Former Allied World exec Keating sentenced to 20 months for defrauding (re)insurer of more than $1.4mn

By Mia MacGregor

Jan 30 - (The Insurer) - James Keating, former assistant vice president and surety bond claims handler at Allied World, has been sentenced to 20 months in prison followed by three years of supervised release for defrauding his former employer of over $1.4mn.

Keating, who later held a similar role at Crum & Forster subsidiary US Fire Insurance Company, managed claims on Allied World surety bonds through the company's Farmington, Connecticut office.

According to the US Attorney's Office for the District of Connecticut, Keating's fraudulent activities spanned from 2017 to 2021.

He created a shell company, American Construction & Industrial LLC, to bill Allied World for unnecessary claims work that was never performed, pocketing nearly $1mn.

Additionally, through another Keating-owned entity, Surety Risk Solutions (SRS), he solicited and received more than $350,000 in kickbacks from vendors 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 and profiting nearly $125,000.

In total, Keating unlawfully gained more than $1.4mn.

US District Judge Victor Bolden ordered Keating to pay $1,226,603.97 in restitution, accounting for the total loss to Allied World of $1,446,491.95, less the $219,887.98 Keating had previously repaid through a civil judgment.

Keating pleaded guilty to wire fraud on 30 July 2024.

Allied World declined to comment for this article.