(Bloomberg) — A former Oppenheimer & Co. Inc. executive pleaded guilty to participating in a fraud that the U.S. says led to the collapse of an Oklahoma insurance company.
Allen Reichman, 55, told a Manhattan judge Friday that he and former Park Avenue Bank Chief Executive Officer Charles Antonucci schemed to defraud Oklahoma regulators in the $37.5 million sale of Providence Property & Casualty Insurance Co. In announcing the case in 2012, prosecutors said the men misrepresented the source of the funds that Antonucci used to buy Providence.
Reichman pleaded to a charge of wire fraud conspiracy, saying he helped arrange for an illegal $30 million loan from Oppenheimer to fund the bulk of the transaction, which wasn’t disclosed to regulators.
After deceiving regulators into approving the sale, Reichman and Antonucci, along with a Park Avenue Bank senior vice president and a Kentucky businessman, took millions of dollars of the company’s assets for themselves, according to prosecutors.
“I didn’t realize the loan would cause the collapse of Providence,” Reichman told U.S. Magistrate Judge Henry Pitman Friday. “I am very sorry that my actions contributed to causing harm.”
As part of his plea agreement, Reichman faces 57 to 60 months in prison when he is sentenced. No sentencing date has been set.
Antonucci pleaded guilty in 2010 to lying to regulators and embezzling funds. He was the first person convicted of trying to defraud the U.S. Troubled Asset Relief Program. Regulators closed Park Avenue Bank in March 2010 and its assets were assumed by Wayne, New Jersey-based Valley National Bank, according to the Federal Deposit Insurance Corp.