Second Equipment Finance Exec Sentenced to 20 Years for Fraud
The second leader of the Equipment Finance Inc. loan fraud was sentenced Wednesday to 20 years in prison.
Michael J. Schlager also was ordered to pay restitution of $53 million by U.S. District Judge Paul S. Diamond in Philadelphia.
This follows Tuesday’s sentencing of the other EFI scam mastermind, Joseph M. Braas, to 15 years in prison and restitution in the same amount.
They are the first of eight defendants to be sentenced in the landmark fraud case, which forced the sale of a major financial institution and triggered hundreds of layoffs.
Braas and Schlager had pleaded guilty to the same offenses: one count of conspiracy to commit mail fraud and two counts of mail fraud, all affecting a financial institution.
Federal guidelines had called for both to receive a sentence of approximately 24 to 30 years.
But a federal prosecutor had asked Diamond to impose less time on Braas, citing his “substantial assistance” in the probe.
Judy G. Smith, an assistant U.S. attorney, made no such motion on behalf of Schlager, though.
Schlager, 51, of Lititz, was a senior vice president and recovery, workout and repossession manager at EFI.
Braas, who recently moved to Columbia from Lititz, was EFI’s senior vice president and chief operating officer.
The pair, Smith said, “organized and oversaw a lengthy, sophisticated and destructive commercial loan fraud scheme of exceptional magnitude.”
According to Schlager’s attorney, Joseph U. Metz, his client admitted his guilt early in the probe and provided truthful information to investigators.
That’s what Braas did, too.
The difference, Metz said, is that Braas provided insights that the investigators didn’t have through other sources.
Schlager’s information, however, wasn’t new to them.
“He did provide information. The government didn’t doubt that it was true, but they didn’t need it. They had it by other means,” Metz said.
That’s why the prosecutor lauded Braas but not Schlager.
Still, Schlager’s cooperation was enough to persuade the judge to impose a sentence below the guidelines, the attorney said.
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