Beth Zastawny, Bank Fraud, Massachusetts 2015

Beth Zastawny, 53, of Ludlow, Massachusetts, admitted in federal court yesterday to orchestrating a $4.2 million bank fraud scheme that gutted Blue Hills Bank and left a trail of deception across Western Massachusetts. Facing a packed courtroom in Springfield, Zastawny pleaded guilty to one count of bank fraud and three counts of money laundering — charges that could land her behind bars for decades.

The fraud centered on Diecast Connections Company Inc., a Chicopee-based business owned and operated by Zastawny. In January 2015, she secured a $4.2 million loan package from Blue Hills Bank by submitting falsified financial statements and fabricating the company’s assets and liabilities. The documents painted a false picture of financial health, convincing the bank to release funds based on lies.

Once the money hit the accounts, Zastawny diverted the proceeds to pay undisclosed creditors and for other unauthorized purposes — a direct violation of the loan agreement. None of the transactions were disclosed to the bank, and investigators say she used the funds to plug financial holes while pretending the business was thriving.

By July 2016, the house of cards collapsed. Blue Hills Bank foreclosed on the loan after Zastawny failed to meet repayment terms, resulting in a substantial financial loss for the institution. Federal investigators say the bank was blindsided, having relied entirely on Zastawny’s forged records and false assurances.

Now, Zastawny faces up to 30 years in prison for the bank fraud charge alone, plus an additional 10 years for each money laundering count. Each comes with potential fines up to $1 million for the fraud and $250,000 per laundering count — or twice the value of the criminal gain, whichever is greater. Sentencing is scheduled for October 1, 2019, before U.S. District Court Judge Mark G. Mastroianni.

The case was announced by United States Attorney Andrew E. Lelling and Kristina O’Connell, Special Agent in Charge of the IRS Criminal Investigation in Boston. Assistant U.S. Attorney Alex J. Grant of Lelling’s Springfield Branch Office is prosecuting. The fallout underscores how one person’s greed can undermine financial institutions and rip through local economies — and now, Zastawny will answer for it in federal court.

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