A Western Washington man who bilked Sons of Norway members around the Northwest out of more than $9 million pleaded guilty Thursday in federal court to money laundering and mail, wire and bank fraud.
Many of Mike Calozza’s 150 victims live in the Spokane-Coeur d’Alene area.
The first of the 11 counts to which Calozza entered pleas in U.S. District Court in Seattle involved a $20,000 check he received from Robert and Eunice Evenson of Hayden Lake.
As in most of the other cases, Calozza told the Evensons the funds would be invested in tax-exempt securities yielding as much as 20 percent.
Calozza, the Seattle-based regional manager for the Sons of Norway, said he was making the offer only to special clients buying insurance through the fraternal organization.
He also tapped member funds by cashing in or taking loans against their accounts. In some cases he forged loan applications using member names, then took the money.
The high-yield investments did not exist. According to Kate Pflaumer, U.S. attorney for Western Washington, much of the money was used to feed Calozza’s gambling habit and a lifestyle that included a $1 million home in Snohomish.
To keep the scheme afloat, about $2 million was returned to early investors, she said.
The activity began in 1985 and continued until last fall, when a Sons of Norway audit detected the scams.
Calozza, who was fired Sept. 22, confessed to his actions and has been cooperating with investigators, Pflaumer said.
In an unusual twist, he also acknowledged in his plea agreement that Calozza is not his birth name, but one he assumed when he moved to Washington about 20 years ago.
Shortly after, the agreement says, Calozza “encountered” federal law enforcement officials who enlisted him in some potentially dangerous investigations.
Details were not given, but Calozza was not involved in the federal witness protection program. As part of the agreement, officials will not disclose Calozza’s real name.
Assistant U.S. Attorney Jerald Olson said he would offer no additional information on Calozza’s background.
Sentencing is scheduled for Nov. 2 before Judge William Dwyer. Calozza could receive as much as 30 years in prison and fines of $1 million.
Olson said the King County prosecutor’s office has agreed not to file additional charges in the case if Calozza’s sentence falls near a range between 70 and 87 months.
There is little hope of recovering money from Calozza, Olson said. His only asset, the home, is tied up in lawsuits brought by his victims, a bankruptcy filing by his wife and two liens.