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Tomisue Hilbert investigates mother's death, $15M insurance policy

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Tomisue Hilbert, wife of Indianapolis businessman Steve Hilbert, is working with a team of attorneys to determine whether her deceased mother’s estate can claim the benefit of a $15 million life insurance policy issued by Houston-based American General Life Insurance Co.

On April 12, The Wall Street Journal published a story on its front page about the legal dispute over Germaine “Suzy” Tomlinson’s policy. IBJ broke the story about Tomlinson—Tomisue Hilbert’s mother—in January 2009. The civil lawsuit is set for a jury trial in October.

“The more we learn, the more concerns we have, and therefore we are continuing to investigate every angle of this situation,” Tomisue Hilbert said in a written statement.

In the legal quarrel, AIG is attempting to invalidate a $15 million policy it issued in January 2006 insuring the life of Tomlinson, who died Sept. 28, 2008, at the age of 74. AIG alleges the policy was part of a stranger-originated life insurance, or STOLI scheme.

In a STOLI scheme, outside investors effectively wager on when an insured person will die. In a typical transaction, an investor entices someone, usually a senior citizen, to take out a multimillion-dollar life insurance policy. Investors purchase the policy and pay the premiums, making themselves the beneficiaries. In return, the insured person receives an upfront cut of the eventual death payout.

Under the arrangement, the sooner the insured person dies, the better the return for investors.

“Imagine how difficult it is to learn of the sudden death of your mother, accompanied by very unusual circumstances,” Tomisue Hilbert wrote. “Germaine “Suzy” Tomlinson was a healthy, active and vibrant woman with a busy and fulfilling life. She was a loving mother and grandmother who was a daily part of our family.”

“When we were called to her home, we found broken glass, and she was fully clothed, face-down in her bathtub, drowned. After a brief investigation by the authorities, it seemed this was a tragic accident. Then months later we learn there was a $15 million insurance policy on her life payable to someone other than a family member.”

The initial defendants in the Tomlinson case were J.B. Carlson, owner of the locally based Carlson Media Group; Nevada insurance broker Geoffrey A. Vanderpal; and Delaware-based Wilmington Trust Co.

Carlson said Tomlinson served as vice chairwoman and a director of his company, which paid annual premiums of $387,274.85 on the policy. As trustee, Carlson said he’s entitled to the $15 million.

In court documents, Carlson has alleged Tomlinson began attending Carlson Media Group board meetings in November 2002, making the $15 million policy “Key Man” insurance. The WSJ reported that Carlson was the last person to see Tomlinson alive.

“This insurance is supposedly based on my mother’s position with a company we haven’t really been able to learn much about,” Tomisue Hilbert wrote. “Ironically, one of the persons involved was the last person with my mother that fateful evening. There were loans against the policy that were due within days of my mother’s death.”

IBJ originally alerted Hilbert and the Indiana Department of Insurance about AIG’s lawsuit in January 2009. Hilbert, who wasn’t previously aware of the suit, initially feared foul play, but the Indianapolis Metropolitan Police Department ruled the death an accidental bathtub drowning. The Marion County Coroner’s Office listed Tomlinson’s cause of death as asphyxia by drowning with acute ethanol intoxication as a contributing cause.

Tomisue Hilbert last summer became an intervenor defendant in the insurance tussle, arguing that AIG should not invalidate the $15 million policy. Instead, Tomisue Hilbert argues its proceeds should go to Tomlinson’s five adult children.

“My mother always wanted to take care of her family and frequently talked to me about how she had taken care of things for her children and grandchildren,” Tomisue Hilbert wrote.

“The insurance application shows my mother intended to benefit her family,” Hilbert continued. “My mother was not a sophisticated businessperson, and this situation shows the danger of allowing large insurance policies to be written on the lives of elderly people who may not fully understand what is going on.”•

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