Federal prosecutors are accusing a former MetLife broker of defrauding a widow of $250,000 from a compensation settlement she received after her husband died in the terrorist attacks on September 11, 2001, according to an indictment unsealed in U.S. District Court in Brooklyn yesterday. The defendant, Kevin Dunn, pleaded not guilty.

Mr. Dunn and the widow, whose name was not released, were close friends, according to prosecutors. When she received her husband’s death benefit of nearly $2 million, the widow approached Mr. Dunn to discuss life insurance and other investing options, according to the indictment. Mr. Dunn then established a brokerage and annuity account for her with his firm.

Over the next several years, he allegedly told the woman there were problems with her account and convinced her to withdraw money and send him a blank check so he could fix the paperwork and re-deposit the money. Instead, Mr. Dunn made the checks out to himself and deposited the money into his personal bank accounts, prosecutors say.

Mr. Dunn was fired from MetLife in February, but continued to work with the widow, the indictment says.

The woman, whose husband was a Port Authority police officer, received about $2 million from the September 11th Victim Compensation Fund. The average amount of compensation paid to the families is $1.78 million, according to the U.S. Department of Justice.

The Securities and Exchange Commission also filed a civil lawsuit against Mr. Dunn in the federal court yesterday.