MADISON, Wis. - A Madison-area businessman charged with 12 federal counts of financial fraud and misrepresentation is facing an additional charge of embezzlement from an employee 401(k) fund.
Christian Peterson, 44, Fitchburg, was charged in an indictment returned by the grand jury on July 11, 2012, with four counts of bank fraud, four counts of making a false statement to a financial institution and four counts of money laundering.
A superseding indictment adds one count of embezzlement from an employee 401(k) fund to the charges Peterson faces.
Peterson is the former owner of the Pancake Cafe, Fitchburg's Country Inn & Suites and the now-closed Good Times Restaurant.
During the time period related to the charges of the indictment, Peterson operated businesses in Wisconsin and Nevada related to scrap foam and the manufacture of carpet cushion, built and operated a hotel in Wisconsin, and was involved in real estate development in Dane County.
The superseding indictment alleges that Peterson misrepresented to banks that loans and a business line of credit were intended for a legitimate business purpose when, in fact, he used all or a portion of each loan and line of credit to gamble at casinos or for personal expenses.
The superseding indictment also alleges that Peterson claimed that certain accounts receivable were loans when, in fact, they were the result of gambling debts.
In the new count, the superseding indictment alleges that he took nearly $30,000 from an employee pension benefit plan and then used the money to, among other things, make a $10,000 loan payment for another business venture and to pay his former wife $7,500 in court-ordered alimony.
If convicted, Peterson faces a maximum penalty of 30 years in federal prison on each bank fraud and false statement charge, a maximum penalty of 10 years on each money laundering charge, and a maximum penalty of five years on the embezzlement charge.
In October 2012, Peterson pleaded not guilty to the 12 federal counts.
Jim Spahr, a former Peterson business partner, told WISC-TV in October that it took years of gathering evidence, but he worked closely with the FBI to eventually bring the federal charges against Peterson.
Spahr said all of the money involved is presumably gone -- some of the incidents date back to 2006 -- but in 2010, Peterson filed for bankruptcy, owing more than $25 million.
Spahr said it not only affected him but taxpayers, as well, because a lot of that money was insured by the Federal Deposit Insurance Corp.
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