An Illinois man was sentenced to eighty-four months in prison for his role in a Ponzi scheme that caused victim losses exceeding $3 million. Francis Alan Schimitz, 60, of Long Grove, Illinois, was arrested in May 2010 and charged with mail fraud after allegedly defrauding financial institutions out of millions of dollars in fraudulent loans. He pled guilty in March 2011 to a single count of defrauding financial institutions, which carried a maximum prison sentence of thirty years in prison. As part of his plea agreement, prosecutors agreed to seek a sentence in the range of 6 1/2 to 8 years.
Between 2003 and 2010, as the head of Long Grove Real Estate Partners, Schmitz falsely represented that he was the beneficiary of a multi-million dollar trust fund. Using this fictitious trust, Schmitz managed to secure several loans and lines of credit totaling $6 million from six banks, including Harris Bank and First Midwest Bank. Rather than use the proceeds of these loans to make investments as he pledged, Schmitz instead used the proceeds to make payments on existing and defaulted loans. Authorities estimated that total losses among the banks were approximately $3 million.
United States District Judge Rebecca Pallmeyer also ordered Schmitz to pay over $3 million in restitution to defrauded investors.
A Copy of the Plea Agreement can be found here.