News and Press Releases

Fitchburg Florist and Party planner Pleads Guilty to Fraud Scheme

FOR IMMEDIATE RELEASE
February 12, 2013

Madison, Wis. - John W. Vaudreuil, United States Attorney for the Western District of Wisconsin, announced that Steve Schmidt, 56, Fitchburg, Wis., pleaded guilty today in U.S. District Court in Madison. Schmidt pleaded guilty to a money laundering conspiracy. Schmidt's co-conspirator, Darren Ulatowski, 47, Fitchburg, pleaded guilty to mail fraud on February 4, 2013.

U.S. District Judge William Conley scheduled sentencing for both men for May 17, 2013. Schmidt faces a maximum penalty of 20 years in prison, a $500,000 fine, and a three-year term of supervised release. Ulatowski faces a maximum penalty of 20 years in prison, a $250,000 fine, and a three-year term of supervised release.

On December 8, 2011, a federal grand jury in Madison returned a 22-count mail and wire fraud indictment that charged both Schmidt and Ulatowski with participating in a scheme to defraud It's Your Party (IYP), a Madison party event company where Schmidt worked. 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 (HOF), a floral shop in Verona, Wis., owned by Ulatowski, in order to keep HOF solvent and operational. In his plea agreement, Schmidt agreed that the fraud loss amount for the scheme to defraud totaled $323,948.

At today's plea hearing, the government presented evidence of the defendant's scheme to defraud, including Schmidt's misuse of his IYP corporate credit card to pay for personal trips for Schmidt and Ulatowski and to pay for gift store inventory for HOF. In addition, Schmidt misused the IYP payroll system to issue IYP payroll checks to IYP contract floral designers doing work for HOF and to issue checks to vendors to pay for products purchased by Schmidt and Ulatowski for HOF. Schmidt was fired from IYP in September 2007, after the owner of IYP first learned of some of Schmidt's fraudulent activity.

"The two defendants caused extreme financial and emotional distress for the owner of the business victimized by their actions," said United States Attorney Vaudreuil. "My office will continue to partner with federal, state, and local law enforcement investigators in aggressively pursuing individuals who participate in fraud."

Kelly Jackson, Special Agent in Charge of the IRS Criminal Investigation office which led the investigation noted, "These guilty pleas are the rightful acceptance of responsibility by both Schmidt and Ulatowski for their role in victimizing an unsuspecting business which invested genuine trust in both of them." Jackson added, "This outcome is an accumulation of the collaborative, diligent efforts between IRS Special Agents and the U.S. Attorney's Office."

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

 

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