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Michael Eisenga, a former Wisconsin mayor and business owner, has agreed to plead guilty to bank fraud for submitting fake documents to secure a $6.9 million commercial loan from the $13.5 billion Alliant Credit Union in Chicago, Ill.
In another bank fraud case, Michael Ahlers agreed to plead guilty to embezzling more than $500,000 from a credit union account of the University of Kansas Medical Center. Ahlers may have gotten away with the crime had it not been for a student who reported a discrepancy, according to court documents.
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In exchange for Eisenga's guilty plea filed in U.S. District Court in Madison, Wis., on Feb. 16, federal prosecutors agreed to recommend the "maximum available reduction" for accepting responsibility for his crime during a sentencing hearing before a judge. The plea agreement did not say whether federal prosecutors intend to recommend any prison time for the former mayor.
Eisenga's company secured the credit union loan for a commercial property in Columbus, Wis. In connection with the loan application, Eisenga submitted a signed 20-year lease agreement with a retailer to open a shop on the property and said that another company guaranteed the lease.
Federal prosecutors, however, said the documents were not genuine.
What's more, after Eisenga defaulted on the loan in January 2019, he provided Alliant with a lease cancellation agreement, but that document also turned out to be fake, according to the indictment filed in October in federal court.
The plea agreement also requires Eisenga to forfeit assets and property to pay restitution of $6,975,000.
Ahlers, who agreed to plead guilty to one count of bank fraud and one count of federal tax evasion in U.S. District Court in Kansas City, Kan., on Feb. 9, was an administrative officer at the University of Kansas Medical Center's Occupational Therapy Education Department.
In June 2007, he was the only KUMC employee who was a signatory on the OT Education Department account at the $30.5 million KUMC Credit Union in Shawnee. In November 2012, Ahlers made himself the sole signatory on the account, according to court documents.
The credit union account was opened in the early 1990s to hold funds contributed by the OT Education Department employees to pay for social functions and other incidental expenses.
After Ahlers left the OT Education Department for a new job, a student reported a financial discrepancy. Even though Ahlers closed the credit union account before he quit his job, an ensuing audit revealed the embezzlement, court documents showed.
From 2009 to 2015, the former KUMC employee withdrew money from the credit union account and for his personal use. He took out the funds through cash withdrawals and cashier's checks made payable to himself, members of his family and a business controlled by him and another person only identified by initials, according to the indictment.
To conceal his fraud, Ahlers generated invoices outside of KUMC's established financial system so that only he had visibility of the funds that he caused to be deposited into the KUMC account, according to federal prosecutors.
As the sole signatory of the KUMC credit union account and without the medical center's knowledge or consent, Ahlers bypassed the medical school's oversight and processes by which funds are deposited and allocated in state-controlled bank accounts and reconciled monthly.
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