Man Sentenced to 35 Months’ Imprisonment for Bank Fraud and Money Laundering

James L. Santelle, the United States Attorney for the Eastern District of Wisconsin, announced that on Thursday, July 18, 2013, Judge Lynn Adelman sentenced James Scalzo, 46, of Kenosha, Wisconsin, to 35 months in prison for his role in a bank fraud and money laundering scheme. Scalzo was also ordered to serve three years’ supervised release following his prison term and to pay $200 in special assessments. Restitution is to be determined at a later date.

In January 2013, Scalzo pled guilty to a criminal information charging him with a bank fraud scheme, a violation of Title 18, United States Code, Section 1344, and money laundering in violation of Title 18, United States Code, Section 18 U.S.C. section 1956. Scalzo faced up to 30 years for the bank fraud offense and up to 20 years on the money laundering count.

Between April 1, 2008 and October 31, 2009, while employed as a bank officer at Fox River State Bank in Burlington, Wisconsin, and then Consumer’s Credit Union in Round Lake Beach, Illinois, Scalzo originated and approved multiple fraudulent loans. Scalzo then directed funds to be taken from the loans and transferred by cashier’s check or wire to accounts in which he had a personal interest. Some of the loan funds were applied against earlier loans in order to conceal the fraud. More than $1.4 million in loan funds was involved.

The case involved not only an abuse of the trust of the financial institutions that employed Scalzo but also caused personal and financial hardship to unknowing citizens. Among the victims was a couple whose home Scalzo had pledged as collateral for one of the fraudulent loans and then allowed to go into foreclosure.

The case was investigated by the Internal Revenue, Criminal Investigation and the Federal Bureau of Investigation. The case was prosecuted by Assistant United States Attorney Carol L. Kraft.