A Chicago attorney is amongst a group of 10 defendants that includes several former employees and executives of the defunct Washington Federal Bank for Savings who pled not guilty to charges that they conspired in a plot to embezzle tens of millions of dollars from the Windy City bank before it closed.
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Prosecutors say an ongoing federal criminal investigation into the failure of the bank revealed attorney Robert M. Kowalski and others conspired to embezzle at least $31 million from the bank over a 14 year span, from 2004 to 2018.
Both Robert and his sister, Jan Kowalski — an Illinois attorney who made an unsuccessful run for Cook County Clerk in 2018 — were originally charged in 2019 for allegedly concealing assets in his bankruptcy case.
Others charged by prosecutors include the bank’s former chief financial officer and treasurer Rosallie C. Corvite, former corporate secretary Jane V. Iriondo, loan servicer Alicia Mandujano and loan officer Cathy M. Torres, all of whom were indicted last August.
Last month, prosecutors charged four new defendants for their alleged role in the scheme— the bank’s ex-vice president James R. Crotty, real estate developers Boguslaw Kasprowicz and Miroslaw Krejza and contractor Marek Matczuk.
The bank’s former president, John F. Gembara, was also allegedly deeply involved in the scheme, although he’s identified only as “Individual A” in the indictment. Gembara committed suicide in December 2017 and was never charged.
Prosecutors claim Kowalski, Kasprowicz, Krejza, Matczuk and another unnamed individual received tens of millions in embezzled funds under the guise of Washington Federal loans, although records show those “loans” were never properly documented or repaid.
The funds were used for both expenses and leisure purchases. Some of these include real estate taxes and litigation expenses, as well as efforts to develop property in Chicago, according to the indictment. Kowalski and Kasprowicz also allegedly used nearly $2 million in embezzled funds to benefit Gembara, paying credit card bills and funding the purchase of a $450,000 powerboat called “Expelliarmus.”
The other former employees and executives of the bank are charged with falsifying records to conceal the scheme from federal regulators, “by materially understating the number of delinquent and nonperforming loans, inflating Washington Federal’s income, and inflating the value of the collateral securing Washington Federal’s loans,” prosecutors say.
Washington Federal closed in December 2017. According to the indictment, as its receiver, the Federal Deposit Insurance CORP (FDIC) had to pay out roughly $90 million to make the bank’s account holders whole in the wake of its collapse.
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