Long Grove man pleads guilty in Ponzi scheme

A Long Grove man has pleaded guilty to defrauding financial institutions in an alleged Ponzi scheme.

Francis Alan Schmitz, 59, filed the plea Friday and remains in federal custody pending sentencing set for Nov. 5.

According to the plea agreement, as head of Long Grove Real Estate Partners, most recently based in Arlington Heights, Schmitz claimed to be the beneficiary of a multi-million-dollar trust fund. He used the fake trust to secure a series of loans and lines of credit, making fraudulent claims about his income and net worth all along the way.

From 2004 to earlier this year, Schmitz amassed $6 million in loans from six banks, including the Harris Bank and First Midwest Bank, and acknowledged in the plea that "victims in the scheme ultimately lost more than $3 million." He pleaded guilty to a charge involving false paperwork supposedly sent from Sarasota, Fla.

The single charge carries a maximum penalty of 30 years in prison, restitution and a fine of twice the gross amount lost. Yet prosecutors agreed to a sentencing range of 6½ to 8 years and will recommend a sentence at the short end of that range, along with restitution.

Schmitz will be sentenced in the case by U.S. District Court Judge Rebecca Pallmeyer.

Schmitz was arrested and charged with mail fraud in May. He previously worked as a vice president with the Northern Trust Co. until the mid-1990s.