A press release from the U.S. Attorney’s Office:
FORMER OWNER OF COMMERCIAL MORTGAGE AND FINANCE COMPANY SENTENCED
ROCKFORD — ANTHONY F. D’AGOSTINO, 79, the former owner, CEO and President of Commercial Mortgage and Finance Co., in Rockford, was sentenced today by U.S. District Judge Frederick J. Kapala for seventeen counts of mail fraud, one count of wire fraud, and one count of securities fraud.
Judge Kapala sentenced D’Agostino to 90 months in federal prison for each count of wire and mail fraud and 60 months in prison for securities fraud, to run concurrent, followed by 3 years of supervised release.
Judge Kapala also ordered D’Agostino to pay $49,350,615.95 in restitution. D’Agostino was ordered to surrender on July 14, 2014.
After a six-day bench trial in September 2013, Judge Kapala found D’Agostino guilty on January 17, 2014, of mail fraud, wire fraud, and securities fraud. 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.
The sentence 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.