Former Rochelle city employee charged with defrauding nonprofit

ROCKFORD – A former Rochelle city employee was charged with fraudulently obtaining at least $150,000 from a nonprofit organization, according to a criminal charge filed today by the U.S. Attorney’s Office in Rockford.

Scott Koteski, 58, of Rochelle, was charged with one count of wire fraud for writing himself checks from the nonprofit association in which he served as treasurer.

According to investigators:

Koteski was an employee of the City of Rochelle and was selected by the city to sit on the board of directors of a nonprofit business association that provided broadband internet technology to smaller municipalities in northern Illinois.

He became treasurer of the organization in 2011, handling the invoicing and billing of the member municipalities, and had signatory authority on the association’s bank account since February 2012.

According to the information, from September 2012 through April 2018, Koteski stole at least $150,000 by writing numerous checks to himself from the association’s bank account, which he deposited into his personal bank account for his personal benefit. Koteski concealed his acts by writing false information on the memo line to make it appear the checks were for reimbursement of personal monies Koteski spent for the association when, in fact, Koteski was not entitled to reimbursement.

In 2018, Koteski 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 his loan.

Wire fraud carries a maximum sentence of 20 years in prison, a term of supervised release of up to 3 years following imprisonment, and a fine of up to $250,000, or twice the gross gain or gross loss resulting from that offense, whichever is greater.

Koteski will be arraigned on a date yet to be determined in U.S. District Court in Rockford.

The charge was announced by John R. Lausch Jr., United States Attorney for the Northern District of Illinois, and Emmerson Buie Jr., Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation. The Illinois State Police assisted in the investigation.

The government is represented by Assistant U.S. Attorney Scott R. Paccagnini.