Mont Vernon lawyer convicted of using fraud to get $8 million in loans

·3 min read

Dec. 27—A Mont Vernon attorney who federal officials claim lied to obtain millions of dollars in five different loans has been convicted of bank fraud and other charges.

Joseph Foistner, 67, of Mont Vernon, was convicted Thursday of bank fraud, wire fraud, money laundering, and making misrepresentations during bankruptcy proceedings in U.S. District Court in Concord. The verdict was returned by Senior U.S. District Judge Paul Barbadoro, following a two-week bench trial.

According to federal prosecutors, Foistner was a licensed attorney in Massachusetts when he used fraudulent means to apply for over $8 million in loans and laundered money between 2015 and 2018.

Foistner didn't have any paying clients and earned no income through his law firm, prosecutors said. He submitted misleading documents suggesting he was operating a lucrative law firm, the U.S. Attorney's office said in a news release.

"For example, he claimed that he was a 'seasoned attorney' with international clients and that his firm earned over a million dollars in annual income," prosecutors said in a news release. "In fact, all the firm's purported income was based upon bogus, unpaid invoices the firm submitted to entities that the defendant controlled, including bankrupt entities."

Foistner also made other false statements to obtain bank loans, prosecutors claim, including lying about whether he was involved as a party to any lawsuits and denying that he had an interest in other companies, and falsely represented he earned a salary by mischaracterizing loan proceeds as a salary.

"In one of the bank fraud schemes, the defendant submitted false information to obtain a loan by claiming falsely that his wife was earning over $200,000 per year as a paralegal," prosecutors said in a news release.

Each of the loans made to Foistner were backed by either the Department of Veterans Affairs or the Small Business Administration.

Prosecutors claim Foistner also committed several crimes during Chapter 7 bankruptcy court proceedings in 2017 and 2018, falsely denying that he held or controlled property owned by others when he actually controlled funds held in the name of a business, and making false statements under oath by lying about what happened to the proceeds of one of the fraudulent loans.

Foistner is scheduled to be sentenced on April 4, 2022.

"While no one is entitled to commit fraud, this defendant's crimes were particularly egregious because they were committed by an attorney," said acting U.S. Atty. John Farley in a statement. "The evidence in this case demonstrated that Foistner engaged in a shocking pattern of fraudulent and deceitful conduct to obtain millions of dollars from financial institutions and that he told a host of lies in his efforts to further his scheme and cover his tracks during bankruptcy proceedings."

"Joseph Foistner took advantage of programs that were designed to help veterans achieve home ownership, and small businesses expand and develop. In fraudulently collecting millions of dollars, his lies and deceit have not only hurt himself, but every citizen whose tax dollars support these federally funded programs," said Joseph R. Bonavolonta, Special Agent in Charge of the FBI Boston Division, in a statement.

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