A US businessman based in Connecticut who died last year in a suspicious plane crash allegedly used letters of credit (L/Cs) to swindle senior citizens out of millions of US dollars.

The allegations apparently reflect the suspicions of US officials and the daughter of the pilot who died in the crashed plane in which the alleged L/C fraudster, Michael Kielty, was the only passenger.

Debts

At the time of the crash 40-year-old Keilty was apparently heavily in debt and under pressure to pay back millions of US dollars he allegedly swindled from several people, most of whom are senior citizens.

"He was penniless when he died," US attorney Gerard McEnery told a Connecticut paper.

Suspicions

Kathy Leonzi, the daughter of the pilot killed when his plane crashed, Milton Marshall, told the same paper that she believes the crash was no accident and she suspects foul play.

McEnery and other attorneys meanwhile suspect Keilty was involved in investment scams with a local lawyer, Henry Elstein.

In this regard, McEnery filed a legal malpractice lawsuit against Elstein that claims Keilty received loans totalling US$160,000 from Doris Kerrigan, an elderly woman, at Elstein's request. Keilty and Kerrigan were both clients of Elstein.

More lawsuits

Two other lawsuits alleging legal malpractice by Elstein have recently been filed in US courts that claim that Elstein encouraged his clients to lend money to Keilty, in exchange for L/Cs that turned out to be forgeries.

Lawyers involved in the case say the fraud victims, all of whom were long time friends of Elstein's, were conned out of around US$2 million.

The scam

In this scam, lawyers allege that Keilty convinced Elstein that he had invented a machine that could check driver's licenses to see if they were legitimate, and that investing in this machine could be lucrative for investors.

Elstein agreed to take money from his clients to give to Keilty. In return the clients were given an L/C or on some occasions a promissory note and promised returns of around 18 per cent on their investments. Whenever the notes became due, Keilty would ask for more time to pay them back.

It only emerged that the L/Cs and the notes were fraudulent after the plane crash.

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