In a recent court ruling, a suburban Chicago attorney named Jan R. Kowalski has been sentenced to over three years in federal prison for bankruptcy fraud. Kowalski, along with her brother, Robert M. Kowalski, engaged in a fraudulent scheme to conceal over $357,000 from creditors and the bankruptcy trustee. This scheme involved depositing cashiers’ checks, money orders, and other checks into her attorney trust account, which she then used for her brother’s benefit. Kowalski attempted to conceal the scheme through fabricated documents and false statements to the U.S. Bankruptcy Court. The funds involved in the fraud scheme have yet to be recovered, and Kowalski has been ordered to pay $357,492 in restitution.
Suburban Chicago Attorney Sentenced to More Than Three Years in Federal Prison for Bankruptcy Fraud
In a recent case that has shocked the legal community, a suburban Chicago attorney has been sentenced to more than three years in federal prison for her involvement in a bankruptcy fraud scheme. The attorney, Jan R. Kowalski, colluded with her brother, Robert M. Kowalski, to defraud creditors and conceal assets. This article will provide a comprehensive overview of the case, detailing the attorney’s fraudulent activities, attempted concealment, the status of the unrecovered funds, and the sentencing outcome.
Summary of the Case
Attorney’s involvement in fraud scheme
Jan R. Kowalski, a licensed attorney at the time, played a key role in a fraud scheme with her brother, Robert M. Kowalski. The scheme involved concealing more than $357,000 from creditors and the bankruptcy trustee in Robert’s bankruptcy case.
Concealment of assets
When Robert Kowalski filed for bankruptcy, he possessed cashier’s checks totaling hundreds of thousands of dollars that were rightfully the property of his bankruptcy estate. Jan Kowalski aided her brother in concealing these checks, as well as money orders and other checks, by depositing them into her attorney trust account, also known as an IOLTA account.
Fabrication of documents
Upon the discovery of the IOLTA account activity by the bankruptcy trustee, Jan Kowalski attempted to conceal the fraudulent scheme by fabricating documents. She also made materially false statements to the U.S. Bankruptcy Court in an effort to hide her involvement.
To date, the funds that were concealed through the fraud scheme have yet to be recovered. This has dealt a significant blow to the bankruptcy estate and the creditors who were entitled to those funds.
Guilty plea and sentencing
Jan Kowalski, aged 59 and a resident of LaGrange, Illinois, pleaded guilty to a federal charge of concealing assets from a bankruptcy trustee. As a result, she has been sentenced to 37 months in federal prison. In addition to the prison term, U.S. District Judge Virginia M. Kendall ordered Kowalski to pay $357,492 in restitution, reflecting the amount she helped her brother conceal from creditors.
The Fraud Scheme
Collaboration with co-defendant brother
Jan Kowalski collaborated with her brother, Robert M. Kowalski, in orchestrating the bankruptcy fraud scheme. The siblings worked together to conceal assets and defraud creditors through fraudulent activities.
Concealing cashier’s checks
One of the key methods employed in the fraud scheme was the concealing of cashier’s checks. After Robert Kowalski filed for bankruptcy, he had access to a significant amount of money in the form of these checks. Jan Kowalski assisted him in hiding these checks from creditors and the bankruptcy trustee.
Depositing funds into attorney trust account
To further obscure the existence of the funds, Jan Kowalski deposited the concealed cashier’s checks, money orders, and other checks into her attorney trust account. By commingling the fraudulent funds in this manner, she made it difficult for the bankruptcy trustee to trace and recover the assets.
Cash withdrawals and real estate transactions
Jan Kowalski facilitated the withdrawal of a portion of the concealed funds in cash. These cash withdrawals and other transactions, such as real estate transactions, served to benefit her brother, Robert Kowalski. This allowed him to enjoy the illicit funds while evading the scrutiny of creditors and the bankruptcy trustee.
Discovery of the IOLTA account activity
The fraud scheme began to unravel when the bankruptcy trustee discovered the suspicious activity in Jan Kowalski’s IOLTA account. This discovery set in motion a series of investigations and legal proceedings that ultimately exposed the extent of the fraudulent activities.
Fabrication of documents
In an attempt to cover up the fraudulent scheme, Jan Kowalski resorted to fabricating documents. These falsified documents were intended to mislead both the bankruptcy trustee and the U.S. Bankruptcy Court. Through these deceptive actions, she sought to create the illusion that the concealed funds were legitimate and were not being illegally hidden.
