News and Press Releases

Two fitchburg men detained pending trial

April 18, 2012

Madison, Wis. - John W. Vaudreuil, United States Attorney for the Western District of Wisconsin, announced today that Steve Schmidt, 54, and Darren Ulatowski, 46, both of Fitchburg, Wis., had their pretrial release conditions revoked yesterday after a two-day detention hearing.

U.S. Magistrate Judge Stephen L. Crocker ordered both defendants detained and immediately jailed, after finding that both men committed bankruptcy fraud relating to House of Flowers, a floral and gift shop business located in Verona, Wis. Magistrate Judge Crocker found that Schmidt and Ulatowski had violated a condition in their release order that prohibited them from committing any federal, state, or local crime while on release.

Schmidt and Ulatowski were placed on conditions of release by Magistrate Judge Crocker on December 8, 2011, after being arraigned on a 22-count mail and wire fraud indictment that charged both men with participating in a scheme to defraud a Madison party event company called It's Your Party ("IYP"). The indictment alleged that the defendants used a variety of methods to embezzle money and products, and to misuse property and personnel from IYP for their own personal purposes, which included, among other things, the funding of House of Flowers in order to keep it solvent and operational.

At yesterday's detention hearing, the government argued that Schmidt and Ulatowski engaged in a scheme to defraud the bankruptcy trustee by continuing to operate House of Flowers and embezzling money and property from the bankruptcy estate, after the business had filed for bankruptcy on March 5, 2012.

At the hearing, Magistrate Judge Crocker explained that he was jailing both men because "I can't trust them." The magistrate judge explained that the government's evidence showed a pattern of deceit and lies which led the magistrate judge to find that he could not trust the defendants to follow any further conditions of release. The magistrate judge ordered both men jailed pending trial on the mail and wire fraud case, which is scheduled to begin May 29, 2012, in U.S. District Court in Madison.

The charges against Schmidt and Ulatowski were the result of an investigation conducted by the Internal Revenue Service, Criminal Investigation Division. The prosecution of the case has been handled by Assistant U.S. Attorneys Daniel J. Graber and Kevin F. Burke.

You are advised that a charge is merely an accusation and that a defendant is presumed innocent until and unless proven guilty.


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