Fraud Friday– Former Businesswoman Sentenced for $4.2 Million Loan Fraud Scheme

January 10, 2020

By Caity Witucki
Contributing Editor, Fraud Friday

Fraud Friday– Former Businesswoman Sentenced for $4.2 Million Loan Fraud Scheme

Former Massachusetts business owner, Beth Zastawny, was sentenced on Tuesday in federal court for one count of bank fraud and three counts of money laundering. Zastawny will serve one day in prison followed by a year of supervised home confinement and two years on supervised release.

According to court documents, Zastawny committed bank fraud in connection with a $4.2 million loan package for her Chicopee based company, Diecast Connections Company Inc.

In January 2015, Zastawny submitted fake financial statements to Blue Hills Bank. The fake financial statements made it appear as though Diecast’s assets and liabilities were more favorable than they were.Blue Hills Bank relied upon Zastawny’s false representations to approve the loan package. After obtaining the loan proceeds, Zastawny paid back creditors who had not been disclosed to the bank, and the funds were used for purposes not called for in the loan agreement between Diecast and Blue Hills Bank. In July 2016, Blue Hills Bank foreclosed on the loan after Zastawny failed to meet the terms of the loan agreement, which resulted in a substantial loss for the bank.

When Zastawny defaulted, The case was investigated by Lelling’s office and the Internal Revenue Service’s Criminal Investigation in Boston. In May, Zastawny pleaded guilty on all counts before U.S. District Court Judge Mark G. Mastroianni and a date for her sentencing was tentatively set for October 2019. Zastawny’s sentencing was later moved to January 7th, 2020.
At the sentencing hearing, Zastawny told the judge she was desperate to save her business. “I felt so out of options,” Zastawny said. “My guilt was overshadowed by the fear and desperation I was facing if Diecast failed.”

Department of Justice
560 WHYN
News Break
The Washington Times

3 months ago by in . You can follow any responses to this entry through the | RSS feed. You can leave a response, or trackback from your own site.