James Keating has pleaded guilty to one count of wire fraud in New Haven federal court, admitting he defrauded his former employer Allied World Insurance Company.
According to US Attorney for the District of Connecticut Vanessa Roberts Avery’s announcement, Keating perpetrated the fraudulent act against Allied World until 2021.
Court documents and statements reveal that Keating previously held the positions of assistant vice president and surety bond claims handler at Allied World. He later continued in a similar role at US Fire Insurance Company, a subsidiary of Crum and Forster, where he also processed claims on behalf of Allied World. The claims were managed through Allied World’s Farmington premises.
It was noted that between 2017 and 2021, Keating engaged in fraudulent activities against Allied World using two schemes. In the first scheme, he created a shell company named American Construction & Industrial LLC to invoice Allied World for unnecessary claims work that was not conducted, redirecting the funds to himself.
In the second scheme, the fraudster received kickbacks from vendors working with Allied World through another company he owned, Surety Risk Solutions. Furthermore, Keating made these vendors utilize another company, Kodiak Asset Recovery, in which he had an undisclosed ownership interest, charging inflated fees for asset searches.
Through his fraudulent activities, Keating made nearly $1 million from American Construction & Industrial, over $350,000 in kickbacks via Surety Risk Solutions, and almost $125,000 from Kodiak Asset Recovery.
As part of his plea agreement, Keating agreed to pay restitution totaling $1,226,603.97. The amount represents the loss sustained by Allied World ($1,446,491.95) minus the $219,887.98 he has already repaid under a civil judgment.
Keating is currently released on a $100,000 bond while awaiting sentencing, which has not yet been scheduled. His wire fraud offense could result in a maximum sentence of 20 years in prison.
What do you think about this story? Share your thoughts in the comments below.
