There's a plot for a crime-thriller in here somewhere...Behemoth banks secretly taking out life insurance policies on their employees and collecting benefits upon their deaths. The practice is so common in the international high-finance world that there's even an acronym to describe it: BOLI, for "bank-owned life insurance." The way banks are falling like dominoes lately, the conspiracy theorist in me wonders if current and former bank employees who have BOLIs are looking twice when they cross the street these days.

Attorneys from Houston's The Clearman Law Firm have begun a nationwide investigation into the practice. "It is ironic that thousands of bank employees have been laid off, yet banks still stand to benefit financially when those employees die," says class-action attorney Scott Clearman.  "These types of policies benefit only the banks, not their employees."

Many of the world's largest banks have taken out life insurance policies on their workers, including Bank of America, JP Morgan Chase, Bear Stearns, Citigroup, Wachovia, Washington Mutual, Wells Fargo and many others. Nearly half of all U.S. banks have reported owning BOLI policies at an estimated value of $120 billion. Ethics aside, the practice raises serious questions about unauthorized use of personal information. A bank purchasing a BOLI policy must provide the insurer with personal information belonging to each covered employee, including his or her name, sex, age and Social Security number. Employees' Social Security numbers are then used to conduct "death sweeps" where banks typically hire outside brokers to sweep public records in order to learn if an employee or former employee has died. A person whose life a bank insured without consent may have a right to sue for the bank's misappropriation of their identity, and may be able to recover profits made by the bank, broker and insurer. To interview Mr. Clearman about the BOLI investigation, contact Bruce Vincent at 800-559-4534 or bruce@androvett.com.