Man pleads guilty after defrauding Farmington Allied World business

A 52-year-old man from Paoli, Pennsylvania, pleaded guilty Tuesday in New Haven federal court to an offense stemming from a fraud scheme against his former employer, according to Vanessa Roberts Avery, U. S. Attomey for the District of Connecticut.

James Keating changed his plea to guilty and has to pay restitution of $1, 226, 604 to Allied World.

According to court documents and statements made in court, Keating was an assistant vice president and surety bond claims handler at Allied World Insurance Company. He later served in the same capacity at Crum and Forster subsidiary U.S. Fire Insurance Co., where he also handled claims on Allied World surety bonds. All surety bond claims were handled through Allied World's offices in Farmington.

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 woik that was not performed and took the proceeds for himself Second, he solicited and received kickbacks from Allied World vendors through another Keatingowned 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.

Keating pleaded guilty to one count of wire fixiud, which carries a maximum term of 20 years. Keating has agreed to pay the restitution, which represents the loss to Allied World of $1, 446, 491.95, less $219, 887.98 that he previously repaid as part of a civil judgment. Keating is released on a $100, 000 bond pending sentencing, which is not scheduled.