Prominent Business Owner and Ex-Board Member of Philadelphia Non-profits Sentenced to 17 Years in

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https://www.justice.gov/usao-edpa/pr/prominent-business-owner-and-ex-board-member-philadelphia-non-profits-sentenced-17

Department of Justice
U.S. Attorney’s Office
Eastern District of Pennsylvania

FOR IMMEDIATE RELEASE
Wednesday, October 23, 2019

Prominent Business Owner and Ex-Board Member of Philadelphia Non-profits Sentenced to 17 ½ Years in Prison

PHILADELPHIA – U.S. Attorney William M. McSwain announced that Gary Frank, 48, of Philadelphia and Bala Cynwyd, PA, was sentenced to 210 months’ imprisonment, five years supervised release and ordered to pay $33,702,900 in restitution by United States District Judge Gerald Pappert for executing a massive fraudulent loan scheme, for which he was indicted in March 2018 on charges of wire fraud, bankruptcy fraud, and money laundering, and to which he subsequently pleaded guilty in April 2019. Immediately following the sentencing hearing, the defendant was taken into custody to begin serving his jail sentence.

For over a decade, the defendant executed a complex and sophisticated scheme to defraud numerous victims. Frank owned and operated a Bala Cynwyd business named the Legal Coverage Group, Ltd., which contracted with employers desiring to offer a legal plan to their employees as part of their benefits plans. Frank tricked his victims into believing that the Legal Coverage Group was a rapidly growing leader in the legal services industry, generating hundreds of millions of dollars of annual revenue and employing hundreds of individuals. In reality, Frank’s business experienced virtually no growth from approximately 2006 through 2017, and generated only several thousand dollars of annual revenue.

Through this fraud, the defendant obtained over $30 million in loans, which he used to live an extravagant lifestyle, including finagling his way into the cultural scene in Philadelphia with positions on the boards of the Philadelphia Orchestra and the Philly Pops. The defendant’s largest victims were banks and financial institutions, which loaned the Legal Coverage Group millions of dollars based upon the defendant’s lies. The defendant also allegedly deceived many individuals and other entities, including several of his close friends, his company’s staff members, its advisors, customers, vendors, and local charities.
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