An associate of a shuttered bank’s late CEO was sentenced to 25 years in prison for embezzling millions of dollars from the bank ahead of its 2017 collapse, the Chicago Sun-Times reported Tuesday.
Robert Kowalski, 62, rerouted more than $8 million from Washington Federal Bank for Savings in payments that were erroneously recorded as loans, prosecutors said.
“It’s too much for me. I’ll die before then,” Robert Kowalski, 62, said after U.S. District Judge Virginia Kendall handed down his sentence, according to the Sun-Times.
Kowalski must also pay $7.2 million in restitution to the Federal Deposit Insurance Corp., which covered millions of dollars in bad loans after the Office of the Comptroller of the Currency shuttered Washington Federal.
Kowalski also was convicted of tax fraud and bankruptcy fraud and must pay $424,047 in back taxes to the Internal Revenue Service.
Washington Federal was closed days after its longtime president and CEO, John Gembara, died — officially by suicide, though his widow has challenged that — in the home of the bank’s handyman.
Kowalski is the 16th person charged in connection to the bank’s collapse, including former high-ranking Chicago City Hall official William Mahon, former Alderman Patrick Daley Thompson and Marek Matczuk, who owned the home in which Gembara died, the Sun-Times reported.
Kowalski told the judge he was being sent “to jail now for something this man did,” referring to Gembara, whom Kowalski argued ran a Ponzi scheme.
“I’m going to pay the price for this man, who died under suspicious circumstances,” Kowalski said, according to the Sun-Times.
In 2017, regulators discovered that Washington Federal had been falsifying records to hide an embezzlement scheme that trial evidence showed had started by 2010, the Sun-Times reported. They ordered the bank to suspend Gembara, who had spent 20 years at the helm after his father Emil Gembara’s retirement. John Gembara was the third generation of his family to run Washington Federal.
“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 of looking at the reality of this situation and your role in it,” she said.
Former Washington Federal CFO Barbara Glusak blew the whistle in 2011 on records tied to Kowalski that she suspected to be falsified — first notifying the bank’s board and then the U.S. attorney’s office, which forwarded them to the FBI. Nothing happened, though, until federal regulators discovered the matter during a routine audit six years later.
Nothing happened, either, when Gembara’s wife notified authorities of “illegal activity” in 2012.
On Tuesday, Kowalski claimed that bank employees signed his name on bank papers without his knowledge, according to Law360. For years, he called himself “Bob the Builder,” on a mission to repair properties to earn the bank money.
“You are absolutely delusional that you are a victim in this case,” Kendall told Kowalski on Tuesday, according to Law360. “The only thing that you have built here is a facade to hide your liability.”
Since the bank’s collapse, members of both families — Kowalski’s brother William Kowalski and his sister Janice Kowalski, and Gembara’s sister Janice Weston — have been charged with crimes related to the embezzlement scheme.
Weston was sentenced to three months in federal prison in May for altering records to dupe regulators. Jan Kowalski was sentenced to 37 months last year for helping Robert Kowalski conceal hundreds of thousands of dollars in assets after filing for bankruptcy amid the broader scandal. William Kowalski confessed to embezzling $190,000 from the bank to purchase a yacht, but the charges against him were dropped after he agreed to cooperate with investigators and pay back the money.
Five former bank employees have been cooperating with an investigation into how Gembara directed them to fool regulators with falsified records. They have yet to be sentenced.
Kowalski, who represented himself before the court, was a challenging defendant for Kendall. He has been in police custody for the past two years for violating a number of Kendall’s orders. In 2022, after he filed “nearly daily motions in his criminal case since it began” — 159 in total — Kendall forbade him from filing future motions, saying they were duplicative.
“To say that Defendant Robert Kowalski is a prolific filer is a significant understatement … [h]is total number of motions to date ... is 153 more than” the case’s defendants combined,” Kendall wrote at the time.
Since the bank was shuttered, the FDIC has recovered roughly $50 million of the $140 million it shelled out to cover Gembara’s loans, the Sun-Times reported.
