Investment Advisor Sentenced in Fraud that Added To NC Mutual’s Troubles

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Federal prosecutors have said that Bradley Reifler, a New York-based investment manager, contributed greatly to the demise of North Carolina Mutual Life Insurance Co., the oldest black-owned insurance company in the United States.

Last week, a judge sentenced Reifler to five years in prison for his role in bilking the insurer out of an estimated $34 million.

U.S. District Judge Catherine Eagles said that Reifler had abused the trust that NC Mutual had placed in him, by misappropriating funds that were intended to go toward reinsurance for the 125-year-old insurer, according to court records and local news reports. As a result of Reifler’s schemes, prosecutors said, NC Mutual was able to recoup only a portion of the money it lost and was unable to pay some of its claims.

Reifler signed a plea agreement in 2021, pleading guilty to one count of wire fraud. He could have received more than 20 years in prison under federal sentencing guidelines, the plea agreement shows.

The sentencing is the latest in the saga of NC Mutual, which in October was placed into receivership and will soon be liquidated. The company began in 1898, providing burial insurance for African Americans. It later became one of the largest black-owned life insurance companies and a powerhouse business in the region. The firm and its high-rise office building became emblematic of what was known as the Black Wall Street, in Durham, North Carolina.

Reifler (

The firm was largely a life insurance carrier, but it also owned a regional insurance agency and brokerage that sold property/casualty, health and other insurance products, according to the company’s website.

By the late 2010s, the company had run into trouble. Reports have said that the firm failed to keep up with technology, customer service and growth opportunities, and later was crippled by the misappropriation. North Carolina’s insurance commissioner asked that the firm be placed into rehabilitation in 2018, but the financial picture did not improve.

Reifler and his investment firms were factors in the deterioration, said North Carolina Insurance Commissioner Mike Causey.

“For over 125 years, NC Mutual weathered countless storms, but it could not survive Mr. Reifler’s fraud,” Causey said in a statement Friday. “His crimes left the company in a dire financial condition, and proved to be the death nail for NC Mutual.”

The 2020 indictment of Reifler outlined the alleged fraud. In 2015, NC Mutual ceded some $34 million in premium to a reinsurance company, unnamed in the indictment. About the same time, Reifler’s Stamford Brook Capital entered into an agreement to be the investment advisor for the reinsurance firm. The court document did not explain how Reifler’s firm came to be the advisor.

To protect the mutual company’s assets, restrictions were placed on investments, requiring them to meet North Carolina insurance statutes and to have a favorable rating from the National Association of Insurance Commissioners. Instead of following the guidelines, Reifler used the millions to repay other investors, to pay overhead at his other firm, Forefront Capital Holdings, and to invest in high-risk “junk” securities and in self-dealing investments, the indictment said.

In 2016, the state Department of Insurance ran a routine audit of NC Mutual’s finances and found some issues. To cover his tracks, Reifler provided falsified documents to create the appearance that his investments complied with the restrictions, prosecutors said.

A photo from NC Mutual archives (NC Mutual)

As a result of Reifler’s fraudulent scheme, NC Mutual “was unable to recoup most of the trust assets; was instead left with low-grade, illiquid securities in their investment portfolio; suffered substantial financial losses; and was placed in rehabilitation,” a court document reads.

Reifler has said that he was not fully aware of the investment restrictions, and that he felt he was making good investments with the insurance money, according to the Triangle Business Journal. His lawyer has said that the man did not intend to enrich himself but was using the money in part to buy time to save his companies.

The implosion of NC Mutual and Reifler’s actions will be felt for some time to come, said Causey, who submitted a statement to the court ahead of the sentencing, about the impact on victims.

“The economic consequences of his actions will be felt by state guaranty associations, other insurance companies, and, ultimately, taxpayers,” Causey said. “Innocent people are left to pick up the tab, but we will work to ensure NC Mutual’s policyholders’ claims are appropriately settled.”

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