https://thesouthlandjournal.com/two-illinois-men-sentenced-for-conspiracy-to-commit-bank-fraud-bank-fraud-and-money-laundering/

Two Illinois men – Erik Richard Jones, 46, and Mitchell Allen Melega, 38 – were sentenced on July 23, 2024, to multi-year prison sentences following their convictions for conspiracy to commit bank fraud, bank fraud, and money laundering. Jones, of Colona, Illinois, was sentenced to 54 months of imprisonment to be followed by five years of supervised release, and Melega, formerly of Orion, Illinois, was sentenced to 75 months of imprisonment to be followed by five years of supervised release. Both defendants were also ordered to pay $4,840,944.63 in restitution.

At the sentencing hearing in front of U.S. District Judge James E. Shadid, the government presented evidence that between 2016 and 2017 Jones and Melega devised and executed a scheme to provide false documents to First Midwest Bank in Moline, Illinois, to induce the bank to provide loans to Colona-based I-80 Equipment for vehicle purchases and improvements. Jones, the owner of I-80 Equipment, and Melega, the controller, then diverted loaned funds to other unauthorized uses and directed other employees of the business to provide false information in support of the conspiracy and scheme to defraud. In addition, they diverted real estate loan proceeds advanced by Northwest Bank in Davenport, Iowa – which were intended to finance renovations to an apartment complex Jones purchased – to other uses, including paying off an unrelated loan for Jones’s family members and unrelated business expenses of I-80 Equipment.

Also at the sentencing hearing, Judge Shadid found the scheme – which involved both altering legitimate documents and completely fabricating false documents, included at least 110 vehicle purchases, and took place over an extended period of time – was particularly sophisticated.

Both men were charged in October 2020 in a twelve-count indictment. The charges were conspiracy to commit bank fraud, (Count 1); bank fraud (Counts 2 through 9); and money laundering (Counts 10 through 12). Jones pleaded guilty in September 2023 to all counts of the indictment, and Melega pleaded guilty in March 2024 to the same charges.

The statutory penalty for conspiracy to commit bank fraud is up to 30 years of imprisonment per count; for bank fraud the statutory penalty is up to 30 years of imprisonment per count; and for money laundering the statutory penalty is up to ten years of imprisonment per count.

“Our office is dedicated to prosecuting these serious financial crimes,” said U.S. Attorney Gregory K. Harris. “Actions like the defendants’ cause significant harm to banks and undermine the stability of our financial system. We are grateful to our federal and local law enforcement partners for their commitment to these investigations and cases.”

“The defendants in this case have been brought to justice for defrauding First Midwest Bank and using the obtained funds for unauthorized purposes,” said Special Agent in Charge Vincent R. Zehme, of the Federal Deposit Insurance Corporation Office of Inspector General (FDIC OIG), Chicago Region. “The FDIC OIG will continue working with our law enforcement partners to hold individuals accountable who commit such fraudulent offenses and threaten to undermine the integrity of our Nation’s banks.”

“This sentence should serve as a warning to any potential fraudsters who think they can defraud banks and get away with it,” said IRS Criminal Investigation (CI) Special Agent in Charge Thomas F. Murdock.  “The collective efforts of IRS CI, the FDIC-OIG, and the U.S. Attorney’s Office can follow the money trail and ensure those who engage in bank fraud and money laundering are vigorously investigated and brought to justice.”

“The FBI, working with our federal and state partners, will vigorously investigate to uncover the truth and deliver accountability anytime anyone defrauds U.S. banks,” said Special Agent in Charge Christopher Johnson. “The FBI remains committed to safeguarding our economic security from threats which could cause harm to American institutions.”

The Internal Revenue Service, Criminal Investigation Division; the Federal Deposit Insurance Corporation, Office of Inspector General; the Federal Bureau of Investigation, Springfield Field Office; and the Illinois Secretary of State Police investigated the case. Assistant U.S. Attorneys John Mehochko and Jennifer Mathew represented the government in the prosecution.