Federal prosecutors on Friday announced charges against the owner of a legal benefits company for allegedly defrauding multiple lenders out of $30 million.
Gary Alan Frank, 47, of Philadelphia, was charged by criminal complaint with one count of wire fraud by the U.S. Attorney's Office for the Eastern District of Pennsylvania.
Frank allegedly defrauded several prospective lenders through his business, the Legal Coverage Group Ltd., which contracts with employers that offer their employees a legal plan as part of their employee benefits plans, prosecutors said in a statement Friday.
"In late 2014 Frank secured a $30 million loan from two lenders, Prudential Insurance Co. of America and Prudential Retirement Insurance and Annuity Co. (collectively, 'Prudential'), by making various false representations regarding the size and revenue of the Legal Coverage Group's business. After obtaining these funds, Frank and the Legal Coverage Group continued to deceive Prudential and other lenders, including various individuals," prosecutors said.
"When the relationship between Prudential and the Legal Coverage Group soured in 2017, Prudential sued the Legal Coverage Group and Frank in New York state court," prosecutors said, "Soon after Prudential brought this suit, Frank caused counsel for the Legal Coverage Group to provide fraudulent bank documents to Prudential. For example, on or about Oct. 11, 2017, Frank caused the Legal Coverage Group's counsel to email a false September 2017 bank account summary to Prudential's attorney. The false account summary for the Legal Coverage Group reflected an ending balance of $1,526,322.12, even though the actual ending balance for this period was approximately $13,114.24."
