A Madison man, charged with defrauding a parcel delivery insurer out of more than $360,000 by filing false insurance claims on phantom packages, was arrested Thursday by federal authorities.

Scott Reaston, 40, an Australian who lives in Madison, was indicted last week in U.S. District Court, but the indictment remained under seal until his arrest Thursday morning outside a business in Madison, U.S. Attorney’s Office spokeswoman Myra Longfield said.

Reaston appeared briefly in court Thursday, but will be back in court Friday for a hearing to determine whether he’ll remain in custody while his case is pending after prosecutors requested that he be held.

The indictment alleges that Reaston submitted, under various names, $480,000 worth of claims to a St. Louis company called Brown & Brown of Missouri Inc., which offers a shipping insurance plan called the Parcel Insurance Plan (PIP). The insurance claims were for cellphones Reaston claimed to have sold online through Amazon Marketplace that were lost, damaged or shorted during delivery to customers.

The claims requested payment from PIP for the purported cost of the phones. PIP sent payments to Reaston totaling $364,183, according to the indictment.

Reaston is charged with seven counts of mail fraud, one count of wire fraud and two counts of money laundering. The case was investigated by the U.S. Postal Inspection Service and the Internal Revenue Service.

As part of the scheme, the indictment alleges, Reaston sent PIP counterfeit documents to substantiate the claims, including counterfeit invoices from cellphone retailers as proof of cost of the phones and counterfeit Amazon Marketplace purchase orders as proof of the sales. The indictment also states that Reaston fabricated email messages between himself and purported customers in which those customers wrote that they did not receive the cellphones they had ordered.

The money that Reaston received from PIP was deposited into the bank account of a person with whom Reaston was living, then transferred into Reaston’s own accounts or given to him by check. Reaston had told the roommate, the indictment states, that he was using the roommate’s name to sell phones and that certain customers had complained about not receiving the phones. He told the roommate that the money was insurance payments for the lost phones.

Reaston made the transactions between February 2013 and July 2015, while living in California and in Madison. He used two aliases for the transactions, and while living in Madison, he also used the names of his two roommates.

Reaston purchased PIP shipping insurance through the web postage retailer Stamps.com, which gives its customers the ability to buy PIP shipping insurance, according to the indictment.

Reaston faces up to 20 years in prison on each mail and wire fraud charge and up to 10 years in prison on each money laundering charge.

Ed Treleven is the courts reporter for the Wisconsin State Journal.