Two Alexandria women have been sentenced to 90 days in jail and five years probation in connection with their part in a $2.5 million bank fraud that officials say helped topple a Chicago bank in 1982.
Jean Williams and Kay Holland received the sentence Wednesday from U.S. District Judge James Moran in Chicago, federal attorneys said.
They were convicted in December after a three-week trial on two counts each of fraud.
Moran said during sentencing that he will consider how much of the $2.5 million he will make Williams, Holland and 10 other people indicted in the bank-loan scheme repay.
None of the principals could be reached for comment Friday.
The scheme started when Williams and Holland put up collateral to get a $1.65 million loan from Savings One Association of Dresden, Ohio.
Federal officials said that Holland forged a signature on the deed for Virginia property owned by her stepfather.
Federal officials said that James B. Gastineau, a loan officer at Savings One, bribed three directors of the bank with $16,500 to get the loan approved. Gastineau also was convicted of bank-fraud charges in December.
Two former directors of Tri-State Bank, which is based in the Chicago suburb of Markham, used the loan to purchase Tri-State from the Central National Bank of Chicago, said Ira Raphaelson, one of the assistant U.S. attorneys who prosecuted the case.
Tri-State then loaned $393,000 to Williams and Holland, "who immediately went into default on the loan," Raphaelson said.
Bank regulators approved the purchase of Tri-State because "everything looked good on paper," Raphaelson said.
But then irregularities surfaced that forced the Securities and Exchange Commission to take a closer look at Tri-State's activities, he said.
The SEC, which became involved because the securities involved crossed state lines, found evidence of criminal activity and turned the case over to the Justice Department.