Last week, a Dallas County grand jury returned 39 indictments against 32 people in an alleged $2.7 million viatical fraud scheme -- the result of a state investigation triggered by a Houston Press article.
The Texas Department of Insurance began its investigation after the Press article ["Making a Killing," by Steve McVicker, October 22, 1998] revealed to them that a paroled capital murderer from Houston had surfaced in Dallas as an executive of Southwest Viatical. The viatical company buys the insurance policies of terminally ill people -- usually those with AIDS or HIV -- for a fraction of their value, then collects the full coverage amount when they die.
One of the defendants is Michael Lee Davis, 45, who changed his name from Walter Waldhauser Jr. after he was convicted as the middleman in four insurance-related killings in the 1970s.
Grand jurors returned felony indictments alleging he committed fraud by recruiting AIDS or HIV patients to take out life insurance policies while claiming that they were not infected with the disease. Other indictments accuse three insurance agents of participating in the scheme, and 28 men were indicted for allegedly failing to disclose their illnesses to insurers.
Waldhauser/Davis, who is believed to have masterminded the scheme, remains at large.
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-- Steve McVicker