A federal jury in Chicago convicted two real estate developers for participating in a conspiracy that embezzled millions of dollars from the failed Washington Federal Bank for Savings.
Washington Federal, which was based in Chicago’s Bridgeport neighborhood, was shut down in 2017 after the Office of the Comptroller of the Currency determined the bank was insolvent and had at least $66 million in nonperforming loans. For more than a decade, developers Miroslaw Krejza and Marek Matczuk were part of a conspiracy that embezzled millions of dollars in bank funds. The embezzled funds were disguised as purported real estate development loan disbursements to Krejza, Matczuk, and others. The conspirators were not required to repay these purported loans, and they never did.
Krejza, 65, of Chicago, and Matczuk, 60, of Park Ridge, Ill., were convicted of conspiring to commit embezzlement and falsify bank records, as well as aiding and abetting embezzlement by bank employees. The jury returned the verdicts after a three-week trial in federal court in Chicago. U.S. District Judge Virginia Kendall did not immediately set sentencing dates.
The federal investigation into the collapse of Washington Federal led to criminal charges against 16 defendants, including the bank’s chief financial officer, treasurer, and other high-ranking employees, for conspiring to embezzle at least $31 million in bank funds. Krejza, Matczuk, and two others were convicted after jury trials, while 10 defendants pleaded guilty and two entered into deferred prosecution agreements.
Much of the embezzled money was transferred to Chicago attorney Robert Kowalski and other individuals outside the bank without all of the required documentation and often without any documentation whatsoever. A jury earlier this year convicted Kowalski on bankruptcy fraud, bank embezzlement, and false statement charges. His sentencing is set for Jan. 23, 2024. Kowalski’s sister, Jan Kowalski, also an attorney, pleaded guilty and was sentenced in June to more than three years in prison for fraudulently enabling her brother to conceal more than $357,000 from creditors and the trustee in his bankruptcy case.
In August, three former members of Washington Federal’s Board of Directors pleaded guilty to conspiring to falsify bank records to deceive the OCC. William Mahon, George Kozdemba, and Janice Weston will be sentenced in December.
Last year, Chicago attorney Patrick Thompson was convicted of making false statements to the Federal Deposit Insurance Corp. regarding the amount of money he received from Washington Federal via a purported loan and other unsecured payments. Thompson was also convicted of filing tax returns in which he falsely deducted interest that he had not actually paid to Washington Federal.