BINGHAMTON, N.Y. (AP) -- A mother and son from Pennsylvania have pleaded guilty in federal court to creating phony documents, forging signatures and inventing fictitious people to get $14 million in fraudulent loans over a two-year period from a New York-based teachers' federal credit union, a prosecutor said Tuesday.
Scott Lonzinski of Clifford Township and his mother, 46-year-old Laura Conarton of Great Bend, each pleaded guilty to felony bank fraud in U.S. District Court in the Northern District of New York.
Conarton and her 32-year-old son admitted that between July 2009 and February 2011, they hit the Broome County Teachers' Federal Credit Union for 10 loans worth $14 million.
By creating the fake documents and personas, the pair convinced the credit union that certificates of deposit held by Lonzinski and pledged as security were worth at least as much as they wanted to borrow. The CDs, though, were bogus and had no value.
They used the money to finance Lonzinski's construction business, where his mother was manager and bookkeeper. They also bought vehicles, remodeled Lonzinski's house and paid other business and personal expenses.
"The road to financial ruin is paved by schemers who think they are just sly enough to take the money, line their pockets, and make enough to satisfy obligations before they are caught," said U.S. Attorney Richard Hartunian. "But people suffer, often losing their savings, their retirement, or the money they need to meet expenses."
The scam was discovered during an examination by the National Credit Union Administration, the federal agency that regulates and insures federally chartered credit unions. The credit union's assets were ultimately sold to another credit union. No members of the credit union lost money as a result of the liquidation.
Investigators seized bank accounts, property and automobiles worth more than $5 million from Lonzinski and Conarton. Those assets will be used to make partial restitution.
They each face up to 30 years in prison and a fine up to $1 million when they are sentenced in December.