Top UM booster John Ruiz’s company LifeWallet confirms SEC probe, grand jury subpoena

In a filing Tuesday with the U.S. Securities and Exchange Commission, the health insurance claims company led by University of Miami athletics booster and lawyer John H. Ruiz admitted that it is facing federal civil and criminal investigations.

LifeWallet, which formed last year as publicly traded company known as MSP Recovery, said that the SEC initiated an investigation into the company in August 2022 and that it received an agency subpoena for corporate records this year.

The Coral Gables-based company also said it received a subpoena from the U.S. Attorney’s Office in connection with a grand jury investigation in the Southern District of Florida.

The revelations follow reporting by the Miami Herald on Sunday that the company is under civil investigation by the SEC related to what Ruiz told investors about its value, and that Ruiz and the company are under criminal investigation by the U.S. Attorney’s Office for the Southern District of Florida related to representations made to investors and spending practices.

When asked about these investigations last week, Ruiz’s attorney, Gonzalo Dorta, said the company had “no information indicating that Mr. Ruiz or anyone at the company is a target of federal, civil, or criminal investigations for securities violations, anti-fraud violations, wire fraud or money laundering.”

In its Aug. 1 filing, LifeWallet told the SEC that neither the company nor Ruiz has yet gotten a “target letter” from the U.S. Department of Justice confirming that they are the targets of the U.S. Attorney’s investigation — though experts say that doesn’t mean they are not the target of an investigation.

Miami defense attorney David Weinstein, a former chief of the narcotics and public corruption sections at the U.S. Attorney’s Office, said a “target letter” has been a hot topic of conversation of late because former President Donald Trump received a couple of them from the Justice Department’s special counsel just before he was indicted in the classified documents and 2020 election interference cases this summer.

But Weinstein said that federal authorities selectively issue target letters to possible defendants during grand jury investigations.

“They are typically not issued at the inception or even during the middle of an investigation,” Weinstein told the Miami Herald. “They are more commonly issued toward the end of an investigation, when prosecutors want to engage a target in discussions about the case or the target asks for a letter to engage the prosecutors in settlement negotiations.”

LifeWallet said that it received two subpoenas this year from the SEC and anther subpoena from the U.S. Attorney’s Office in Miami.

The SEC subpoenas, which the company received in March and May, sought records related to the company’s process of going public and its financial statements filed with the SEC last year, which the company admitted earlier this year were not reliable. When the company filed its annual disclosure for 2022 last week, it admitted that it had overstated the book value of the company by $3 billion in its last filing submitted in 2022.

In March, the federal grand jury subpoena requested information concerning the company, according to the SEC filing.

The company said in Tuesday’s SEC filing that it is cooperating with both investigations. The company also said in the filing that a “special committee” of the LifeWallet’s board of directors and external advisors “reviewed the subject matter information” related to the subpoenas.

“Based on this review, the Company believes that these investigations will be resolved without any material developments; however, there can be no assurance as to the outcome or future direction thereof,” the filing said.

On Wednesday, a LifeWallet representative said the company would not comment further about the two federal investigations.

When LifeWallet first went public in May 2022, it was valued at $32 billion and Ruiz was estimated to be worth billions of dollars by Forbes Magazine. But the company’s stock tumbled immediately after the company went public on the NASDAQ exchange through a merger with a special purpose acquisition company, or SPAC. The company’s stock, which traded for more than $10 immediately before the company went public, is now trading for less than a quarter.

In addition to the federal investigations, Ruiz faces multiple lawsuits involving business owners who say they are owed millions of dollars from Ruiz or LifeWallet for acquiring their companies. Ruiz disputes that he or the company owes anything.

LifeWallet has spent millions of dollars on newly permissible name, image and likeness, or NIL, deals with star athletes at the University of Miami. These NIL deals are a newly legal option for college athletes to make money from endorsements.

Ruiz’s activities already got the university in trouble earlier this year. The women’s basketball team was sanctioned after the NCAA found that Ruiz had made impermissible contact with two sisters who were in the process of transferring to Miami from Fresno State. Ruiz and the basketball players escaped penalty. The university did not immediately respond to a request for comment.

Ruiz has also proposed building a football stadium for the University of Miami, though the plans have yet to come to fruition. The stadium proposal came amid a spending spree by Ruiz in which he and his companies spent more than $150 million on numerous Miami properties, including seven waterfront mansions in the exclusive Gables Estates, and purchased multiple private jets, including a Boeing 767.

Amassing an empire
Take a look at John Ruiz's real estate purchases in the Gables Estates.

Ruiz formed LifeWallet in 2014. The company aims to recover payments made by Medicare-affiliated insurance companies that should have been paid by different parties. For example, if someone covered by a Medicare-affiliated plan was injured in a car accident and the Medicare plan paid the hospital tab, Ruiz’s company would pursue payment from the car insurance company, which by law should have been responsible for paying the medical bills.

Ruiz’s ascent was all the more stunning given that his home, his boat and multiple office spaces he owned were the subject of foreclosure actions a decade ago.