More defendants have been added to an ongoing prosecution in which several key stakeholders managed to tank a Chicago bank by embezzling millions in funds. The Washington Federal Bank for Savings failed in 2017 after the Office of the Comptroller determined that the bank was insolvent. Four new defendants have been added to the case for the theft of over $23 million in bank money. Do they face the same sorts of penalties as those who rob banks by force? No. In this article, we will discuss the charges they are likely to face.
Why Was the Bank Shut Down?
The bank was shut down after the Office of the Comptroller determined that the bank had $66 million in nonperforming loans. What is a nonperforming loan? Essentially, it is a loan in which the borrower has not made a payment in some time. Hence, the loan has been in default for a while. It is believed that the executives, including the CFO and treasurer, floated themselves major loans and transferred bank funds without the required documentation. Those who were on the receiving end of these funds are facing charges. Those who were in charge of overseeing the bank funds are also facing charges. Those who falsified bank records to ensure that the embezzlement was not discovered are also facing charges.
Aside from falsifying bank records, the funds from the bank appear to have gone to pay credit accounts for several of the bank’s higher-ups. It is unclear what, if any, purpose the bank served other than to act as a cash cow for the bank’s executives.
Charges the Defendants are Facing
All 10 named defendants are facing charges related to conspiracy to embezzle funds from the bank. Further, several of the bank’s executives are facing charges of tax fraud, bankruptcy fraud, forgery, and conspiracy to defraud creditors.
Essentially, the entire case revolves around what happens to the debts incurred by the bank. The individual men and women who were involved with the bank appear to have created the entity to serve this embezzlement conspiracy. The bank took on major liabilities by providing loans to major executives and their cronies without the intention to ever repay the loan. The liability is then the property of the bank. The bank takes on these debts, fails, and because the bank is a separate entity, the debts of the individuals can be wiped out. However, because this is such an obvious way to steal money, it can generally be caught quite quickly. In this case, it took the bank failing before anyone stepped in. While it is unlikely that those charged in the indictment will ever be able to repay the money they stole, they will pay for their theft with years, perhaps decades of their lives given the sheer value of the money taken. Prison sentences are linked to the amount of money in the embezzlement or fraud meaning that each of these defendants is likely facing a prison sentence of a decade or longer.
Talk to a Chicago Criminal Defense Attorney
If you have drained an FDIC bank of all its capital reserves, then you are going to need a Chicago criminal defense attorney. Call David Freidberg today at (312) 560-7100 and we can begin preparing your defense immediately.