Two men from Illinois have been sentenced to federal prison for defrauding banks and laundering money through their construction company.
Erik Richard Jones, aged 46, and Mitchell Allen Melega, aged 38, received multi-year prison sentences on July 23. They were convicted of conspiracy to commit bank fraud, bank fraud, and money laundering. Jones, who resides in Colona, Illinois, has been sentenced to 4½ years in federal prison. He will also be placed under five years of supervised release.
Melega, who hails from Orion, Illinois, received a sentence of 6 years, which will be followed by five years of supervised release.
In the federal system, parole does not exist.
The court has also mandated that both defendants must pay $4.8 million in restitution.
During the sentencing hearing before U.S. District Judge James E. Shadid, the government presented evidence indicating that Jones and Melega collaborated on a scheme between 2016 and 2017. The objective of this scheme was to deceive First Midwest Bank in Moline, Illinois, by providing them with counterfeit documents. This fraudulent act was carried out with the intention of persuading the bank to grant loans to I-80 Equipment, a company based in Colona, Illinois, for the purpose of purchasing vehicles and making improvements.
Jones, the owner of I-80 Equipment, along with Melega, the controller, proceeded to divert loaned funds to unauthorized purposes. They also instructed other employees of the business to provide false information in order to support their conspiracy and fraudulent scheme.
Furthermore, they redirected the funds from a real estate loan provided by Northwest Bank in Davenport, Iowa. Originally intended to finance the apartment complex renovations purchased by Jones, these proceeds were instead used for different purposes. This included paying off a loan unrelated to Jones’s family members and covering unrelated business expenses of I-80 Equipment.
During the sentencing hearing, the judge also acknowledged the sophisticated nature of the scheme. This involved a combination of altering legitimate documents and fabricating false ones. The scheme included a staggering 110 vehicle purchases and spanned over an extended period of time.
Both men faced charges in October 2020 in a 12-count indictment, which included conspiracy to commit bank fraud (Count 1), bank fraud (Counts 2 through 9), and money laundering (Counts 10 through 12). In September 2023, Jones admitted guilt to all counts of the indictment, while Melega followed suit in March 2024, pleading guilty to the same charges.
The penalty for participating in a conspiracy to commit bank fraud is a maximum of 30 years for each count. If found guilty of bank fraud, the penalty is also up to 30 years for each count. Additionally, the penalty for money laundering is up to 10 years of imprisonment for each count.
“Our office is fully committed to prosecuting these serious financial crimes,” stated U.S. Attorney Gregory Harris. He emphasized that the actions undertaken by the defendants result in substantial harm to banks and pose a threat to the stability of our financial system. Harris expressed his gratitude towards federal and local law enforcement partners for their unwavering dedication to these investigations and cases.
The case was investigated by multiple law enforcement agencies, including the Internal Revenue Service, Criminal Investigation Division; the Federal Deposit Insurance Corporation, Office of Inspector General; the Federal Bureau of Investigation, Springfield Field Office; and the Illinois Secretary of State Police. The government in the prosecution was represented by Assistant U.S. Attorneys John Mehochko and Jennifer Mathew.
