The ousted founder and chairman of Presidential Life Corp. is calling an investigation into alleged self-dealing in his family’s charitable foundation a “diversionary tactic.”

Herbert Kurz

Herbert Kurz, who was removed as chairman and CEO of the New York-based life insurance company one week earlier, is asking the company’s shareholders in a Dec. 17 letter to remove the current board of directors.

“The board’s attacks on the foundation are a diversionary tactic, designed to distract you from the real issue we face as shareholders – the current leadership’s stewardship of the company,” Kurz wrote shareholders.

Kurz said he has become “increasingly frustrated with Presidential Life’s operating results and shareholder returns, and I believe the only way to reverse this decline is to remove the current Board of Directors (other than me)” and replace them with a slate of officers he has organized.

In the letter, Kurz accuses the board of spending $1 million so far with another $250,000 anticipated in efforts “to investigate and attack the company’s largest shareholder,” his family’s charitable foundation.

Kurz was stripped of his title following a vote by the board of directors after irregularities were found in the 2007 tax returns of the Kurz Family Charitable Foundation, run by the Kurz family, which sought to acquire a controlling interest in the firm. It owns 20.8% of the company’s stock, according to Kurz’s letter.

Kurz, who remains on the board of Presidential Life and is also a stockholder, is an officer and director of the foundation, which is a separate entity from Presidential.

He was removed for possible self-dealing and using charitable assets of the foundation for personal expenses. The company says the irregularities were found as tax returns of the foundation were being examined as part of its application to the New York State Insurance Department related to the acquisition.

“We do not comment on ongoing investigations,” Andrew N. Mais, director of public affairs for the New York State Insurance Department, told IFAwebnews.com last week.