Judge's ruling expected on dead man's life insurance

2nd May, 2008

A Butler County judge Thursday, May 2, will consider a preliminary injunction request that would prohibit the payout of millions in life insurance policies to the family of a Hanover Twp. man found dead in Indiana last month. The request is being made by the Butler County Prosecutor's Office amid allegations the premiums may have been paid with money gained by illegal activity.

David Colwell, 57, of Stillwell Road, was found dead March 4 on a bridge crossing the Brookville Reservoir. The Franklin County, Ind., Coroner's Office has not officially ruled the death a suicide, but said last month foul play is not suspected in the shooting death of Colwell, who was killed by a single gunshot to the head.

At the time of his death, Colwell had been acting as an "investment adviser" for a number of years, but had not been licensed for the sale of securities since about 2002, when his license was surrendered in relation to various securities fraud issues, according to court documents filed by Assistant Butler County Prosecutor Dan Ferguson.

Colwell was in considerable financial trouble, including foreclosure on his properties and delinquent taxes, but he was able to keep the premiums paid on life insurance policies worth $250,000, $500,00 and $1,500,000, court documents say. The prosecutor's office alleges Colwell's source of funds for the payment of premiums was illegal activity in the form of the sale of unregistered securities.

During a hearing last month, Ferguson said a search warrant executed at the Colwell residence turned up evidence of a fourth life insurance policy that he also will seek to freeze. According to Butler County Court records, Colwell's computer and miscellaneous financial and tax documents were taken from the residence and his office. The hearing will begin at 9 a.m. before Butler County Common Pleas Judge Charles Pater.

Source : http://www.journal-news.com/