Ex-Oppenheimer employee gets 1-3/4 years in prison for fraud scheme
By Nate Raymond
NEW YORK, July 15 (Reuters) - A former executive director of investments at Oppenheimer & Co Inc was sentenced to 1-3/4 years in prison on Wednesday for conspiring to deceive regulators and his employer as part of a scheme that left an Oklahoma-based insurer in receivership.
Allen Reichman, 54, was also ordered by U.S. District Judge Naomi Reice Buchwald in Manhattan to pay $10 million in restitution to the investment firm and forfeit $200,000. In February, he pleaded guilty to conspiracy to commit wire fraud.
Reichman told Buchwald that he was sorry for his role in the scheme. But Buchwald said she believed Reichman at the sentencing hearing had sought to minimize the extent of his wrongdoing.
"He was actively involved in making this happen and more knowledgeable than I think he'd like me to believe," she said.
Prosecutors said Reichman and others schemed to defraud Oppenheimer, a unit of Oppenheimer Holdings Inc, into providing a $30 million loan for the purchase of insurer Providence P&C by Charles Antonucci, president of New York-based Park Avenue Bank.
The scheme, which also involved deceiving Oklahoma insurance regulators into approving the deal, came to the attention of prosecutors following an earlier probe into Park Avenue Bank, which went under in March 2010.
Antonucci pleaded guilty in October 2010 to charges including securities fraud, becoming the first person to be convicted for stealing U.S. government bank bailout funds from the Troubled Asset Relief Program, or TARP.
Following his conviction, U.S. authorities unveiled charges in 2012 against Kentucky businessman Wilbur Huff, Reichman and Matthew Morris, Park Avenue's senior vice president, who pleaded guilty in 2013.
Huff, who authorities said participated in a series of frauds including a $53 million tax scheme, pleaded guilty and was sentenced in June to 12 years in prison. Morris pleaded guilty in 2013.
In Reichman's case, prosecutors said from 2008 to 2009, he helped secure a financing for the $37.5 million purchase of Providence P&C by processing a loan through Oppenheimer that was illegally under Oklahoma law secured by the insurer's own assets.
The loan's illegal structure caused the insurer to become insolvent, authorities said.
But before being placed in receivership, Huff, Morris and Antonucci took money out of the company for their own benefit, while Reichman generated hundreds of thousands of dollars in commissions, prosecutors said.
The case is U.S. v. Reichman, U.S. District Court for the Southern District of New York, No. 12-750.
(Reporting by Nate Raymond in New York; Editing by Lisa Shumaker)
