A LaGrange attorney was sentenced to more than three years in prison Tuesday for engineering a bankruptcy fraud scheme with her brother.
Jan R. Kowalski, 59, pleaded guilty in 2022 to a federal charge of concealing assets from a bankruptcy trustee. As part of the plea deal, Kowalski signed off on a 37-month prison term as well as $357,492 in restitution.
Prosecutors alleged that Kowalski fraudulently enabled her brother Robert M. Kowalski, 61, to conceal more than $357,000 from creditors and the trustee in his bankruptcy case starting in 2018. According to court documents, when Robert Kowalski filed for bankruptcy, he possessed hundreds of thousands of dollars in cashier’s checks payable to himself but which were the property of his bankruptcy estate. As part of the scheme, Jan Kowalski helped her brother conceal the cashier’s checks, as well as money orders and other checks, by depositing them into her attorney trust account, according to a release from the U.S. Attorney’s Office for the Northern District of Illinois. Then, she would withdrew a portion of the funds in cash or for use in, among other things, real estate transactions for her brother’s benefit.
When the bankruptcy trustee discovered the account activity, Jan Kowalski attempted to further conceal the scheme by fabricating documents and making materially false statements to the U.S. Bankruptcy Court, the release states. The funds concealed through the fraud scheme have yet to be recovered.
Earlier this year, Robert Kowalski was convicted for his role in the bankruptcy fraud scheme with his sister, as well as additional embezzlement and tax fraud offenses, according to the release. During the trial, prosecutors presented evidence that Robert Kowalski was a close associate of John Gembara, the former President of Washington Federal Bank for Savings, and that Robert Kowalski played a key role in an embezzlement scheme at the bank. Washington Federal was based in Chicago’s Bridgeport neighborhood until it was closed in December 2017 after the Office of the Comptroller of the Currency determined that the bank was insolvent and had at least $66 million in nonperforming loans, the release states.
Robert Kowalski, of Chicago, has not yet been sentenced.