PORTLAND, Maine — A former Cumberland man and KeyBank executive pleaded guilty Tuesday in federal court to authorizing tens of millions of dollars in fraudulent loans and using the money to pay for college educations, vacations and a mistress.
Walter Scott Fox, 56, also known as Scott Fox, who now lives in Canton, Ga., faces up to 30 years in federal prison and a total maximum fine of nearly $20 million, according to court documents.
From 1995 to 2011, as a loan officer for Casco Northern Bank and then KeyBank, Fox authorized more than $14 million in fraudulent loans and lines of credit using the identifies of four real individuals without their knowledge or consent.
He used nearly $8.2 million of the fraudulent proceeds for personal expenses, including his children’s education, family vacations, to support his business, The Boathouse, and to support a mistress, according to court documents. He used more than $5.8 million to keep the loans current and prevent detection of the scheme, according to U.S. Attorney Thomas E. Delahanty II.
Fox failed to report any of this income to the Internal Revenue Service, resulting in a loss in taxes of more than $1.3 million between 2006 and 2011, Delahanty said in a release.
In 2012, when KeyBank denied an increase for one line of credit, the fraudulent loans fell into delinquency. A supervisor grew concerned about the delinquent loans and inquired about the status of Fox’s loan portfolio. Fox then abruptly resigned his position, according to the release.
The case was investigated by the Federal Bureau of Investigation and the IRS.
In addition to a 30-year sentence, Fox could be fined up to twice the gain or loss on the bank fraud charge. He faces imprisonment for up to five years and a fine of up to twice the loss on the tax evasion charge.
According to a plea agreement, Fox will pay restitution of $8.2 million to KeyBank and $1.3 million to the IRS.
On Tuesday, U.S. District Court Judge D. Brock Hornby released Fox on $5,000 unsecured bail. He is scheduled for sentencing on May 28.
Fox’s attorney, Thomas Hallett, did not return a call for comment Tuesday.