Janice Weston entering to the Dirksen Federal Courthouse for her guilty plea and sentencing Wednesday. Weston was senior vice president of Washington Federal Bank for Savings in Bridgeport and the sister of John Gembara, who was the bank’s chief executive officer. Their family ran the bank for three generations.

Janice Weston entering to the Dirksen Federal Courthouse for her guilty plea and sentencing Wednesday. Weston was senior vice president of Washington Federal Bank for Savings in Bridgeport and the sister of John Gembara, who was the bank’s chief executive officer. Their family ran the bank for three generations.

Ashlee Rezin / Sun-Times

Bridgeport bank failure fallout: Dead CEO’s sister pleads guilty in collapse of Washington Federal Bank for Savings

Over seven years, Janice Weston, who was senior vice president of the clout-heavy bank, ordered employees to fool federal regulators by backdating loan documents.

More than five years after federal authorities closed a Bridgeport bank following the sudden death of its CEO John F. Gembara, his sister Janice Weston pleaded guilty Wednesday to fabricating records that might have kept regulators from uncovering a massive embezzlement scheme.

Weston faces up to 30 months in prison when she is sentenced Oct. 20 in a case stemming from the December 2017 collapse of Washington Federal Bank for Savings, which her family had run for three generations.

Weston was senior vice president, compliance officer and a member of the board of directors at the bank that had ties to the Daley family.

There was no indication she knew that her late brother had been running the embezzlement scheme, which federal authorities continue to investigate. Sources said she was in a position, though, to know what was going on at Washington Federal for more than a decade.

Weston, 65, of Orland Park, is among 15 people who have been charged with crimes after banking regulators discovered the fraud scheme at Washington Federal and shut it down on Dec. 15, 2017.

That was less than two weeks after Gembara was found dead with a rope around his neck inside the Park Ridge bedroom of Marek Matczuk, a contractor and bank customer who owed Washington Federal more than $6 million. Authorities say Gembara killed himself.

Matczuk and another contractor, Miroslaw Krejza, are facing trial next month on charges that they embezzled millions from the bank.

Two other bank board members — William M. Mahon, who was a deputy commissioner in the city of Chicago Department of Streets and Sanitation when he was indicted, and George Kozdemba, a retired employee of the Metropolitan Water Reclamation District of Greater Chicago — are set to plead guilty Monday in the bank investigation.

William M. Mahon.

William M. Mahon.

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Six bank employees and two customers have pleaded guilty. Two of them did so having been given deferred-prosecution agreements that could wipe out their convictions.

A jury convicted one of the bank’s largest customers, attorney Robert M. Kowalski, of embezzling $8 million from Washington Federal and concealing more than $560,000 in assets when he went bankrupt. His sister Jan Kowalski pleaded guilty to helping him hide assets from bankruptcy creditors.

The bank’s collapse also ended the political career of Ald. Patrick Daley Thompson, who was representing Bridgeport in the Chicago City Council when he was convicted last year of cheating on his federal income taxes and lying to federal authorities about how much money he borrowed from the bank. He’s on probation now after serving four months in prison.

Former Ald. Patrick Daley Thompson leaves the Dirksen Federal Courthouse on Feb. 14, 2022, after being found guilty of cheating on his tax returns for five years and lying about how much money he got from a crooked Bridgeport bank.

Former Ald. Patrick Daley Thompson leaves the Dirksen Federal Courthouse on Feb. 14, 2022, after being found guilty of cheating on his tax returns for five years and lying about how much money he got from a crooked Bridgeport bank.

Ashlee Rezin / Sun-Times file

Weston — whose two adult sons also worked for the bank — directed three bank employees including Cathy Torres and Brian Fong to backdate a couple of dozen documents between 2011 and 2017 so federal regulators wouldn’t know the bank had violated the federal Currency and Foreign Transactions Reporting Act by lending money without first checking whether the customers were on a list of people who are barred from being able to borrow money from U.S. banks.

“Weston acknowledges that one of the reasons she backdated [Office of Foreign Assets Control] was to deceive the [Office of the Comptroller of the Currency] by falsely portraying to the OCC and the auditors and consultants that Washington Federal complied with its internal policies, to avoid a negative report from those entities,” according to her 20-page plea agreement.

“Weston acknowledges that the altered OFAC reports were capable of influencing the OCC,” which might have become suspicious of the bank’s operating procedures.

In addition to any prison sentence, Weston also could face a $250,000 fine, and it’s likely she will be ordered to make restitution to the bank’s victims.

After the bank’s collapse, the Federal Deposit Insurance Corp. ended up spending nearly $139.8 million to cover the bank’s losses. It since has recovered about $59 million from insurance companies for the bank and its auditors and from the sale of 135 loans and repayments of delinquent loans — including $219,000 that Thompson had borrowed from the bank.

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Click here to read the Sun-Times’ initial investigation of the failure of Washington Federal Bank for Savings.

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