Associated Press Writer © 2010 The Associated Press

Sept. 9, 2010, 3:46PM

http://www.chron.com/disp/story.mpl/ap/tx/7193542.html

RICHMOND, Va. — Three Texas businessmen defrauded hundreds of investors out of more than $100 million and used much of the money to finance their lavish personal lifestyles, federal authorities said Thursday.

Neil MacBride, U.S. attorney for the Eastern District of Virginia, said at a news conference that investors — including many elderly people — lost their life savings in a scam that claimed more than 800 victims in 37 states and Canada.

The prosecutor, joined by other federal officials, made the remarks after a federal grand jury in Richmond indicted the three men on charges of mail fraud, money laundering, conspiracy and securities fraud. The 18-count indictment unsealed Thursday lists the defendants as Christian M. Allmendinger, 39, of Houston; Adley H. Abdulwahab, 35, of Spring, Texas; and David C. White, 40, of Missouri City, Texas.

Attorneys for White did not immediately return a telephone message seeking comment. Court records did not yet list attorneys for Allmendinger and Abdulwahab.

The men were principals in A&O Life Funds and other companies, which bought life insurance policies from insured people at less than face value and then collected the benefits when those people died. The indictment says the defendants illegally portrayed investments in their company as risk-free and guaranteed double-digit returns.

"Instead of setting the money aside for investors, the defendants used tens of millions of dollars to fund their luxury lifestyles," MacBride said.

The government is seeking forfeiture of $103 million, along with luxury goods it claims were purchased with proceeds of the scam: a 2006 Lamborghini Gallardo Spyder, a 2008 Porsche Cayenne SUV, a 2008 Bentley Flying Spur, diamond rings and earrings, a Steinway grand piano and other items.

According to the indictment, the defendants misrepresented many aspects of their business, including its size and prior success, and created sham companies to try to conceal their activities after state regulators became suspicious.

MacBride said an investigation by the Virginia Financial and Securities Fraud Task Force, a new partnership between criminal investigators and civil regulators, led to the indictment. The state group is an arm of a national task force established by President Barack Obama to crack down on financial crimes.

The case was filed in Richmond because dozens of alleged victims and an A&O salesman live in the area, MacBride said. The salesman, 69-year-old Tomme Bromseth of Blackstone, Va., is among four people who were charged separately for their roles in the A&O scheme. The others are Russell E. Mackert, 51, of Spring, Texas; Eric M. Kurz, 46, of The Woodlands, Texas; and Brent Oncale, 36, of Houston.

Plea agreements for those four have been filed in U.S. District Court in Richmond, but hearings have not been scheduled.

It was unclear when the three men who were indicted would make their first court appearances in Richmond.