James Keating, a 52-year-old Pennsylvania resident, has been sentenced to 20 months in prison for organizing a fraudulent scheme that resulted in a loss of over $1.4 million for his former employer, Allied World Insurance. Keating, who held the position of Assistant Vice President and surety bond claims handler, used shell companies to bill for fictitious claims work and received kickbacks from vendors. His fraudulent activities took place between 2017 and 2021, during which he channeled almost $1 million through American Construction & Industrial LLC, obtained over $350,000 in kickbacks through Surety Risk Solutions, and made an additional profit of $125,000 through Kodiak Asset Recovery.
U.S. District Judge Victor A. Bolden has also ordered Keating to pay $1,226,603.97 in restitution, which accounts for the total losses minus partial repayments made in a civil judgment. Keating pleaded guilty to wire fraud in July 2024, and his sentencing occurred in New Haven, Connecticut.
The FBI conducted an investigation into the case, while Assistant U.S. Attorney David E. Novick prosecuted. Keating’s scheme exploited his position within the insurance industry, highlighting the risks associated with internal fraud and the need for oversight in claims handling. This conviction serves as a reminder of the federal government’s dedication to prosecuting financial fraud within the insurance sector.
