Washburn County Man sentenced to Five Years for Loan Fraud

MADISON, WI—John W. Vaudreuil, United States Attorney for the Western District of Wisconsin, announced that Leonard Kolschowsky, 68, was sentenced yesterday by Chief U.S. District Judge William C. Conley to five years in prison for making false statements on a loan application. Kolschowsky pled guilty to the offense on March 21, 2011.

In connection with his guilty plea, Kolschowsky stipulated that he was responsible for nearly $1 million dollars in loss relating to the false loan application and his other fraudulent conduct.

Beginning in 2000, Kolschowsky, then an owner of the Boat Depot, a Minong, Wis. boat dealership, executed three fraudulent schemes. They were a scheme to defraud financial backers of Boat Depot inventory; a scheme to defraud through a series of false loan applications for boats purportedly sold through the Boat Depot; and a bankruptcy fraud scheme to conceal property rightfully belonging to Boat Depot creditors.

In 2003, after beginning the process of negotiating a guilty plea with the United States, Kolschowsky fled the country to avoid prosecution. Kolschowsky was eventually found in Brazil and was arrested on January 11, 2008. Kolschowsky remained in custody and was extradited to the United States to face the charges on November 25, 2010. At sentencing, Judge Conley indicated that Kolschowsky’s flight to avoid prosecution not only delayed justice, but left his business partners “holding the bag” for losses relating to Kolschowsky’s fraudulent schemes.

United States Attorney Vaudreuil thanked the Washburn County Sheriff’s Department for their crucial role in the investigation and noted that, “Due to the diligence of the Federal Bureau of Investigation and U.S. Marshals Service, Kolschowsky was returned to the United States to face the consequences of his criminal conduct. Kolschowsky spent more than two years in a Brazilian prison pending extradition—it simply does not pay to run.”

The prosecution of the case has been handled by Assistant U.S. Attorney Timothy M. O’Shea.