The company sold interests in death benefits from life insurance policies and “engaged in fraud” by selling unregistered securities, according to a June 27 ruling by Travis County District Court Judge Gisela D. Triana.
Triana ruled that HCF’s product was a security according to state law. HCF was ordered to pay $3.9 million in restitution to people who bought the securities. There is no timetable for the distribution at this time.
HCF was one of two life settlement companies controlled by Richard H. “Dick” Gray of New Braunfels. Both were shut down in 2010 at the request of the Texas State Securities Board.
Judge Triana ruled in February that Retirement Value had also engaged in fraud in selling unregistered securities in violation of the Texas Securities Act. Both companies sold investments based on proceeds of death benefits from policies sold by life settlement companies.