Penn. man defrauds CT company out of $1.4M. Here’s how he did it.

A Pennsylvania man has pleaded guilty to a federal charge in connection with a scheme in which authorities say he defrauded a Connecticut company out of about $1.4 million.

James Keating, 52, of Paoli, Pennsylvania pleaded guilty to one count of wire fraud during a hearing this week in federal court in New Haven, according to the U.S. Attorney’s Office for the District of Connecticut.

According to federal officials, Keating formerly served as the assistant vice president and surety bond claims handler at Allied World Insurance Co. 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, authorities noted. All surety bond claims were handled through Allied World’s offices in Farmington.

Authorities allege that between 2017 and 2021, Keating defrauded Allied World using a “shell company,” American Construction & Industrial LLC., to bill Allied World for unnecessary claims work that was not performed. Federal officials said he pocketed the proceeds.

Keating also allegedly solicited and received kickbacks from Allied World vendors through another company he owned, Surety Risk Solutions, which is also known as “SRS” or “SR5.” Authorities said he did this without the knowledge of his employer.

According to federal officials, 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 through Surety Risk Solutions and nearly $125,000 through Kodiak Asset Recovery, according to authorities.

As part of the plea deal he accepted, Keating has agreed to pay a little over $1.2 million, which would account for the losses sustained by Allied World after he already paid about $219,000 as part of a civil judgment.

Keating is free on $100,000 bond while he awaits sentencing, which has not yet been scheduled. The charge he pleaded guilty to carries a maximum of 20 years in prison.

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