In a case that shines a light on the darker corners of the real estate and banking industries, Chicago real estate developer Miroslaw Krejza has been handed a prison sentence for his role in a substantial embezzlement scheme. As reported by the U.S. Attorney's Office, Northern District of Illinois, Krejza, 67, was sentenced to six years and eight months for conspiring to embezzle millions from the now-defunct Washington Federal Bank for Savings, once a fixture in Chicago's Bridgeport neighborhood. The developer was convicted alongside others for falsely representing bank funds as legitimate real estate development loan disbursements.
According to the press release from the U.S. Attorney's Office, the scheme contributed to the insolvency and eventual shutdown of Washington Federal in 2017, an institution hemorrhaging from at least $66 million in nonperforming loans. Not only was Krejza implicated in this fraudulent activity, he and his co-conspirators were not required to, and indeed did not repay the misappropriated funds.
U.S. District Judge Virginia M. Kendall, sentencing Krejza this past Tuesday, also ordered him to pay over $2 million in restitution. This sentencing follows a vigorous federal investigation into the bank's collapse, which led to criminal charges against a total of 16 individuals, including the bank's Chief Financial Officer and Treasurer. This investigation was a collaboration between various federal entities, with assistance from the U.S. Trustee Program, as per the U.S. Attorney's Office.
Chicago attorney Robert M. Kowalski was slapped with a 25-year federal prison sentence on charges including bankruptcy fraud and bank embezzlement, whereas real estate developer Marek Matczuk was convicted on related embezzlement and falsification charges, landing nearly 13 years behind bars. Robert's sister, Jan R. Kowalski, an attorney herself, pleaded guilty to charges of fraud and was sentenced to three years for abetting her brother in concealing assets, as detailed by the U.S. Attorney's Office. Three former Washington Federal Board of Directors members also entered guilty pleas, receiving varied prison terms for conspiring to falsify bank records. The prosecutors, led by Assistant U.S. Attorneys Michelle Petersen, Kristin Pinkston, Jeffrey Snell, and Special Assistant U.S. Attorney Brian Netols, have painted a grim portrait of the depths of collusion and deception that contributed to the bank's downfall.
