Clarks Summit Man Sentenced to 94 Months in Jail for $400,000 Auto Warranty Fraud Scheme | USAO-MDPA

SCRANTON — The United States Attorney’s Office for the Intermediate District of Pennsylvania announced that Brian Larry, 60, of Clarks Summit, Pennsylvania, was sentenced to 94 months in prison by the United States District Court Judge. United Malachy E. Mannion for fraud, aggravated identity theft, and misdemeanor misrepresentation. A federal jury previously convicted Larry of all 13 counts in its indictment on May 10, 2021.

According to U.S. Attorney John C. Gurganus, Larry defrauded his former employer, a Wilkes-Barre-based auto warranty company, out of more than $400,000. From January 2014 to October 2018, Claims Manager Larry stole the personal information of warranty policyholders. Larry then provided it to his co-conspirators, who created fake invoices for supposedly non-existent auto repair work done at various garages in Rhode Island, Massachusetts, and Pennsylvania. The scheme included forging policyholder signatures on documents. The false and falsified documentation was then sent to the warranty company, where Larry approved payment of the bills, in exchange for bribes. During the scheme, Larry and his co-conspirators obtained approximately $400,000 paid by the warranty company under the fake invoices, including thousands of dollars in repair work for Larry’s personal vehicle that he billed to d other policyholders. Evidence at trial showed that Larry then forged internal collateral company documents in an effort to cover up his crimes. When confronted by FBI special agents, Larry denied receiving bribes in return for his participation in the scheme.

In passing sentence, Judge Mannion noted that Larry had expressed no remorse for his unlawful conduct. Judge Mannion also ordered Larry to pay $394,701.96 to the victim of his crimes and to serve three years of supervised release after serving his prison sentence.

Three of Larry’s accomplices were also convicted in this investigation:

1. Matthew Gershkoff, 64, of North Providence, Rhode Island, pleaded guilty to conspiracy to commit wire and mail fraud, and aggravated identity theft, and was sentenced to 30 months in prison and three years of probation. Gershkoff was convicted of preparing false invoices for non-existent auto repairs at several auto repair shops located in Rhode Island and Massachusetts, and forging policyowner signatures. Gershkoff pleaded guilty on May 18, 2020 to causing between $250,000 and $550,000 in fraudulent loss to the Wilkes-Barre-based auto warranty company, and was ordered to pay restitution of $385,352.19.

2. Herman Cabral, 62, of Cranston, Rhode Island, pleaded guilty to conspiracy to commit wire fraud and was sentenced to 10 months in prison and three years of probation. Cabral was convicted of processing false invoices for nonexistent auto repairs through his Providence, Rhode Island auto detailing shop, A Plus Auto Services. Cabral pleaded guilty on July 23, 2019 to causing between $150,000 and $250,000 in fraudulent loss to the Wilkes-Barre-based automobile warranty company, and was ordered to pay $211,644.03 in restitution.
3. Jason Pannone, 40, of North Providence, Rhode Island, pleaded guilty to conspiracy to commit wire and mail fraud, and aggravated identity theft, and was sentenced to 18 months in prison and two years of probation. Pannone was found guilty of processing false invoices for non-existent auto repairs through his Providence, Rhode Island, auto detail shop, Platinum Auto Services, and through Ultra Auto Services, where he worked. Pannone pleaded guilty on March 23, 2021 to causing between $95,000 and $150,000 in fraudulent loss to the Wilkes-Barre-based auto warranty company and was ordered to pay restitution of $128,667.16.

The case was investigated by the Federal Bureau of Investigation. Assistant U.S. Attorneys Phillip J. Caraballo and Jeffrey St John prosecuted the case.

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