Former dealer gets five years for fraud

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A former boat dealer who spent years on the run in Brazil was sentenced June 7 to five years in prison in connection with fraud schemes.

Leonard Kolschowsky, 68, of Stillwater, Minn., had pleaded guilty March 21, acknowledging he was responsible for nearly $1 million in losses related to a false loan application and other fraudulent conduct, according to U.S. Attorney John W. Vaudreuil of the Western District of Wisconsin. Five other counts in an indictment against Kolschowsky were dismissed at the prosecution’s request.

Beginning in 2000, Kolschowsky, then an owner of now-defunct Boat Depot in Minong, Wis., executed schemes to defraud financial backers of the Skeeter and bass boat dealership, defrauded others through a series of false loan applications for boats allegedly sold but were not, and concocted a bankruptcy scheme to conceal property rightfully belonging to the creditors of the business. Specifically, Kolschowsky pleaded guilty to misleading Citizens Bank in Jackson, Mich., in order to obtain a boat loan. He told the bank someone with the initials J.M. wanted to borrow $20,000 to buy a Crestliner boat and a Yamaha engine, but he knew no sale would occur.

In 2003 Kolschowsky began to negotiate a guilty plea but fled the country to avoid prosecution. He eventually was found in Brazil and was arrested in January 2008. He spent two years in prison in that country, trying to avoid extradition. The time he served in Brazil will be credited toward his U.S. prison sentence. He was extradited last November to the United States.

At sentencing, Chief U.S. District Judge William C. Conley said Kolschowsky’s flight to avoid prosecution not only delayed justice but also left his business partners “holding the bag” for losses related to the schemes.

Vaudreuil agreed, noting the two years that Kolschowsky spent in the Brazilian prison. “It simply does not pay to run,” he says.

No agreement has been reached on restitution. A hearing was scheduled for July 15 to determine what Kolschowsky owes the victims.

This article originally appeared in the August 2011 issue.