Former Cumberland Man Pleads Guilty to Bank Fraud and Tax Evasion Charges
|U.S. Attorney’s Office February 04, 2014|
PORTLAND, ME—United States Attorney Thomas E. Delahanty, II announced that Walter Scott Fox, 56, formerly of Cumberland, Maine, and now of Canton, Georgia, pleaded guilty in U.S. District Court to bank fraud and tax evasion charges.
According to court documents, from 1995 until 2011, Fox used his position as a loan officer at Casco Northern Bank and at its successor, KeyBank, to originate or authorize more than $14,000,000 in fraudulent loans and lines of credit using the identities of four real individuals, without their knowledge or consent. He used more than $5,800,000 of the fraudulent proceeds to keep the loans current and prevent the detection of his scheme. He used almost $8,200,000 for personal expenses including to pay for his children’s educations and family vacations and to support his business, “The Boathouse.” Fox failed to report receiving any of this income to the Internal Revenue Service (IRS), causing a tax loss of more than $1,300,000 between 2006 and 2011.
The scheme was discovered in 2012 when KeyBank denied an increase for one of the credit lines because it did not fit the model for its community development loans. With no funds available to make payments and keep the scheme afloat, all the fraudulent loans became delinquent by August 2012. Fox abruptly resigned his position at KeyBank on September 7, 2012, when a supervisor became concerned about the delinquent loans and made inquiries about the status of his loan portfolio.
Fox faces a sentence of up to 30 years of imprisonment and a fine of up to twice the gain or loss on the bank fraud charge and up to five years and a fine of up to twice the loss on the tax evasion charge. He will be sentenced after the completion of a presentence investigation report by the United States Probation Office.
The case was investigated by the Federal Bureau of Investigation and IRS-Criminal Investigations.