Former Wisconsin Mayor Gets Prison for Defrauding Illinois' Largest Credit Union

Former Wisconsin mayor Michael Eisenga will spend the next three and a half years in federal prison for fraudulently obtaining a $6.9 million loan from Illinois’ largest credit union.

During a sentencing hearing in Madison, Wis., Wednesday, U.S. District Court Judge William M. Conley also ordered Eisenga to pay restitution of $4,027,037 to the $13.9 billion Alliant Credit Union in Rolling Meadows, Ill. Following his prison term, he will serve five years of supervised release.

Eisenga pleaded guilty to one felony charge of bank fraud for submitting fake documents to secure the loan from Alliant in 2017 to develop a commercial property in Columbus, Wis.

Prosecutors said he presented the credit union with a signed 20-year lease agreement with a retailer to open a shop on the property and said that another company guaranteed the lease. But those 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 phony.

In addition to serving as a mayor for Columbus for more than five years, Eisenga also owned a mortgage company, American Lending Solutions, from 1990 to 2018.

During his sentencing hearing, Eisenga said his mortgage company was hit hard by the Great Recession and that he became increasingly strapped for cash.

“I disregarded that basic moral and legal principle when I put this false loan application together, and then I kept that fraud going for as long as I could,” Eisenga said.

Based on three “optimistic market studies” that he reviewed with the idea that he could develop the commercial property with a shopping center and grocery store, Eisenga said he figured in a couple of years he could have refinanced the fraudulent loan with a legitimate loan.

“I thought to myself, nobody would ever know and nobody would ever be financially harmed,” he said. “I also thought that I could preserve my self-image and my standing in the business and local community. My pride went before this fall. That’s clear. I know now quite well that I was wrong and that people were harmed.”

But Eisenga’s business and community image was not so pristine.

From 2005 to 2011, Eisenga’s business and other companies he owned had been investigated by state agencies in Wisconsin and Illinois, which have assessed him with more than $400,000 in back taxes, back wages, fines and penalties, according to a January 2014 report published in the Wisconsin State Journal.

In 2011, for example, Eisenga signed a consent order to pay a $15,000 fine following a Wisconsin Department of Financial Institutions (DFI) investigation that American Lending Solutions made misstatements on applications and used unlicensed loan originators, the newspaper reported. Additionally, the company drew at least three reprimands from DFI because of complaints and inquiries from consumers and charges of broken promises in mortgage refinancing, according to the report.

Eisenga is scheduled to begin his prison sentence on July 30.