Kenilworth Insurance Broker Sentenced Over Annuity, PPP Fraud Schemes
CHICAGO — A Wisconsin man who operated a North Shore insurance agency was sentenced Wednesday to seven years in federal prison after admitting to defrauding clients and the government.
Daniel Rosenbaum, 56, pleaded guilty to wire fraud last August after prosecutors agreed to drop the four other counts he had been facing since his April 2021 indictment.
As owner of Alexander & Rosenbaum Financial Group LLC, Rosenbaum collected more than $1 million from at least 18 clients for annuity premiums he never purchased.
Instead, he used the money for cash withdrawals, loan payments, retail purchases and spousal and child support payments, he admitted in his plea agreement.
While out on bail after his indictment, Rosenbaum went on to lie about still being a licensed insurance broker to people he knew.
While claiming to work for “Rosenbaum Family Planning,” he used money collected for their investments or premiums for his own personal gain and tried to persuade them not to contact law enforcement by promising to pay them back with interest, according to the plea agreement.
In a separate scheme, Rosenbaum fraudulently obtained coronavirus relief money and unemployment insurance benefits from the Illinois Department of Employment.
In 2020 and 2021, he received more than $53,000 worth of Paycheck Protection Program, or PPP, loans for himself and two close relatives, falsely claiming they were all independent contractors working as sales representatives.
Rosenbaum also managed to get state officials to provide more than $65,000 after filing fraudulent applications for insurance benefits in his own name and a close family member who was unaware of his fraud, according to his plea agreement.
In January 2023, while still awaiting trial, records show Rosenbaum’s bond was revoked over the allegations he continued to engage in criminal conduct following his indictment and he was ordered to be jailed.
In a sentencing memo requesting 36 month in prison, Rosenbaum’s attorneys Steven Decker and James DiQuattro asked the judge not to consider the offense as a “sophisticated” one under federal sentencing guidelines.
“With the exception of issuing occasional fabricated annuities contracts and statements to a small number of victims to conceal his fraud, this scheme did not involve sophisticated means,” Decker and DeQuattro said.
“After making false statements and misrepresentations, the victims in this case would simply provide the money to Mr. Rosenbaum through wire transfers or checks or by other means. He would then deposit it into certain bank accounts that were under his name or control. And then he would simply use the money for his own personal and family expenses,” they said. “This is not a case that involves sophisticated means. This was nothing more than a run of the mill wire fraud scheme.”
Federal prosecutors, arguing for a sentence of 11 to 14 years, pushed back on the defense’s assertion that the scheme was unsophisticated.
Assistant U.S. Attorney Prashant Kolluri noted that Rosenbaum had created fake bank statements, used his family members identity to apply for the PPP loans and deposited the money in bank accounts in the names of various businesses and other people in addition to his own.
“Similarly, in fraudulently applying for unemployment insurance benefits for himself and a close family member, Rosenbaum submitted a March 15, 2020 letter purportedly signed by the president of Rosenbaum Family Planning, which was a company Rosenbaum used to continue to steal funds from clients after he had lost his insurance provider license in 2020,” Kolluri said in the government’s response.
“Rosenbaum’s use of (a) fictitious and doctored documents that he created (such as bank statements, annuity invoices, insurance policy contracts, and forged letters), (b) the personal identifiers of two close relatives, (c) multiple bank accounts, and (d) subsequent victim money to pay back prior victims demonstrates that his offense conduct involved ‘a greater level of planning or concealment than a typical fraud,'” he said, “and warrants application of the sophisticated-means enhancement.”
