Truck Driver Sentenced To 4 Years In Prison For His Role In A $1.7 Million Investment Scam

Topics:  Gregg E. Steinnagel

U.S. Attorney’s Office
Northern District of Illinois
10 April 2015

FOR IMMEDIATE RELEASE

CHICAGO — A Chicago man was sentenced today to 48 months in prison by U.S. District Court Judge John Z. Lee for scamming people whom he had persuaded to invest in a bogus lending program involving short-term, high-interest loans to distressed homeowners. The defendant, GREGG E. STEINNAGEL, was also ordered to a three year term of supervised release and to pay $1,734,270 in restitution to 20 victims of the fraud scheme. Steinnagel was ordered to report to the Bureau of Prisons on July 10, 2015.

According to sentencing papers filed by the government, one of the victims entrusted her life savings to Steinnagel, a truck driver, and to a deceased co-schemer named Jeffrey Fazzio, a restaurant/department store worker who was posing as an attorney. Another victim entrusted Steinnagel and Fazzio with retirement money that he had saved. “It did not seem to matter to Steinnagel and Fazzio whether or not their victims could afford to lose any money. Steinnagel and Fazzio were willing to defraud anyone who was willing to provide them with money,” the government argued in a sentencing memorandum. Many of the victims of Steinnagel’s fraud were present and spoke at the sentencing.

“Mr. Steinnagel preyed on victims who themselves were in financial need,” said U.S. District Judge John Z. Lee in sentencing the 54-year-old Steinnagel to a prison term at the high end of the range established by federal sentencing guidelines.

In November 2014, Steinnagel pled guilty to one count of wire fraud, admitting that he and Fazzio led victims to believe that their money would be invested and repaid at high rates of interest, with no risk of loss because their investment money was supposedly secured by real estate. As evidence that their money had been invested, Steinnagel and Fazzio provided victims with fabricated promissory notes purportedly signed by the owners of the real estate securing the victims’ investments. The defendants lulled victims with occasional cash payments, in amounts of several hundred dollars or several thousand dollars, to gain their trust and induce them to continuously invest larger amounts of money. Steinnagel and Fazzio then kept most of the victims’ money and failed to repay them. Steinnagel admitted to using at least some of the victims’ funds to gamble at casinos in the Chicago area, Florida, and Nevada.

The sentence was announced this afternoon by Zachary T. Fardon, United States Attorney for the Northern District of Illinois, and Robert J. Holley, Special Agent-in-Charge of the Federal Bureau of Investigation’s Chicago office. The government was represented by Assistant U.S. Attorney Brian Havey.