Two Illinois Men Sentenced for Multi-Million Dollar Bank Fraud Scheme
Erik Richard Jones, 46, and Mitchell Allen Melega, 38, were sentenced on July 23, 2024, to multi-year prison terms following their convictions for conspiracy to commit bank fraud, bank fraud, and money laundering. Jones, of Colona, Illinois, received a 54-month prison sentence, while Melega, formerly of Orion, Illinois, was sentenced to 75 months. Both men will also serve five years of supervised release and have been ordered to pay $4,840,944.63 in restitution.
Details of the Scheme
During the sentencing hearing in front of U.S. District Judge James E. Shadid, evidence was presented showing that between 2016 and 2017, Jones and Melega executed a scheme to provide false documents to First Midwest Bank in Moline, Illinois. These documents induced the bank to provide loans to Colona-based I-80 Equipment for vehicle purchases and improvements. As the owner of I-80 Equipment, Jones, along with Melega, who served as the controller, diverted the loan funds to unauthorized uses. They also directed employees to provide false information to support their fraudulent activities.
Additionally, they diverted real estate loan proceeds advanced by Northwest Bank in Davenport, Iowa, which were intended for renovations to an apartment complex Jones had purchased. Instead, the funds were used to pay off an unrelated loan for Jones's family members and cover unrelated business expenses of I-80 Equipment.
Judge Shadid noted the sophistication of the scheme, which involved altering legitimate documents, fabricating false documents, and included at least 110 vehicle purchases over an extended period.
Legal Proceedings
Both men were charged in October 2020 in a twelve-count indictment. The charges included conspiracy to commit bank fraud, bank fraud, and money laundering. Jones pleaded guilty in September 2023 to all counts, while Melega pleaded guilty in March 2024 to the same charges. The statutory penalties for conspiracy to commit bank fraud and bank fraud each carry up to 30 years of imprisonment per count, and money laundering carries up to ten years of imprisonment per count.
Statements from Officials
U.S. Attorney Gregory K. Harris stated, “Our office is dedicated to prosecuting these serious financial crimes. Actions like the defendants’ cause significant harm to banks and undermine the stability of our financial system.”
FDIC OIG Special Agent in Charge Vincent R. Zehme commented, “The defendants in this case have been brought to justice for defrauding First Midwest Bank and using the obtained funds for unauthorized purposes. The FDIC OIG will continue working with our law enforcement partners to hold individuals accountable who commit such fraudulent offenses.”
IRS CI Special Agent in Charge Thomas F. Murdock remarked, “This sentence should serve as a warning to any potential fraudsters who think they can defraud banks and get away with it. The collective efforts of IRS CI, the FDIC-OIG, and the U.S. Attorney’s Office ensure those who engage in bank fraud and money laundering are vigorously investigated and brought to justice.”
FBI Special Agent in Charge Christopher Johnson added, “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. The FBI remains committed to safeguarding our economic security from threats which could cause harm to American institutions.”
Invetech LLC: Safeguarding Financial Integrity
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The case was investigated by the IRS Criminal Investigation Division, the FDIC Office of Inspector General, the FBI Springfield Field Office, and the Illinois Secretary of State Police. Assistant U.S. Attorneys John Mehochko and Jennifer Mathew prosecuted the case.
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