Insurance Executive Pleads Guilty to $1.5 Million Fraud Scheme

Vanessa Roberts Avery, U.S. Attorney for the District of Connecticut, announced that James Keating, 52, of Paoli, Pennsylvania, has pleaded guilty to wire fraud in connection with a scheme that defrauded his former employer, Allied World Insurance Company, of nearly $1.5 million. Keating, a former Assistant Vice President and surety bond claims handler, carried out the fraud between 2017 and 2021 while working for Allied World and later U.S. Fire Insurance Company.

Keating’s scheme involved billing Allied World for unnecessary claims work through his shell company, American Construction & Industrial LLC, and receiving kickbacks from vendors via another company he owned, Surety Risk Solutions. Additionally, he used a third company, Kodiak Asset Recovery, to conduct overpriced asset searches. Through these fraudulent activities, Keating profited nearly $1 million from American Construction & Industrial LLC, over $350,000 from Surety Risk Solutions, and approximately $125,000 from Kodiak Asset Recovery.

Having pleaded guilty to one count of wire fraud, Keating faces a maximum prison sentence of 20 years. He has agreed to pay $1,226,603.97 in restitution, accounting for the total loss to Allied World minus the amount he previously repaid. Keating is currently released on a $100,000 bond pending sentencing, which has yet to be scheduled.

The case is being handled by the Federal Bureau of Investigation and prosecuted by Assistant U.S. Attorney David E. Novick.