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Sterling man, 45, guilty of bank fraud

Loan officer took $1.1 million in kickbacks from loans made to family, prosecutors say

Published: Wednesday, April 3, 2013 1:15 a.m. CDT • Updated: Wednesday, April 3, 2013 1:26 a.m. CDT

ROCKFORD – A Sterling man pleaded guilty to bank fraud Tuesday in a case in which federal prosecutors say he took more than $1.1 million in kickbacks from loans he made to family members.

Lyle J. Spaulding, 45, could face up to 30 years in prison, a fine and restitution at his July 8 sentencing.

Because, among other things, he has no criminal history and admitted his guilt in a timely fashion, though, federal sentencing guidelines set a range of 3 years, 5 months to 4 years, 3 months.

Prosecutors will recommend the court impose a sentence at the low end of the range, and full restitution, the plea agreement said.

In the end, though, it’s up to the judge to set his sentence.

According to the plea agreement, while working at several local banks, Spaulding made loans to family members and others with the understanding that they would give some of the money to him.

He didn’t tell the banks about his relationships to the borrowers, and mischaracterized the loans as “commercial loans” to avoid the limits the banks had placed on the types and amounts of loans he could approve.

He also OK’d a $100,000 line of credit for someone who again paid him kickbacks, the plea agreement said.

Spaulding committed the fraud while working at Freedom Bank in Sterling and Rock Falls from December 2007 to December 2009; at UnionBank in Tampico from March 2006 to December 2007; and at Amcore Bank, now known as BMO Harris Bank, from March to December 2005.

He originally was charged with eight counts of bank fraud; seven will be dropped at sentencing if U.S. District Judge Frederick J. Kapala accepts the agreement.

Also Tuesday, Spaulding told Kapala that he has been living with his sister in Sterling for a little more than a year because he lost his home to foreclosure.

 

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