- 5 -
In similar transactions, Stable has never been repaid or demanded
repayment from the makers of the notes.
Charles Sutter allowed the Royal policy to lapse, as was his
option. From the outset, he never intended to maintain the
original coverage that the Royal policy provided. He never paid
any other premiums on the policy, nor did he ever make any
payments on the note. No demand for payment was ever made by
Stable.
As the selling agent, Marvin Schwab was entitled to a
commission from Royal equal to 117 percent of the first-year
premium on the Royal policy. Consistent with its practice, Royal
paid the commission to Marvin Schwab within days after the Royal
policy was purchased.
During the relevant period and under similar circumstances,
the Daniel Schwab Agency sold 120 life insurance policies similar
to the Royal policy. The Schwabs were paid substantial
commissions by Royal upon the sales of the Royal policy and the
similar policies. Upon learning about the similar transactions,
officials from the Wyoming Insurance Department interviewed
Daniel Schwab. During the interview Daniel Schwab represented
that notes similar to the one described above were necessary in
the event that the Internal Revenue Service questioned the
Federal income tax consequences of the transactions.
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 Next
Last modified: May 25, 2011