Benjamin Reichel, Mail Fraud, Tennessee 2021

CHATTANOOGA, Tenn. – In a shocking turn of events, a former public claims adjuster has been sentenced to serve time behind bars for orchestrating a mail fraud scheme that left numerous innocent victims in the dark.

Bennjamin Reichel, 55, was sentenced to 54 months in prison, followed by three years’ supervised release, by the Honorable Curtis L. Collier, in the United States District Court for the Eastern District of Tennessee at Chattanooga on August 4, 2021.

Reichel, who operated a Chattanooga-area business known as Loss Recovery Specialists (“LRS”), was accused of fraudulently diverting client funds for personal gain. According to court records, LRS held itself out to be a public claims adjuster licensed by the State of Tennessee to negotiate with insurance companies on behalf of homeowners and others who had suffered property damage.

When homeowners reached out to Reichel for help, he would allegedly use the funds to pay for personal expenses, such as a babysitter, massages, the lease on an Audi, personal vacations, and a swimming pool. The United States argued at sentencing that Reichel’s scheme impacted a number of innocent victims.

As part of a negotiated plea agreement, Reichel pleaded guilty to felony mail fraud charges in November 2020. The charges resulted from an investigation conducted by the Federal Bureau of Investigation, the United States Postal Inspection Service, the Cleveland Police Department, and other local law enforcement agencies.

Reichel will be required to make restitution of over $850,000 to his victims. Assistant U.S. Attorney Kyle J. Wilson represented the United States in this case.

The harsh sentence handed down to Reichel serves as a stark reminder of the serious consequences of engaging in white-collar crime. His actions not only financially harmed his victims but also eroded public trust in the public claims adjustment industry.

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