Nonprofit Scammed Out Of $150K

A nonprofit business association was allegedly scammed out of $150,000 by a former employee of the City of Rochelle, Ill. Scott Koteski, 58, of Rochelle, was charged with one count of wire fraud and faces up to 20 years in prison and a fine of $250,000, or twice the gross gain or gross loss resulting from that offense, whichever is greater.

The complaint was filed last week by the U.S. Attorney’s Office in Rockford, Ill.

Koteski was an employee of the City of Rochelle and was appointed to the board of directors of a nonprofit business association, the name of which was withheld. The nonprofit provided broadband Internet services to municipalities in northern Illinois.

In 2011, Koteski was appointed treasurer of the association, responsible for invoices and billing member municipalities, and was later given signatory authority on the association’s bank account.

Prosecutors allege that 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. He allegedly wrote checks to himself from the association’s bank account and deposited them into his personal bank account.

He allegedly attempted to conceal the transactions by writing false information on the memo line to make it appear the checks were for repayment of personal money Koteski spent for the association but Koteski was not entitled to reimbursement.

Koteski in 2018 allegedly 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 a loan.