A former executive of a group of collapsed insurers was sentenced to five years in federal prison and ordered to pay $286 million in restitution.
Andrew B. Scherr, who pleaded guilty last year in U.S. District Court in Dallas to two criminal counts stemming from the insurers’ collapse, is a former associate of a young financier named Alexander Chatfield Burns who built a New York-based insurance empire.
The empire collapsed in early 2014 after Mr. Burns checked into a mental-health ward of a hospital and left behind an affidavit describing unusual asset transfers. The insurers’ collapse was the focus of a 2015 page-one article in The Wall Street Journal.
Federal regulators in a separate 2018 civil action alleged that Messrs. Burns and Scherr had raided the insurers’ funds of more than $300 million and replaced them with worthless or grossly overvalued assets.
Among the substituted assets was a supposed painting by Caravaggio that the SEC alleged was “of questionable authenticity.” Both defendants have settled with the SEC.