False statements to the Bankruptcy Court
In addition to fabricating documents, Jan Kowalski also made materially false statements to the U.S. Bankruptcy Court. By providing false information and misleading the court, she hoped to divert attention away from her role in the bankruptcy fraud scheme.
Status of funds concealed through the fraud scheme
Despite the legal proceedings and the guilty plea of Jan Kowalski, the funds that were concealed through the bankruptcy fraud scheme have yet to be recovered. This has left creditors and the bankruptcy estate in a highly disadvantageous position, as they are unable to access the funds that were rightfully theirs.
Prison term of 37 months
Due to her involvement in the bankruptcy fraud scheme, Jan Kowalski has been sentenced to 37 months in federal prison. The severity of this sentence reflects the seriousness of her criminal activities and the extent of the harm caused to creditors and the bankruptcy estate.
Restitution of $357,492
In addition to the prison term, U.S. District Judge Virginia M. Kendall ordered Jan Kowalski to pay $357,492 in restitution. This amount represents the funds that she helped her brother conceal from creditors and the bankruptcy trustee.
Announcement and Representation
Acting United States Attorney for the Northern District of Illinois
The sentencing outcome was announced by Morris Pasqual, the Acting United States Attorney for the Northern District of Illinois. This announcement signifies the conclusion of a lengthy legal process and demonstrates the commitment of the U.S. Attorney’s Office to pursuing justice in cases of bankruptcy fraud.
Special agents and inspectors involved
The investigation into the bankruptcy fraud scheme involved the dedicated efforts of special agents and inspectors from various government agencies. These individuals played a crucial role in collecting evidence, building a case against Jan Kowalski, and facilitating the legal proceedings.
Assistance from the U.S. Trustee Program
The U.S. Trustee Program provided valuable assistance throughout the investigation and legal proceedings surrounding the bankruptcy fraud scheme. This program played an important role in ensuring that the interests of creditors and the bankruptcy estate were protected to the fullest extent possible.
Role in bankruptcy fraud scheme
Jan Kowalski’s brother, Robert M. Kowalski, was also implicated in the bankruptcy fraud scheme. He played a significant role in orchestrating the fraudulent activities alongside his sister, and as a result, he has faced criminal charges.
Additional embezzlement and tax fraud offenses
Evidence presented during Robert Kowalski’s trial revealed that he had engaged in additional criminal activities beyond the bankruptcy fraud scheme. He was found guilty of embezzlement and tax fraud offenses, further underscoring the extent of his criminal behavior.
Association with former bank president and embezzlement scheme
Robert Kowalski’s close association with John Gembara, the former President of Washington Federal Bank for Savings, raised further concerns about his criminal activities. It was revealed that Gembara and Kowalski were involved in an embezzlement scheme at the bank, contributing to its eventual failure.
Other Defendants and Investigation
Charges against high-ranking former bank employees
As part of the broader federal criminal investigation into the failure of Washington Federal Bank for Savings, several high-ranking former bank employees were charged with various offenses. These individuals, alongside Jan and Robert Kowalski, formed a network of individuals engaging in fraudulent activities that led to the bank’s downfall.
Federal criminal investigation into the bank’s failure
The failure of Washington Federal Bank for Savings prompted a federal criminal investigation into the circumstances surrounding this event. This investigation aimed to uncover the full extent of the fraudulent activities, hold the responsible parties accountable, and prevent similar incidents from occurring in the future.
Northern District of Illinois U.S. Attorney’s Office contact details
For any inquiries or information regarding the case discussed in this article, please contact the Northern District of Illinois U.S. Attorney’s Office. The office can provide further details and address any concerns related to the bankruptcy fraud scheme and its legal proceedings.
In conclusion, the sentencing of Jan Kowalski for her involvement in a bankruptcy fraud scheme further highlights the importance of upholding the integrity of the legal profession. The case serves as a stark reminder that attorneys hold a position of trust and are expected to act in the best interests of their clients and the legal system. The comprehensive investigation into the fraud scheme, along with the cooperation of multiple government agencies, demonstrates the commitment to justice and accountability. Moving forward, it is crucial for all members of the legal community to uphold the highest standards of professionalism and ethical conduct.