Businessman pleads guilty in multimillion-dollar check-kiting scheme

February 22, 2010|By Tricia Bishop | tricia.bishop@baltsun.com

A Maryland businessman pleaded guilty Monday in federal court to a financial scheme that defrauded two Baltimore banks out of millions, ruined his check-cashing company and contributed to his older brother's suicide.

Brian I. Satisky, 56, faces up to 30 years in prison at his sentencing and a $1 million fine for his role, which involved writing bad checks to various banks to falsely inflate the account balances. Prosecutors also plan to ask that he pay restitution to the banks he defrauded: $1.8 million to Carrollton Bank and $10.6 million to Baltimore County Savings Bank.

Satisky is scheduled for sentencing May 28.

He owned and operated multiple A&B Check Cashing companies throughout the state with his brother Alec Satisky, who shot himself at company headquarters in 2006, as their business crumbled.

According to a statement of facts contained within the plea agreement, the Satisky brothers transformed a family shoe store into a check cashing company that grew to 21 locations and more than 80 employees at its height. But a lawsuit alleging that they charged high interest rates to cash post-dated checks -- known as "payday lending" -- led to a "significant and immediate shortfall" when the brothers agreed to settle the case in 2003 by giving up $1.6 million in anticipated collections.

That's when Alec Satisky began the check-kiting scheme, according to the court document, later recruiting his brother. They wrote bad BCSB checks to Carrollton, and vice versa. The cross-depositing made it falsely appear as if there were millions in the accounts, allowing the brothers to continue operating their company until the scheme fell apart in June 2006.

Satisky, who had pleaded not guilty to all counts in an earlier indictment, pleaded guilty Monday during a brief hearing to one count contained in a 12-count superseding indictment.

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