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Richard Kaufman gets prison time, must pay $1.4M restitution

Rochester Business Journal
July 28, 2014

Convicted of bank and loan fraud in April, former RAK Industries official Richard Kaufman drew a 46-month prison term and was ordered to pay $1.4 million in restitution last week.

Kaufman, 47, and his father, Michael Kaufman, 72, fed doctored financial statements to Key Bank N.A. to obtain loans and using the borrowings to pay for personal luxuries including expensive homes and country club memberships.

Also convicted in April along on charges of fraud and diverting money that should have gone to the bank to pay off the fraudulently obtained loans, the elder Kaufman awaits sentencing. 

A dba of American Industrial Sales Corp. that sold highway-safety products, RAK Industries was taken over by Key Bank.

In loan applications made to the bank on RAK’s behalf from 2002 to 2007, Michael Kaufman claimed to be personally worth more than $4 million while Richard Kaufman claimed net worth topping $2.5 million. Most of the value they claimed was fictitious, Rochester FBI agent Kevin Black states in court papers. 

In a 2008 bankruptcy filing, Richard Kaufman stated his net worth as negative, declaring $100,000 in red ink.  

While RAK was under Key Bank’s control, the father and son spent $53,000 of the firm’s receivables on themselves, costing the bank some $1.5 million, U.S. Attorney William Hochul said. 

The father’s and son’s criminal convictions came six years after RAK Industries agreed to pay $375,000 to settle sexual harassment charges brought by the federal Equal Employment Opportunity Commission on behalf of 18 female employees.

In the sexual harassment case, the EEOC accused the Kaufmans and other male RAK employees of groping and making unwanted sexual advances to women workers and threatening to retaliate against those who resisted. 
(c) 2014 Rochester Business Journal. To obtain permission to reprint this article, call 585-546-8303 or e-mail

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