Wisconsin home construction contractor sentenced for bank fraud, money laundering

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Ross Schlomann was sentenced Wednesday to five years in federal prison after being convicted of bank fraud and money laundering. Schlomann was also ordered to pay $2.1 million in restitution.

According to court records, Schlomann is a former home construction contractor for Refurbs Properties LLC, which was based in Fremont. The investigation revealed that Schlomann defrauded more than a dozen victims whose homes he had promised to build.

The victims paid Schlomann substantial sums of money, yet they saw little or no work done despite Schlomann’s representations, according to court documents. Schlomann accepted the victims’ money, made false statements to have the money disbursed by the applicable bank, and then used the money for other purposes, including covering shortages on previous projects. In total, the victims lost $2.1 million.

”To keep his scheme going, Mr. Schlomann made repeated false statements and ultimately caused over $2 million in losses to individuals looking to build homes,” said Gregory J. Haanstad, United States Attorney for the Eastern District of Wisconsin, in a statement. “I commend the hard work of all involved in seeking justice for the victims in this case,” Haanstad added.

“Ross Schlomann not only betrayed the trust of his clients, but he also undermined the very foundation of the construction industry,” said Ramsey Covington, acting special agent in charge, IRS Criminal Investigation, Chicago Field Office, in a statement.

“His actions represent a grave violation of ethical standards and have left lasting scars on those he victimized. IRS Criminal Investigation will continue to work diligently to ensure that those who exploit and defraud others are held accountable.”

In sentencing Schlomann, Senior United States District Judge William Griesbach noted this was a “sophisticated Ponzi scheme” and an “egregious betrayal of trust.” Judge Griesbach stressed that Schlomann victimized young families who were seeking to design and build their dream homes.

This case was investigated by Internal Revenue Service (IRS) Criminal Investigation and the Outagamie County Sheriff’s Office. Assistant United States Attorney Alex Duros prosecuted the case.