Former city employee pleads guilty to wire fraud charges

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ROCKFORD — A former resident and employee of the City of Rochelle pleaded guilty Tuesday before U.S. District Judge Iain D. Johnston to wire fraud for fraudulently obtaining at least $150,000 from a non-profit business association.

Scott Koteski, 58, of Rochelle, was an employee of the City of Rochelle and was selected by the city to sit on the board of directors of a non-profit business association that provided broadband internet technology to smaller municipalities in northern Illinois. According to the written plea agreement, starting in 2011, Koteski was selected as the treasurer of that association. As treasurer, Koteski handled the invoicing and billing of the member municipalities, and as of February 2012, Koteski had signatory authority on the association’s bank account.

From September 2012 through April 2018, Koteski fraudulently obtained at least $150,000 from the association, which he used for his own benefit without the association’s knowledge or consent. Koteski wrote numerous checks to himself from the association’s bank account, which he deposited into his personal bank account for his personal benefit. Koteski concealed his acts by writing false information on the memo line to make it appear the checks were for reimbursement of personal monies Koteski spent for the association when, in fact, Koteski was not entitled to reimbursement.

Additionally, according to the plea agreement, in 2018, Koteski made online payments from the association’s bank account to a credit card company to pay for balances on his personal credit card and to an online loan financing company to pay for balances on Koteski’s loan.

Koteski faces a maximum sentence of 20 years imprisonment, a term of supervised release of up to three years following imprisonment, and a fine of up to $250,000, or twice the gross gain or gross loss resulting from that offense, whichever is greater. The actual sentence will be determined by the United States District Court, guided by the Sentencing Guidelines. 

Sentencing for Koteski is set for June 29 at 10 a.m.

The guilty plea was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois, and Emmerson Buie, Jr., Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation. The Illinois State Police assisted in the investigation.

The government is represented by Assistant U.S. Attorney Scott R. Paccagnini.