Banking

Directors of stopped working Chicago bank plead guilty to defrauding the OCC

William Mahon, George Kozdemba and Janice Weston conspired to falsify bank records shown the Office of the Comptroller of the Currency, according to the pleas lodged in federal court.

Andrew Harrer/Bloomberg

Three previous board members of Chicago’s stopped working Washington Bank for Savings have actually pleaded guilty to attempting to trick the bank’s regulator to hide widespread embezzlement.

William Mahon, George Kozdemba and Janice Weston conspired to falsify bank records shown the Office of the Comptroller of the Currency, according to the pleas lodged in federal court for the Northern District of Illinois this month.

The pleas are the most recent legal relocations in a yearslong case that comes from Washington Federal’s failure in December 2017, soon after regulators found out the bank was insolvent and bring a minimum of $66 million in nonperforming loans. Since then, federal authorities have actually charged 16 high-ranking previous staff members of the bank with criminal activities varying from scams to conspiring to embezzle $31 million in bank cash.

After the Office of the Comptroller of the Currency started to examine the bank’s loan portfolio prior to its failure, Mahon, Kozdemba and Weston made incorrect entries in bank records in an effort to block the company’s assessment, according to a declaration from the United States Attorney’s Office for the Northern District of Illinois provided after the pleas were gone into.

“They also falsified records to make it appear Washington Federal was operating in compliance with banking rules and internal policies and controls,” the U.S. lawyer’s workplace stated in the declaration.

The directors offered inaccurate details on a variety of subjects, consisting of loan approvals, loan maturity dates and customer identities, according to the indictment of 14 accuseds bied far in 2021.

Sentencing hearings are set for October and December, where Mahon, Kozdemba and Weston might each get as much as 5 years in jail, according to the U.S. lawyer’s workplace. Mahon is likewise dealing with an extra 3 years for the willful filing of incorrect tax return.

Attorneys for the accuseds did not right away react to ask for remark.

Washington Federal’s previous accounting company, Bansley & Kiener, in 2020 consented to pay $2.5 million to the Federal Deposit Insurance Corp. to fix claims that it was accountable for the bank’s collapse. Jan Kowalski, another offender in the event, got 3 years in jail for scams associated to the bank failure previously this year.

Prior to its failure, Washington Federal Bank had about $166 countless properties, $144 countless deposits and 2 branches in the working-class Bridgeport community of Chicago.

Gabriel

A news media journalist always on the go, I've been published in major publications including VICE, The Atlantic, and TIME.

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