State Crime Reports

Former Owner of Commercial Mortgage and Finance Company Convicted of Fraud

ROCKFORD–(ENEWSPF)–January 17, 2014.  Anthony F. D’Agostino, 79, the former owner, CEO and President of Commercial Mortgage and Finance Co., in Rockford, was found guilty today by U.S. District Judge Frederick J. Kapala on seventeen counts of mail fraud, one count of wire fraud, and one count of securities fraud, in connection with a scheme to defraud investors in Commercial Mortgage. The decision was filed today in U.S. District Court in Rockford, following a six-day bench trial in September 2013.

According to the decision, D’Agostino raised capital for his business by selling instruments known as Promissory Notes and Certificates of Participation to investors. The evidence showed that D’Agostino concealed from the investors the fact that Commercial Mortgage had a negative net worth that steadily increased during the years that D’Agostino owned the company. Specifically, by year-end 2003, when Commercial Mortgage’s net worth had fallen to -$12,860,653 and it had been six years since Commercial Mortgage had made a profit, it became clear to D’Agostino that Commercial might not recover and D’Agostino engaged in a scheme to defraud investors by utilizing Commercial Mortgage’s long-standing good will and reputation in order to obtain and retain money from investors. From the end of 2003 through October 8, 2008, D’Agostino’s fraud scheme exposed the investors to losses of more than $20 million.

Judge Kapala found that D’Agostino made specific false statements to several of the investors. Specifically, defendant told Commercial Mortgage customers that Commercial Mortgage was “doing well,” “doing great,” “very fine,” or “wonderful.” According to the decision, D’Agostino made these statements about Commercial Mortgage’s financial circumstances and the statements were false.

No sentencing date has been set at this time. Each count of mail fraud and wire fraud carries a maximum penalty of 20 years in prison, and a maximum fine of $250,000, or an alternate fine totaling twice the loss or twice the gain derived from the offense, whichever is greater. Securities fraud carries a maximum penalty of up to 5 years in prison, and fine of up to $10,000. The Court must impose a reasonable sentence under the advisory United States Sentencing Guidelines, as well as restitution.

The conviction was announced today by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Robert J. Holley, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of investigation; and Illinois Secretary of State Jesse White.

The government is being represented by Assistant U.S. Attorneys Scott A. Verseman and Scott R. Paccagnini.