A former VP for an Elmwood Bank pleaded guilty for $5.5 million business fraud. Jeffrey Gonsiewski, formerly a VP in the loan department at First Security Trust altered loan documents to make it appear customers’ payments were current when he knew they were actually overdue, preventing the bank from collection and delinquent loan procedures.
According to the FBI, the 56-year Gonsiewski tampered with–at minimum–100 loans signed-for by 50 of the banks customers.
The former bank exec entered a guilty plea for one count of bank fraud this week after being charged in July; sentencing is scheduled for December 3, and Gonsiewski faces a maximum 30-years prison sentence, $1 million in fines, and mandatory restitution for the money lost by the bank.
In the written plea agreement, Gonsiewski authorized unsecured and under-secured loans over a 4 1/2-year period by falsely showing that the loans were covered by the customers collateral. The so-called collateral was either over-exaggerated in value, or a complete fabrication. The ex-VP also revised the loan’s terms and conditions to conceal loans that were overdue. This left the bank hanging with $2 million-plus in overdrawn accounts.
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