Robert Kowalski got what was coming to him when a federal judge on Tuesday slapped him with a 25-year prison term for his role in the Washington Federal Bank for Savings scandal.
U.S. District Judge Virginia Kendall was clearly more than fed up, with good reason beyond the basic fact of Kowalski’s conviction for embezzling $8 million from the Bridgeport bank that executives and board members used as their personal piggy bank for years.
“You have never, ever accepted any role in this offense,” Kendall said to Kowalski. “You have denied liability. You have constantly played games with this court and other courts. You have hidden assets from the courts. You have yelled and screamed at the court.
“You are absolutely incapable,” Kendall added, “of looking at the reality of this situation and your role in it.”
Kowalski’s “role in it” was as a central figure in a classic, all-too-familiar tale of Chicago corruption carried out by the politically connected. He’s one of 16 people to be charged in the scheme, which unraveled when federal regulators shut down the savings and loan in December 2017.
Kowalski erupted once again on Tuesday, shouting at the judge that the sentence was “too much for me.” Meanwhile, he also got hit with a $7.2 million fine meant to help pay back the Federal Deposit Insurance Corporation for having to cover nearly $140 million in bad loans made by the bank.
If you’ve been reading the ongoing Sun-Times Watchdogs series on Washington Federal, you’ll recall the highlights. Washington Federal was a family-run institution in Bridgeport for decades; it offered high-interest certificates of deposit that were, it seems, clearly meant to lure in customers, some of whom have yet to recoup money they lost because their deposits exceeded FDIC reimbursement limits. Daley family member Ald. Patrick Daley Thompson was among those convicted in connection to the scandal.
Then there’s the mysterious death — officially, a suicide — of the bank’s president and CEO, John Gembara, who was found dead just days before regulators shut down the bank, in the million-dollar Park Ridge home of a bank customer who was also the bank’s handyman. The man, who had some $2 million in outstanding bank loans at the time, was later convicted of embezzling $6 million from the bank.
It’s all worthy of a Netflix screenplay, as a reader once told us.
The one person who tried to do the right thing was Washington Federal’s one-time chief financial officer, Barbara Glusak, who warned two bank board members about falsified loan documents — to no avail — and sent a letter to federal authorities about the scam.
Kudos to her, and to Kendall. Kowalski got a harsh sentence. He asked for it, by embezzling millions.