MADISON, Wis. -

The second of two Fitchburg men accused in a local money laundering scheme has pleaded guilty in U.S. District Court in Madison.

Steve Schmidt, 56, pleaded guilty Tuesday to a money laundering conspiracy.

Schmidt's co-conspirator, Darren Ulatowski, 47, of Fitchburg, pleaded guilty to mail fraud on Feb. 4.

U.S. District Judge William Conley scheduled sentencing for both men for May 17.

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 Dec. 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, 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, a floral shop in Verona, 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 Tuesday'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, according to prosecutors.

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 U.S. Attorney Vaudreuil in a statement. "My office will continue to partner with federal, state, and local law enforcement investigators in aggressively pursuing individuals who participate in fraud."

The charges against Schmidt and Ulatowski were the result of an investigation conducted by IRS Criminal Investigation.