PROVIDENCE, R.I. — A former lawyer who masterminded a $46 million investment scheme exploiting terminally ill people is fighting the government’s attempt to recover some of the money he’s been ordered to pay back.

Joseph Caramadre, who’s serving time in a federal prison in Massachusetts, appeared in U.S. District Court in Providence via videoconference on Thursday. He was ordered in 2014 to pay $46 million restitution to companies that lost money in the scheme.

The government said in a court filing last year that Caramadre had paid back just $4,717.69 of that amount. Acting U.S. Attorney Stephen Dambruch said Thursday his office could not disclose whether any other payments had been made.

Caramadre told the judge on Thursday that the government does not have the right to garnish several insurance and annuity accounts in his name. Among the reasons he gave was that he has been ordered to pay alimony to his wife under the terms of an initial divorce decree.

One of the accounts at issue is a $600,000 life insurance policy on his father, into which Caramadre said he and his siblings had paid $500,000 in premiums. He said garnishing the account would be a “gross injustice” to his siblings.

Caramadre maintained that the accounts would have little value if the government cashed them in.

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Assistant U.S. Attorney Mary Rogers pushed back, saying Caramadre provided nothing to substantiate his claims.

“The gist of his argument seems to be, ‘You’re not going to make much, and my family needs it,’ ” Rogers said.

As part of the scheme, Caramadre would take out bonds and annuities with personal information of terminally ill people, then collect when they died. Among the investors were Terry McAuliffe, now governor of Virginia, and U.S. Rep. Jim Langevin. There is no evidence that either man knew it was illegal. Both later donated the money to charity.

Caramadre pleaded guilty to wire fraud and conspiracy in 2013, but then renounced his plea and tried unsuccessfully to take it back, saying he was innocent and had received an inadequate defense.

He was sentenced to six years in prison. He said in court Thursday that he expected to be out in four-and-a-half months.

The judge did not issue a ruling, but said he would make a decision after getting more information, including about Caramadre’s soon-to-be-ex-wife and her right to any money.


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