Eight Indicted in $53 Million Bank Fraud Scheme

Crime, Law and JusticeCrimeFinanceJobs and WorkplaceCompanies and CorporationsSterling Financial Corporation

A Federal Grand Jury sitting in Philadelphia has indicted 8 officers and employees of Equipment Finance, LLC., Lancaster County. Joseph M. Braas, Michael J. Schlager, Mary C. Stankiewicz, Misty L. Kroesen, Curtis A. Kroesen, all from Lancaster County and John Wiley Spann, Harold W. Young and John S. Tomberlin, all from Alabama were indicted with conspiracy to commit mail fraud and mail fraud, all arising out a massive, sophisticated load fraud scheme that resulted in a loss of $53 million.

EFI was a logging industry lender that was based in Lititz, Lancaster County. In March 2002, EFI was acquired by Sterling Financial Corporation. Subsequently EFI became a wholly owned subsidiary of the Bank of Lancaster County, which in turn was a wholly owned subsidiary of Sterling.

It is alleged in the indictment that as far back as 2001, before EFI was acquired by Sterling, the defendants, which include five former EFI employees, were engaging in a systematic fraud at EFI. From 2001 through 2007, they are charged with colluding in a pervasive scheme to steal money by looting the accounts of EFI and falsifying EFI's books. Joseph Braas, EFI's Chief Operating Officer and Michael Schlager, a Senior Vice-President, are alleged to have been the leaders of the conspiracy. They directed other employees of the company, including Mary C. Stankiewicz, Misty L. Kroesen and Curtis A. Kroesen to make false entries in EFI's books, create false documents for EFI's files, and undermine the audit process conducted by Sterling's inside and outside auditors. During the years of the conspiracy, the EFI employee defendants made EFI appear more profitable than it actually was and made it appear that EFI was exposed to less risk than it was, and thereby succeeded in keeping their jobs, making increasingly higher salaries and bonuses, and continuing to obtain funding for EFI from Bank of Lancaster County and its other creditors.

Those indicted will be forced to return any monies they received as a result of the scheme. In addition, any and all property owned by the defendants will be seized by the government.

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