Man Arrested for Allegedly Obtaining Loan by Fraud

admin —  May 10, 2010 — 1 Comment

Francis Alan Schmitz, also known as “F. Alan Schmitz,”58, Long Grove, Illinois, was arrested on federal charges alleging that he fraudulently obtained a $2.85 million bank line of credit year resulting in a loss of approximately $2.4 million. The defendant, Francis Alan Schmitz, a former bank executive, allegedly provided false financial information in seeking bank funds to purchase real estate but, instead, used most of the money for his own personal benefit, including to pay other debts.

According to the complaint affidavit, Schmitz, was a vice president and manager of building/administrative services at Northern Trust Company until about 1996, and more recently has represented himself to be managing partner of Long Grove Real Estate Partners, LLC, and the president of F. Alan and Associates, Inc. He filed a voluntary bankruptcy petition in December.

In early 2009, Schmitz worked with a loan broker to obtain a $2.85 million line of credit that he allegedly falsely represented would be used to make deposits on 11 investment properties in Long Grove, Illinois. Schmitz pledged $5.375 million in purported trust assets as collateral, and represented a net worth of $6,332,618, with $5,595,000 in liquid assets, the charges allege. Between January and April 2009, Schmitz provided periodic account statements for the purported trust, a personal financial statement, and personal and trust income tax returns for two years to First Midwest Bank, which extended the line of credit based on Schmitz’s representations of his financial condition.

The trust account statements that Schmitz provided to the bank purported to be issued by a trust company in Florida, but, in fact, was nothing more than a “virtual office,” whose mail and purported web site were traced to a mail drop facility that Schmitz used in Arlington Heights, Illinois, according to the affidavit. The personal financial statement that he provided allegedly failed to disclose at least four outstanding bank loans totaling more than $3.3 million, and stated that his gross annual salary was $275,000 (his purported tax returns listed more than $300,000 in total income), while his bankruptcy petition listed his total employment income as only $15,000 in 2007, $16,626 in 2008, and $14,000 in 2009.

Schmitz allegedly caused the entire $2.85 million line of credit to be disbursed almost immediately upon its approval, with $350,000 of the proceeds placed in escrow to pay interest and approximately $59,000 applied to broker and bank fees. The remaining $2,440,850 was transferred to a business bank account he controlled. Within days, Schmitz allegedly wire transferred $1,630,274 to Inland Bank & Trust to pay on a defaulted loan and he used another $40,200 to pay past due rent. He used another $20,000 to pay a civil judgment and transferred approximately $380,000 to his personal bank account, the charges allege.

About two weeks after First Midwest Bank provided Schmitz with the line of credit, the bank discovered that the trust assets pledged as collateral were non-existent, the complaint states.

The government is being represented by Assistant U.S. Attorney Edward Kohler.

Mail fraud carries a maximum penalty of 30 years in prison, a $1 million fine, and mandatory restitution. The Court may also impose a fine totaling twice the loss to any victim or twice the gain to the defendant, whichever is greater. If convicted, the Court must impose a a reasonable sentence under the advisory United States Sentencing Guidelines.

A complaint contains only charges and is not evidence of guilt. The defendant is presumed innocent and is entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.



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One response to Man Arrested for Allegedly Obtaining Loan by Fraud

  1. The piece of garbage who defrauded not only banks but charities and individual investors refused to come out of cell at the MCC to be sentenced. The Federal Judge ordered Fat Al to come to Court on December 3 or be forcibly brought to Court to be sentenced.

    Don’t worry Al your dance card will be full for the next 10 years old Bubba and Leroy can’t wait for your virgin a@@ at Marion. Your wife will be turning tricks just to pay off the taxes she will owe.

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