A former Oppenheimer & Co. Inc. executive was sentenced to almost two years in prison for his role in a fraud that prosecutors say led to the collapse of an Oklahoma insurance company.
Allen Reichman, 54, and three others scammed Oklahoma regulators in the $37.5 million leveraged buyout of Providence Property & Casualty Insurance Co., according to prosecutors. The group lied about using Providence’s assets as collateral for a $30 million loan from Oppenheimer, in violation of Oklahoma regulations preventing insurers from putting that much of their capital at risk, prosecutors said.
U.S. District Judge Naomi Reice Buchwald Wednesday faulted Reichman’s “persistent attempts to minimize” his role in the fraud by claiming he’d informed Oppenheimer about details of the transaction. She also rejected his request for a sentence of probation or home confinement and sent him to prison for 21 months.
Reichman, who was arrested and charged in 2012, pleaded guilty in February to a single conspiracy count, weeks before he was to go on trial.
Reichman earned $200,000 in commissions from the deal while the others stole millions of dollars from the insurer, prosecutors said. Under a plea deal, Reichman agreed to forfeit his fees. Buchwald also ordered him to pay $10 million in restitution to Oppenheimer. He’ll surrender to prison Dec. 1.
The ringleader of the fraud, Wilbur Anthony Huff, a Kentucky businessman convicted in a previous fraud, was sentenced last month to 12 years in prison for the Providence case.
The case is U.S. v. Huff, 12-cr-00750, U.S. District Court, Southern District of New York (Manhattan).