Terry McAuliffe's name popped up today on a list of investors who bought annuities from a Rhode Island businessman who pleaded guilty in 2012 to stealing the identities of terminally ill patients.
The convicted businessman, Joseph Caramadre, was also a donor to McAuliffe's failed 2009 bid for the Democratic nomination for governor of Virginia. Caramadre donated more than $26 thousand to McAuliffe and hosted a fundraiser for the candidate.
According to our NBC affiliate in Providence WJAR, there is no evidence that McAuliffe or the other investors, who include a noted bookie with mob ties and a Catholic priest in charge of financial planning for the Roman Catholic Diocese of Providence, had any knowledge that Caramadre was taking advantage of the patients on their death beds.
Caramadre stole the identities of the patients and then used them to apply for annuities and bonds. According to WJAR, he is accused of defrauding insurance companies between $37 million and $48 million.
McAuliffe's campaign was quick to distance the candidate from the report. They claim that while he had invested in the annuities he knew nothing about Caramdre's fraudulent activity.
"Terry was one of hundreds of passive investors several years ago and had no idea about the allegations against the defendant - who, at the time, was widely respected by business leaders and elected officials," said spokesman Josh Schwerin. "The allegations are horrible and he never would have invested if he knew he was being deceived."
Schwerin said that McAuliffe and his campaign would donate the equivalent of the campaign donations from Camardre to the American Cancer Society. $27 thousand from the campaign. $47 thousand from the candidate himself. The $27 thousand was to return campaign contributions. The $47 thousand was for the investment into Caramadre's business venture.
McAuliffe's opponent Ken Cuccinelli's campaign was quick to pounce on the news as another example of the candidate closely associated with questionable financial activity. Senior Adviser Chris LaCivita predicted that McAuliffe would claim to have no knowledge of what his associate was up to.
“There is no question that this is a deeply troubling story, and what it reveals most of all is yet another glaring example of Terry McAuliffe doing business with highly dubious individuals, said LaCivita. "We’ve seen this movie before."
The Cuccinelli campaign once again reiterated their call for McAuliffe to release his full taxe returns.
"It’s becoming clearer by the day why Terry McAuliffe has steadfastly refused to release his tax returns to the public. This is not the kind of behavior or judgment worthy of Virginia’s highest office,” said LaCivita.
Republicans also pointed out that McAuliffe waited until his name was publicly revealed to give back the money.
"It's very interesting that Terry McAuliffe's decided to make his donation today, in October 2013...Caramadre, plead guilty to these charges nearly a year ago, in November 2012," said RPV Chairman Pat Mullins. "Terry only decided to give the money to charity only when Mr. Caramadre's client list was released to the public for the first time. It's not that Terry was upset that he was involved with something like this — he was upset that it became public."
Late Wednesday evening, the Associated Press incorrectly interpreted court documents to determine that McAuliffe lied to postal inspector investigating the RI death benefits scam.
Shortly after the story posted here and in several media outlets across the country, the McAuliffe campaign contacted NBC12 to refute the story.
Here is their statement:
"The person referenced on page 68 is absolutely not Terry McAuliffe since he was a passive investor and did none of the things referenced: First, he was not interviewed by law enforcement on April 20, 2010; rather, he was in Richmond for a day of meetings," said Schwerin. "Second, he was never involved in the referral of any annuitants to Mr. Caramadre, ever.
"When an investigator contacted Terry briefly by phone, as he said he was doing with other investors, Terry answered a few questions and never heard from him again."
The AP story- which was posted originally on prior versions of this story has been taken down. The AP retracted their story at 11:24 pm Wednesday.
Here is the full blow by blow of what happened Wednesday night, including a response from the AP from Poynter.