American National Seeks to Void a Life Insurance Policy Over Alleged Fraud

"The defendant does not have and did not have an insurable interest in the life of the insured," according to American National. "Defendant sought the policy for her own personal financial gain. The policy was procured at the request of the defendant, with the agreement that the policy would be controlled by, paid for, and ultimately transferred to defendant after it was procured, for the benefit and personal gain of the defendant, in an effort to evade the rule against wagering contracts. Based on the foregoing, the policy is a wagering contract."

American National is a Galveston, Texas-based company that was acquired by Brookfield in May 2022.

Murphy Village

American National noted in its new complaint against Cathy Sherlock that it knows about concerns about Sherlock's insurance policy because of an FBI investigation that led to convictions of 51 residents of Murphy Village — a community in North Augusta, South Carolina — who identify themselves as members of the Irish Traveler community.

The FBI "investigated racketeering and various forms of mail fraud, wire fraud, government benefits fraud, life insurance fraud, and other financial crimes among certain Irish Travelers living in Murphy Village, and persons affiliated with them," according to the complaint.

One component of the conspiracy involved the purchase of "thousands of life insurance policies fraudulently procured from various insurance companies" that could pay $535 million in death benefits, American National said.

Irish Travelers are descended from a group of people with disputed origins that lived in Ireland. The European Union Agency for Fundamental Rights has found them to be a target of ethnic discrimination.

In connection with the 2022 case involving Sherlock and American National, Peil asked for the court to dismiss the case, based on arguments that any errors or misrepresentation had occurred years earlier, and that American National had suffered no injury because it had collected premiums for years and had paid out no death benefits.

Peil also asked the court, in pleadings related to a co-defendant, Mary Harrison, to strike portions of the complaint related to Murphy Village and Irish Travelers.

The references to Irish Travelers serve no legitimate purpose in pleading the insurer's claims, according to a memorandum on behalf of Harrison.

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