News and Press Releases

Former Cumberland Man Sentenced to 10 Years
for Bank Fraud and Tax Evasion

FOR IMMEDIATE RELEASE
June 26, 2014

Contact: Halsey B. Frank
Assistant United States Attorney
Tel: (207) 780-3257

Portland, Maine: United States Attorney Thomas E. Delahanty II announced that Walter
Scott Fox, 56, formerly of Cumberland, Maine, and now of Canton, Georgia, was sentenced in
U.S. District Court by Judge D. Brock Hornby to 10 years in prison and 3 years of supervised
release for bank fraud and tax evasion. He was also ordered to pay over $9,500,000 in
restitution. At the conclusion of the sentencing, he was remanded into the custody of the United
States Marshals Service. Fox pleaded guilty on February 4, 2014.

According to court documents, from 1995 until 2011, Fox used his position as a loan
officer at Casco Northern Bank and at its successor, KeyBank, to originate or authorize over
$14,000,000 in fraudulent loans and lines of credit using the identities of four real individuals,
without their knowledge or consent. He used over $5,800,000 of the fraudulent proceeds to keep
the loans current and prevent the detection of his scheme. He used almost $8,200,000 for
personal expenses including to pay for his children’s educations and family vacations, and to
support his business, “The Boathouse.” Fox failed to report receiving any of this income to the
Internal Revenue Service (“IRS”) causing a tax loss of over $1,300,000 between 2006 and 2011.

The scheme was discovered in 2012 when KeyBank denied an increase for one of the
credit lines because it did not fit the model for its community development loans. With no funds
available to make payments and keep the scheme afloat, all the fraudulent loans became
delinquent by August, 2012. Fox abruptly resigned his position at KeyBank on September 7,
2012 when a supervisor became concerned about the delinquent loans and made inquiries about
the status of his loan portfolio.

Judge Hornby observed that the sentence was needed to send a message, promote respect
for the law and provide just punishment because Fox used the proceeds of his fraud to fund a
lifestyle that most people cannot afford.

The case was investigated by the Federal Bureau of Investigation and IRS - Criminal
Investigations.

 

 

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