Paoli Man Pleads Guilty In $1.45M Federal Fraud Scheme

PAOLI, PA — A Paoli man has admitted in federal court to fraud, authorities said.

Vanessa Roberts Avery, United States Attorney for the District of Connecticut, said James Keating, 52, of Paoli, pleaded guilty Tuesday in New Haven federal court to an crime stemming from a fraud scheme against his former employer.

According to court documents and statements made in court, Keating was an Assistant Vice President and surety bond claims handler at Allied World Insurance Company. He later served in the same capacity at Crum and Forster subsidiary U.S. Fire Insurance Company, where he also handled claims on Allied World surety bonds.

All surety bond claims were handled through Allied World’s offices in Farmington, Connecticut.

Between 2017 and 2021, Keating defrauded Allied World in two ways, authorities said.

First, he used a shell company, American Construction & Industrial LLC, to bill Allied World for unnecessary claims work that was not performed and took the proceeds for himself. Second, he solicited and received kickbacks from Allied World vendors through another Keating-owned company, Surety Risk Solutions, without the knowledge of his employer.

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.

Authorities said he profited nearly $1 million through American Construction & Industrial LLC, more than $350,000 in kickbacks through Surety Risk Solutions, and nearly $125,000 through Kodiak Asset Recovery.

He pleaded guilty to one count of wire fraud, which carries a maximum term of imprisonment of 20 years.

Keating has agreed to pay restitution of $1,226,603.97, which represents the loss to Allied World of $1,446,491.95, less $219,887.98 that he previously repaid as part of a civil judgment.

Keating is released on a $100,000 bond, pending sentencing.