Joseph A. Foistner, Multi-Million Dollar Fraud Scheme, New Hampshire 2021

CONCORD – Joseph A. Foistner, 68, of Mont Vernon, was sentenced to 48 months in federal prison for his involvement in a fraud and money laundering scheme, announced United States Attorney Jane E. Young today.

Following a two-week trial in December 2021, U.S. District Judge Paul Barbadoro found Foistner guilty of four counts of bank fraud, as well as charges of wire fraud, money laundering, and making misrepresentations during bankruptcy proceedings.

According to exhibits and witness testimony during the trial, Foistner used fraudulent means to apply for over $8 million in loans from five different financial institutions, laundered money, and made material misrepresentations during bankruptcy proceedings between 2015 and 2018. Foistner, at the time of the scheme, was a licensed attorney in Massachusetts who did not have any paying clients and earned no income through his law firm.

In order to obtain millions of dollars in loans from multiple financial institutions, Foistner provided banks with misleading documents that suggested that he was operating a lucrative law firm. For example, he claimed that he was a “seasoned attorney” with international clients and that his firm earned over a million dollars in annual income. In fact, all the firm’s purported income was based upon bogus, unpaid invoices the firm submitted to entities that the defendant controlled, including bankrupt entities.

The defendant also made other false statements to obtain bank loans, including lying about whether he was involved as a party in any lawsuits and denying that he had an interest in other companies. He also falsely represented that he had a salary by mischaracterizing loan proceeds as a salary. In one of the bank fraud schemes, the defendant submitted false information to obtain a loan by claiming that his wife was earning over $200,000 per year as a paralegal.

The evidence further showed that Foistner committed several crimes during Chapter 7 bankruptcy court proceedings in 2017 and 2018. He made false representations by denying that he held or controlled property owned by others when he actually controlled funds that were held in the name of a business. He also made false statements under oath by lying about what happened to the proceeds of one of the fraudulent loans and lying about not knowing the location of a piece of real estate that had been purchased in part with funds he borrowed and had subsequently funneled into bank accounts not in his name.

After his conviction, Foistner was disbarred by order of the Massachusetts Supreme Judicial Court in January 2022.

The financial institutions affected by Foistner’s scheme were Merrimack Valley Credit Union, North American Savings Bank, Celtic Bank, Newtek, and St. Mary’s Bank. A further hearing will be held to determine the restitution amounts owed by Foistner.

“As the evidence at trial established, Foistner used brazen fraud schemes to obtain millions of dollars and undermined the integrity of bankruptcy proceedings by making repeated misrepresentations,” said U.S. Attorney Young. “His illegal conduct was even more disturbing because he was a licensed attorney – an officer of the court. This substantial prison sentence finally holds Foistner accountable for his serious crimes and sends a deterrent message to potential white-collar criminals that they will be prosecuted to the fullest extent of the law and, upon conviction, will face serious prison sentences for their crimes.”

In addition to his prison sentence, Foistner was ordered to forfeit his interest in a residential property in Mont Vernon that was purchased with proceeds from his fraud scheme.

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