 2006, when the then-70-something woman allowed a company called Life Accumulation Trust III to take out a policy in her name. In exchange, she was given $150,000, or three percent of the policy's multi-million dollar total benefits — and, as her son Nathan alleges in his years-long legal campaign, signed away the rest to strangers with his mother none the wiser.

Known as "stranger-originated life insurance," or STOLI, this broadly illegal practice involves involves investors taking out policies in someone else's name, allegedly to help increase the death benefits because the person insured doesn't have many assets of their own.

Often marketed as "zero premium life insurance" or "estate maximization plans" because policy owners pay premiums on policies, this predatory, unethical, and illegal practice is especially dangerous for the elderly, who can be easily manipulated into signing onto such plans without reading the fine print.

"In this way, the senior citizens have no idea who owns a policy on their life, and who wants them dead,” the Barotz suit maintains. "This is precisely what happened with the policy here."

Despite their illegality, STOLI policies were, as the FT notes, very popular in the mid-to-late 2000s, and companies circumvented the laws banning it by having people create trusts and sign control of them. All the same, any policy owned by someone unrelated to the deceased in question can be considered void, which is what the Barotz family has been trying to do for years now.

After Barotz initially signed on with Life Accumulation, her policy was later sold to a fund that is, as the suit alleges, controlled by Apollo. She passed away in 2018, and the $5 million lump sum from her policy was sent to that fund.

Ultimately, the estate was successful in its bid and in January won its case before the Superior Court of Delaware — where Apollo, like millions of other companies, is registered — that ordered a payout of $6.9 million for damages.

This latest complaint, however, argues that Apollo tried to circumvent the court's judgment by liquidating the shell firms that would make the payouts in an effort to make it seem like it couldn't pay.

Apollo, on its end, denied wrongdoing to the FT and said that what the suit describes is "a gross mischaracterization, disingenuous, and flat out wrong."

It's hard to deny something a judge has already ruled to be true, but when you're playing around with people's lives and money, boldness apparently comes with the territory.

Updated to correct the lump sum from Barotz' policy.

More on legal trouble: Tesla's Autopilot and FSD Linked to Hundreds of Crashes, Many Fatal

Share This Article