MINNEAPOLIS -- William Felix Schluter, 54, of Starbuck, pleaded guilty Friday to a federal conspiracy charge for conspiring with others to steal more than $1 million in loan proceeds from the First Bank of Kensington.
According to a news release from the U.S. Attorney's office in Minneapolis, Schluter entered the plea in federal court in Duluth. He faces up to five years in prison. No sentencing date has been set.
In the plea agreement, Schluter admitted that from 2002 to 2006, he conspired with an unnamed individual to obtain money from the bank through straw borrowers. The straw borrowers were arranged to bypass the limits on how much money one borrower may receive in a loan. The charges included that the straw borrowers had no ability to pay back the loans and that Schluter comingled the funds with his various ownership interests to cover the conspiracy. He also created and submitted false loan-purpose statements and bank records and once he secured the loan money, used it for his personal use.
