By CANDIA DAMES, Guardian News Editor

Claiming that several U.S. firms sought to defraud him of a $10 million life insurance policy, former Governor General Sir Orville Turnquest has taken legal action in the United States.

Sir Orville has asked a U.S. court to rescind the insurance policy issued on his life more than two years ago and held by Sir Orville Turnquest Irrevocable Insurance Trust. He contends that the insurance policy was not validly issued and is void as an illegal wagering contract in violation of the laws of the State of Florida.

"What Sir Orville is seeking is just simply to invalidate the life insurance policy and put everybody back where they started," his lawyer, Peter Mineo Jr., told The Nassau Guardian from Fort Lauderdale yesterday.

Sir Orville has sued LaSalle Bank National Association and Coventry Capital I, LLC, as well as Boundless Solutions, Inc. — a Florida corporation — for "breach of agreement, misrepresentation and conversion".

The former governor general filed action earlier in the year, but a U.S. District Court judge just days ago ordered arbitration in the matter.

The action filed on behalf of Sir Orville notes that Florida law provides that for a life insurance policy to be valid, the owner of the policy in question must have an insurable interest in the life of the proposed insured.

During early 2006, Boundless Solutions, Inc., which was then known as Financial Profiles, approached Sir Orville, saying it would obtain free insurance for a period of at least two years on his life, according to court documents obtained by The Guardian.

"Moreover, it was represented for purposes of inducing Sir Orville Turnquest into entering this transaction that this policy would be a vehicle whereby Sir Orville Turnquest could market his insurability in a way that would obtain for him a substantial profit," says the action that was filed.

"In truth and in fact, the transaction in question was not as represented but was rather a scheme by which LaSalle Bank National Association, Coventry Capital I, LLC and Boundless Solutions, Inc. could obtain large fees and in the process convert to their own the insurability of Sir Orville Turnquest and, ultimately, end up with a substantial policy in an amount exceeding $10 million on the life of Sir Orville Turnquest by circumventing the laws relating to insurable interests as well as the public policy of the State of Florida."

The Sir Orville Turnquest Irrevocable Insurance Trust borrowed $1.5 million from LaSalle Bank to pay the annual premiums. The loan was secured by the policy itself. But Sir Orville contends that was a "sham transaction". Court documents explain the purpose of the funds was to advance to PHL Variable Insurance Company the premium necessary to keep the policy in question in force for two years. It also covered other fees associated with the transaction. PHL is also listed as a defendant in the matter.

"By having the right to veto the sale of the policy to a third party at the point of maturity, these defendants have eliminated [Sir Orville's] ability to market the policy as [his]," the complaint says.

"In fact, the defendant, Coventry Capital I, LLC and its related entities have been consistently involved in anti-competitive and fraudulent practices in the market for resale of policies such as these." It says the assignment of the life insurance policy was executed by Dulaw Management Limited, a company incorporated in The Bahamas, as successor trustee of the Sir Orville Turnquest Irrevocable Insurance Trust, which is domiciled in Florida.

According to court documents, the assignment purports to give the defendant, Lasalle Bank National Association, the right to "foreclose" on the policy should there be a default on the note and security agreement.

"The gist of this transaction is that Coventry Capital I, LLC, and LaSalle Bank National Association put up the money for the policy in question, remain in full and complete control of the policy, and preclude the plaintiff from selling the policy. Under these circumstances, it is clear that the policy is invalid because it is a wagering contract," the complaint says.

"Included in this transaction are a number of factors which traditionally invalidate the assignment of the life insurance policy and the transaction bears the hallmarks of an illegal wagering contract that does nothing other than circumvent the laws with regard to insurable interest."

According to the complaint, "As a direct and proximate result of this breach of contract, the plaintiff (Dulaw Management Limited, successor trustee of the Sir Orville Turnquest Irrevocable Insurance Trust) has been damaged in that it has had taken from it a policy of insurance which has a market value substantially in excess of $1.5 million.

"Moreover, this action on the part of Coventry Capital I, LLC and LaSalle Bank National Association constitutes civil theft of this policy of insurance from the plaintiff..."

In its defense, PHL Variable Insurance Company denies that it was involved in any alleged scheme intended to circumvent the laws of the State of Florida with regards to insurable interest. It denies that it was involved in or consented to any alleged proposal to provide "free insurance" on Sir Orville's life, or market his insurability. But in fact, Sir Orville does not make that allegation.

The insurance company admits that it did receive a designation of order form and recorded a change of ownership from the Sir Orville Turnquest Irrevocable Insurance Trust to LaSalle Bank NA on or about July 23, 2008.

Defendants LaSalle Bank and Coventry Capital I, LLC recently moved to compel arbitration on the breach of contract and misrepresentation claims. They have moved to stay Sir Orville's claim to rescind the life insurance policy pending the resolution of the arbitration.

Noting that the Federal Arbitration Act embodies "the strong federal policy in favor of enforcing arbitration agreements", United States District Court Judge Federico A. Moreno ordered arbitration relating to the breach of contract and misrepresentation claims against LaSalle Bank and Coventry Capital I, LLC.