$30M Fraud Scheme Lands Bala Cynwyd Man In Prison

BALA CYNWYD, PA — A Bala Cynwyd businessman was hit with a 17-and-a-half-year prison sentence and ordered to pay nearly $34 million in restitution in connection with a major fraudulent loan scheme, federal authorities said.

U.S. Attorney William M. McSwain said Gary Frank, 48, of Philadelphia and Bala Cynwyd, was sentenced to 210 months in prison, five years of supervised release, and ordered to pay $33,702,900.

Frank conducted a massive fraudulent loan scheme.

He was indicted in March 2018 on wire fraud, bankruptcy fraud, and money laundering charges, and he subsequently pleaded guilty to those charges in April 2019.

For more than a decade, Frank ran a scheme to defraud numerous victims.

Frank owned and operated a Bala Cynwyd business named the Legal Coverage Group, Ltd., which contracted with employers desiring to offer a legal plan to their employees as part of their benefits plans.

He tricked his victims into believing that the Legal Coverage Group was a rapidly growing leader in the legal service industry, generating hundreds of millions of dollars of annual revenue and employing hundreds of individuals.

In reality, Frank’s business experienced virtually no growth from approximately 2006 through 2017, and generated only several thousand dollars of annual revenue.

Through this fraud, the defendant obtained over $30 million in loans, which he used to live an extravagant lifestyle, including finagling his way into the cultural scene in Philadelphia with positions on the boards of the Philadelphia Orchestra and the Philly Pops.

The defendant’s largest victims were banks and financial institutions, which loaned the Legal Coverage Group millions of dollars based upon the defendant’s lies.

The defendant also allegedly deceived many individuals and other entities, including several of his close friends, his company’s staff members, its advisors, customers, vendors, and local charities.