An Irvington man has been sentenced to 21 months in prison for his role in a $30 million insurance fraud scheme, officials said.
Allen Reichman, 54, was also ordered to pay $10 million in restitution and serve two years of supervised release for scamming his employer, U.S. Attorney Preet Bharara said in a statement.
Reichman pleaded guilty in February to conspiracy to commit wire fraud, a charge that stemmed from his criminal activity between July 2008 and November 2009. During that time period, Reichman, a former executive director of investments at a New York investment bank and financial services company, worked with Charles Antonucci, Sr., Matthew Morris, and Wilbur Anthony Huff to defraud his employer, officials said.
The crew convinced Reichman's firm to provide a $30 million loan for Antonucci, the president of Park Avenue Bank, to buy Oklahoma-based insurance company Providence P&C, which was owed $5 million by a company controlled by Huff, a Kentucky businessman, officials said.
Providence's own assets were illegally used as collateral for the loan, and Oklahoma insurance regulators approved the transaction based in part on false information that Reichman and his co-conspirators provided to regulators and Reichman's firm, officials said.
Reichman, despite warnings from both his firm and Providence's general counsel, pushed the loan through in January 2009 and received at least $200,000 in commissions from his firm as a result of the deal, officials said.
Providence became insolvent in November 2009 and was placed in receivership.
U.S. District Judge Naomi Reice ordered Reichman to pay $10 million for the losses incurred by his firm. He must also forfeit $200,000 to the federal government.
The other three co-conspirators all pleaded guilty in the case. Huff was sentenced to 12 years in prison, while Antonucci and Morris are scheduled to be sentenced in August.