By LARRY O'DELLAssociated Press
RICHMOND, Va. (AP) - A judge sentenced a former Costa Rican businessman and professional soccer team owner to 60 years in prison Tuesday after hearing heart-wrenching and often tearful testimony from victims of his $485 million insurance fraud scheme.
The sentence handed down by U.S. District Judge John A. Gibney Jr. ensures that Minor Vargas Calvo, 61, will spend the rest of his life in prison - the goal sought by federal prosecutors. Vargas told the judge the 644 days he has spent in custody have been enough to teach him a lesson.
"I can assure you I am not the monster the government or the witnesses present here," Vargas said in a rambling and unapologetic statement. "I do not deserve any additional jail time because I am completely rehabilitated."
Vargas, president of Provident Capital Indemnity Ltd, was convicted in April on 10 fraud and money laundering counts in a scam prosecutors said claimed thousands of victims worldwide.
Provident sold bonds guaranteeing funding for life settlement firms, which buy life insurance policies from insured people at less than face value and collect benefits when those people die. The bonds were sold based on fraudulent financial statements and were not protected by reinsurance agreements with major companies, as Vargas had claimed. As a result, many investors lost their life savings.
Among them was Paula Whitaker of Magnolia, Texas, a counselor and retired teacher who lost $1 million she saved by working as many as three jobs at a time. She wept as she told the judge how the scam left her unable to fund a charitable organization in memory of her son, whose death at 25 ended his dream of becoming a nurse.
"I had planned and worked for 40 years," said Whitaker, who placed a framed photo of her son on the witness stand for Vargas to see. "I did all the right things. In seconds all of it was gone, like a tornado coming through."
Therese Giger of Naperville, Ill., also displayed a family photo while she described her husband's anguish over losing their $500,000 nest egg as he was being treated for the cancer that ultimately claimed his life.
"What's sad is he died thinking and believing it was his fault," Giger said, fighting back tears. "He was not only robbed of his money, but in his darkest hour was robbed of his peace of mind. All I have left of our half a million dollars is a broken heart, a worthless piece of paper and shattered dreams."
Vargas told the judge that he "came to PCI to save the company" and that he invested most of the firm's revenue in soccer and social programs to keep kids off alcohol and drugs. He also suggested there should be more education about financial fraud.
"You're giving these people an education, there's no question about that," Gibney said.
Vargas' attorney, Jeffrey Everhart, asked Gibney to impose a sentence of about 20 years, saying it would be commensurate with sentences given in many other white-collar crimes. But the judge agreed with federal prosecutors that he needed to send a message that serious financial crimes will result in "more than a slap on the wrist."
The 60-year sentence equals the term given to Adley Abdulwahab of Spring, Texas, who worked for a life settlement company called A&O that did business with Provident. Another A&O principal was sentenced to 45 years, and five other conspirators have received shorter sentences. An accountant convicted of conducting a phony audit for Provident will be sentenced next month.
Giger and Whitaker said they were satisfied with Vargas' sentence because it means he will never be free to harm anyone else.
"Does it help me? No," Whitaker said. "But I've got a life sentence because of what he did, and at least he has the same sentence."
A half-dozen Vargas supporters, including a son and two daughters, sat three rows behind him during the sentencing.
"It's so sad," said the son, Rolando Vargas, outside the courtroom. "We really love our father. He was involved in a situation he lost control. We just keep praying to God. Our family will be strong in support of our father."
The Provident and A&O cases were brought in Virginia because that's where some of the victims and transactions were located.
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