Judge sentences local businessman to 3 years in prison for defrauding banks

Kite scheme cheated banks out of more than $12 million

May 28, 2010|By Brent Jones, The Baltimore Sun

As a federal judge sentenced a Maryland businessman Friday to three years in prison for defrauding two banks of millions of dollars, calling the sentence a substantial penalty levied on a man who previously never had so much as a speeding ticket.

U.S. District Judge Benson E. Legg's sentence for Brian I. Satisky, 56, followed federal sentencing guidelines. Satisky could have received up to 51 months in prison for his role in writing bad checks to Carrollton Bank and Baltimore County Savings Bank, falsely inflating his account balances in a scheme known as check kiting.

Attorneys for Satisky had asked the judge to sentence the former check-cashing company executive to one year and a day, saying their client was an unknowing accomplice in a plot introduced by his brother that spun out of control. Satisky has since shut down the cash-checking business after declaring bankruptcy, and has found work at Glazer Kennedy Insider Circle, a business marketing strategy company.

Legg rejected the idea that Satisky did not know that what he was doing was illegal, saying he "is a bright, very sophisticated individual who was running a quasi-bank. … I do not mean to paint Mr. Satisky in a bad light. He is, in a larger sense, an admirable person, and I give weight to the efforts he has made in the last four years to put this behind him."

About a dozen family members, including his mother, son, daughter and and friends attended the four-hour hearing. Michael Medway, Satisky's stepbrother, told the court that the defendant is a caretaker for his father, who is married to Satisky's mother.

Medway said after the hearing that the family would have liked a lesser sentence but that he "understood what the judge did and why he did it."

Satisky owned and operated several A&B Check Cashing companies throughout the state with his brother, Alec Satisky, who fatally shot himself after the business began to crumble in June 2006.

According to a plea agreement, it was Alec Satisky who began the check-kiting scheme after the brothers agreed to give up $1.6 million in anticipated collections to settle a lawsuit. The suit accused them of charging high interest rates to cash postdated checks, a process known as payday lending that is illegal in Maryland.

The settlement led to a significant and immediate money shortfall, according to the suit. At its height, A&B Check Cashing had 21 locations and employed more than 80 people.

To cover expenses, the brothers wrote bad checks to the banks for about three years. During one week, the Satiskys deposited checks worth more than $10 million to Baltimore County Savings Bank, then used that money, which was immediately credited to their account, to pay off other expenses before the checks cleared.

Satisky spoke on his own behalf, publicly addressing the allegations against him for the first time. He apologized to the banks, businesses and individuals "who lost money during the events that took place in June 2006," he said. "I'm proud of the work I've done over the last four years, but despite of that, I live with a continual emptiness, sadness, knowing that I could have, should have stopped those series of events and did not. If I had, my brother may still be alive today. That's something I've got to live with every day of my life, in and out of prison."

The president of Baltimore County Savings Bank gave a statement to the court, saying the fraud had a drastic effect on his institution. Joseph Bouffard said several employees lost their jobs, some of whom had been with the bank for more than 20 years, and that the publicity surrounding the case shook up the customer base. "We lost a lot of deposits immediately afterward," Bouffard said.

Satisky could have his sentence reduced by six months for good behavior. He is expected to be sent to a federal prison camp in Cumberland.

The judge also ordered Satisky to pay restitution to the banks — $10.6 million to Baltimore County Savings Bank and $1.8 million to Carrollton. Satisky will likely have to pay between $500 and $1,000 a month to the institutions when he is a released from prison.

"This is one of the largest fraud cases we've seen," said U.S. Attorney Rod J. Rosenstein. "The judge's comments reflected the significance of the case."

brent.jones@baltsun.com

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