Plea deal expected on fraud charges

Satisky to be re-arraigned on 12 counts in federal court

February 16, 2010|By Tricia Bishop |

A bankrupt Maryland man who was once named a financial services "check casher of the year" is expected to plead guilty in federal court Feb. 22 to participating in a scheme that prosecutors say bilked Baltimore banks out of millions.

Brian I. Satisky, who previously pleaded not guilty to 12 fraud counts, is scheduled for rearraignment in Baltimore's U.S. District Court. His defense attorney, Howard Cardin, confirmed Monday that a plea deal had been reached, although he couldn't provide details.

Satisky had shared ownership of A&B Check Cashing with his older brother, Alec Satisky, who committed suicide at age 57 in 2006 as the business crumbled.

Brian Satisky had been scheduled to go to trial today. He was indicted in May on federal charges alleging that the brothers ran a three-year "check-kiting" scheme by depositing bad checks from one bank to another, then withdrawing the funds before the deception was discovered.

By the time the scheme collapsed in June 2006, after the elder Satisky shot himself because of "financial ruin" according to a police report, Baltimore's Carrollton Bank was out $1.8 million, the indictment claims. Baltimore County Savings Bank lost $10.6 million, and its chief executive, Gary Loraditch, resigned during the fallout.

Attorney James Heidelbach represents BCSB in a civil suit against Satisky. He said the guilty plea is irrelevant to his case unless Satisky, 57, "fesses up to where all the stolen money is."

Satisky and his brother had been in business for decades, borrowing money to open a shoe store on West Patapsco Avenue in 1973, when they were both barely in their 20s. Eventually, they added a check-cashing business at that location and several others at the urging of customers, the brothers told The Baltimore Sun in a 1996 article.

Three years later, they made news again, accused of charging exorbitant interest rates to cash post-dated checks, known as "payday lending." The Satiskys said it was a valuable service to working people, though they stopped the practice under public pressure in 2000, when they were up to 13 stores.

"I still contend that it is a very valuable and needed service," Brian Satisky, who was then head of a state check cashing association, told The Sun.

By 2002, the brothers had 17 check-cashing stores and they were being lauded for providing financial services in Southwest Baltimore, a neighborhood essentially abandoned by banks. The effort gave the "fringe" business some credibility, Brian Satisky said at the time.

And in 2003, he was named "check casher of the year" by Financial Service Centers of America, a national trade group to which he belonged. That's also the year he and his brother began running the scheme, according to prosecutors.

On June 22, 2006, Alec Satisky died of a self-inflicted gunshot wound, and his brother told police they'd been discussing suicide.

Days later, the Maryland Department of Labor and Licensing issued a cease-and-desist order for A&B, though by then the business' 20 locations had been closed and its parent company, Colleen Inc., had filed for bankruptcy.

Bankruptcy automatically stays civil cases, including BCSB's.

Lori Simpson is a trustee in a Satisky bankruptcy case, which she said is nearing closure. Satisky has been reluctant to offer information in court, often invoking his Fifth Amendment privilege, however.

If the guilty plea goes forward as planned, some of those issues might be resolved, Simpson said, because he will no longer face the "threat of prosecution," though he might face jail time.

Timeline of events
1973: The Satisky brothers open a shoe store in the 2100 block of W. Patapsco Ave., adding check-cashing services soon after.

2003: Brian Satisky is named a national check casher of the year, in part for operating their A&B Check Cashing stores in Baltimore areas abandoned by banks. According to prosecutors, the brothers began a kiting scheme in 2003.

June 22, 2006: Alec Satisky shoots himself in the head.

June 29, 2006: State Department of Labor and Licensing issues a cease-and-desist order to A&B.

May 12, 2009: A federal grand jury indicts Brian Satisky, who by then had been under investigation by the FBI for years.

Source: Sun research, court records

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