Fraternal Club Settles Scam Suit
The Sons of Norway fraternal group has reached a preliminary settlement in a class-action lawsuit filed after its best insurance agent admitted bilking hundreds of elderly people out of $9 million.
The organization reached the settlement in late June, according to documents in U.S. District Court in Seattle. Lee Rowe, chief executive officer of the Minneapolis-based group, said the financial settlement amounts to $4.32 million.
That means the victims, some of whom lost much of their life’s savings, would likely get 50 to 70 cents on the dollar, lawyers involved in the lawsuit said.
Mike Calozza, Sons of Norway’s largest-selling salesman nationally, told his customers he would put their money in a high-return, tax-free investment. The investment did not exist.
Calozza pleaded guilty to 11 charges of fraud and money laundering in U.S. District Court in Seattle and is scheduled to be sentenced in November.
Federal prosecutors found 235 people who turned over more than $8 million to Calozza between 1985 and Sept. 20, 1994. Most of them lived in the Northwest.
Calozza made payments of $2.3 million on promissory notes held by some of those people, paying earlier investors with money given to him by later ones.
Calozza also forged applications for loans on insurance policies, then used the loan checks for his own purposes.
He apparently used the rest of the money on a lavish lifestyle.
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