Bank Shot

The Illinois Administrator has filed a complaint alleging misconduct that had led to a criminal conviction described in a press release from the United States Attorney for the Northern District of Illinois

A former attorney has been sentenced to 25 years in federal prison for embezzlement and fraud in connection with the failure of Washington Federal Bank for Savings in Chicago.

ROBERT M. KOWALSKI served a key role in an embezzlement scheme at Washington Federal.  The bank, which was based in Chicago’s Bridgeport neighborhood, was shut down in 2017 after the Office of the Comptroller of the Currency determined that it was insolvent and had at least $66 million in nonperforming loans.  Much of the money was transferred to Kowalski, who at the time was a licensed attorney, and two real estate developers without all of the required documentation and often without any documentation whatsoever.  The embezzled funds were falsely identified in the bank’s records as loan disbursements, even though the bank never required Kowalski to repay the money.

After the collapse of the bank, the Federal Deposit Insurance Corp. attempted to collect the money and properties that Kowalski obtained as part of the embezzlement scheme.  Kowalski responded by filing a fraudulent bankruptcy case, in which he attempted to conceal his possession of numerous assets.  To substantiate numerous misrepresentations in his bankruptcy filings and avoid paying taxes, Kowalski filed false corporate and personal tax returns for several years.  He also failed to file any returns at all for two years.

Kowalski, 62, of Robbins, Ill., was convicted last year of embezzlement, bankruptcy fraud, and tax fraud charges.  In addition to the prison term, U.S. District Chief Judge Virginia M. Kendall on Tuesday ordered Kowalski to pay restitution of $7.2 million to the FDIC and $424,047 to the IRS.

(Mike Frisch)