Mom, son get jail time $14M bank fraud
BY STACI WILSON
The mother and son involved in a bank fraud scheme that shuttered the doors of an area credit union were sentenced last week in U.S. District Court, Binghamton, N.Y.
Scott Lonzinski, 32, was sentenced Wednesday, Dec. 19 in U.S. Federal Court, Binghamton, N.Y., by U.S. District Judge Thomas McAvoy to serve 60 months in prison on one count of bank fraud, followed by five years federal probation.
His mother, Laura Conarton, 47, Great Bend, received the same sentence handed down to her on Thursday, Dec. 20.
Lonzinski apologized in court. “I’m sorry. I let down my family, my community. This affected people and that’s not what I intended.”
Conarton also offered her apologies to the court the community and her friends. “I take full responsibility for what I’ve done,” she said.
Before issuing the Lonzinski’s sentence, Judge McAvoy said, “An institution that has been in this community for years, Broome County Teachers’ Credit Union, was destroyed by your actions.”
The judge said that although he did not believe Lonzinski presented a danger to the community in the future a “message needs to be sent to the public this conduct is not acceptable behavior.”
The message to Conarton from the judge was the same.
McAvoy told Conarton her actions created a terrible amount of damage adding, “I’m sure your purpose wasn’t to cause the collapse of the Broome County Teachers Credit Union.”
But the judge also referenced Conarton’s 15 years experience working in the banking industry. “You had the understanding and knowledge to create the scheme.”
Judge McAvoy said that in addition to the sentence being a punishment for Conarton it also needed to serve as a warning to others.
“People have to know this kind of conduct brings harsh penalties,” he said.
The restitution amount of over $14 million was ordered to be paid to the National Credit Union Administration.
The NCUA took over day-to-day operations of the BCT and the credit union’s assets were eventually sold to Visions Federal Credit Union. No members or clients of BCT lost money as a result of the liquidation of BCT.
According to court documents, Lonzinski and Conarton acted together to use fictitious certificates of deposits as collateral to secure loans from the now defunct BCT.
The 10 loans fraudulently acquired through BCT between July 2009 and February 2011 were used by Lonzinski to finance his construction business, remodel his home and purchase vehicles for personal and business use.
Lonzinski was painted by his attorney in court as a family man and a country boy who liked to drive tractors. His attorney, Joe D’Andrea said, “Good people make some bad mistakes.”
The attorney also indirectly pointed the finger at Conarton as being the mastermind behind the fraud scheme.
“He did not have the wherewithal to create this scheme,” D’Andrea told the court Wednesday morning. “But he did go along with it.”
Conarton’s attorney, Paul Walker, told the court, “She knew what she was doing was wrong. It got so out of control.”
Her extreme devotion to her son motivated her actions, Walker said. “As a result, she was blinded. She crossed the line and caused the demise of this credit union.”
Walker said Conarton told him the scheme felt like a “house of cards.”
“She was waiting for the shoe to drop,” Walker said. “When it did, she never tried to hide anything.”
D’Andrea said his client was born to a 14-year-old mother and worked hard in his life to prove himself.
“He started a small construction company. A country boy, he was good at the work but bad at the business end,” D’Andrea said.
The attorney said Lonzinski was using the funds acquired from the BCT loans to pay back his debt. “He thought he was doing the right thing but used the wrong methods to get there,” D’Andrea said.
He also noted that after an audit revealed the criminal wrongdoing, Lonzinski cooperated with the investigation and helped locate a number of the assets, including delivering trucks and equipment for forfeiture a day prior to entering a guilty plea in August.
Lonzinski gave Conarton a BMW, but that was the only way she benefited from the fraud, Walker told the court.
“Her liabilities exceed her assets. She’s lost her marriage, lost her house and lost the good reputation she had built in the community,” Walker said.
Outside of court, Walker said the credit union also needs to take some of the responsibility of its demise.
“If they had done due diligence early, this would have been stopped a long time ago,” Walker said.
The judge ordered both Lonzinski and Conarton be placed in prisons as closed to northeastern Pennsylvania as possible.
Both were ordered to report for incarceration, which will be determined by the Board of Prisons, on Jan. 24, 2013.
In addition to the prison time, Lonzinski also agreed to forfeit assets identified and seized in the investigation.
Assets seized during the investigation include:
*Cash proceeds of a sale of real property subject to forfeiture: 4436 SR 247, Clifford Twp., $494,141.
*Real property to be forfeited: a parcel on Old Rt. 11, Hallstead, purchase price of $440,000.
*2011 BMW X5
*2010 BMW 328XI
*2009 Ford Shelby Mustang
*two, 2011 GMC Sierra 2500
*two, 2011 Arctic Cat F-8
*2009 Chevy Silverado
*2011 Peterbilt 288
Three bank accounts at Honesdale National Bank were also forfeited in the amounts of: $3,600,949.31; $715,691,97; and $25,850.92.
And cash forfeited was $333,000.
Judge McAvoy ordered both Lonzinski and Conarton to not take on new credit charges and also obtain credit counseling from a probation approved provider following their release from prison.