In Chicago, a federal judge sentenced Miroslaw Krejza, a real estate developer, to more than six years in prison for his involvement in a conspiracy that embezzled several million dollars from the now-defunct Washington Federal Bank for Savings. Located in Chicago’s Bridgeport neighborhood, Washington Federal was shuttered in 2017 due to insolvency, failing to cover at least $66 million in nonperforming loans.
Krejza, aged 67, was implicated in the misuse of funds along with other conspirators, disguising embezzled money as real estate development loan disbursements they were not obligated to repay. A federal jury convicted Krejza in 2023 of conspiracy to commit embezzlement, falsifying bank records, and aiding and abetting the embezzlement by bank employees. U.S. District Judge Virginia M. Kendall sentenced him to six years and eight months in prison with an order to pay over $2 million in restitution.
Andrew S. Boutros, U.S. Attorney for the Northern District of Illinois, announced Krejza's sentence with contributions from Vincent R. Zehme of the FDIC Office of Inspector General, Douglas S. DePodesta of the FBI, and several other agencies. The U.S. Trustee Program provided valuable assistance, while prosecution was led by Assistant U.S. Attorneys Michelle Petersen, Kristin Pinkston, and Jeffrey Snell, alongside Special Assistant U.S. Attorney Brian Netols.
The investigation into Washington Federal's collapse charged 16 individuals, including the bank's high-ranking employees, with embezzling a minimum of $31 million. Krejza and three others faced convictions after jury trials. Of the remaining defendants, ten pleaded guilty, and two accepted deferred prosecution agreements.
Among those involved, Robert M. Kowalski, an attorney, and Marek Matczuk, a real estate developer, received vast sums of embezzled money without proper documentation. Kowalski faced a jury conviction for bankruptcy fraud, bank embezzlement, and tax charges, resulting in a 25-year prison sentence. Matczuk received a nearly 13-year sentence for conspiracy to commit embezzlement.
Kowalski’s sister, Jan R. Kowalski, also an attorney, was sentenced to over three years in prison after pleading guilty to enabling her brother's concealment of over $357,000 from creditors and the bankruptcy trustee.
Three former members of Washington Federal's Board of Directors admitted to conspiring to falsify bank records to deceive the OCC. William M. Mahon received an 18-month sentence, George F. Kozdemba a year, and Janice M. Weston three months.