A federal judge sentenced James Keating, 52, of Paoli, Pennsylvania, to 20 months in prison and three years of supervised release for stealing more than $1.4 mn from Allied World Insurance Co. The U.S. District Judge, Victor A. Bolden, issued the sentence in New Haven, Connecticut, as announced by Acting U.S. Attorney Marc H. Silverman.
Keating worked as an assistant vice president and surety bond claims handler at Allied World. He later held the same role at Crum and Forster subsidiary U.S. Fire Insurance Co., where he continued handling claims on Allied World surety bonds.
All surety bond claims went through Allied World’s Farmington, Connecticut, office.
Between 2017 and 2021, he executed a two-part fraud scheme. First, he used a shell company, American Construction & Industrial LLC, to bill Allied World for unnecessary work that was never performed, taking nearly $1 mn for himself.
Second, he received more than $350,000 in kickbacks from vendors through another company he controlled, Surety Risk Solutions (SRS or SR5), without his employer’s knowledge. He also directed these vendors to use Kodiak Asset Recovery, a company in which he had an undisclosed ownership interest, charging inflated fees for asset searches and profiting nearly $125,000.
Judge Bolden ordered Keating to pay $1,226,603.97 in restitution. This amount represents Allied World’s total loss of $1,446,491.95, minus $219,887.98 that he had previously repaid in a civil judgment.
Keating pleaded guilty to wire fraud on July 30, 2024. The FBI investigated the case, and Assistant U.S. Attorney David E. Novick prosecuted it.