Conn. U.S. Attorney: Pennsylvania Resident Indicted for Defrauding Allied World Insurance Company

NEW HAVEN, Connecticut, Jan. 26 -- The office of the U.S. Attorney for the District of Connecticut issued the following news release on Jan. 25, 2024:

Vanessa Roberts Avery, United States Attorney for the District of Connecticut, and Robert Fuller, Special Agent in Charge of the New Haven Division of the Federal Bureau of Investigation, today announced that a federal grand jury in New Haven has returned a 10-count indictment charging JAMES KEATING, 51, of Paoli, Pennsylvania, with offenses stemming from an alleged fraud scheme against his former employer.

The indictment was returned on January 16, 2024, and Keating surrendered to authorities in Philadelphia on January 18. He appeared today before U.S. Magistrate Judge Thomas O. Farrish in Hartford, pleaded not guilty, and was released on a $100,000 bond.

As alleged in the indictment, Keating was an Assistant Vice President and surety bond claims handler at Allied World Insurance Company ("Allied World"). He later served in the same capacity at Crum and Forster subsidiary U.S. Fire Insurance Company, where he also handled claims on Allied World surety bonds. All surety bond claims were handled through Allied World's offices in Farmington, Connecticut. Between 2017 and 2021, Keating defrauded Allied World in two ways. First, he used a shell company, American Construction & Industrial LLC, to bill Allied World for unnecessary claims work that was not performed and took the proceeds for himself. Second, he solicited and received kickbacks from Allied World vendors through another Keating-owned company, Surety Risk Solutions (also known as "SRS" or "SR5"), without the knowledge of his employer. Keating also caused these vendors to use another company in which he had an undisclosed ownership interest, Kodiak Asset Recovery, for asset searches at vastly inflated prices. Keating profited nearly $1 million through American Construction & Industrial LLC, more than $350,000 in kickbacks through Surety Risk Solutions, and nearly $125,000 through Kodiak Asset Recovery.

The indictment charges Keating with 10 counts of wire fraud, an offense that carries a maximum term of imprisonment of 20 years on each count.

U.S. Attorney Avery stressed that an indictment is not evidence of guilt. Charges are only allegations, and the defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt.

This matter is being investigated by the Federal Bureau of Investigation. The case is being prosecuted by Assistant U.S. Attorney David E. Novick.

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Original text here: https://www.justice.gov/usao-ct/pr/pennsylvania-resident-indicted-defrauding-allied-world-insurance-company