Listen to this article

URBANA — A McHenry County farmer was sentenced Friday to three years in prison for defrauding Busey Bank out of $2.96 million.

Timothy A. Cosman, 44, of Harvard, pleaded guilty in March to one count of bank fraud, and federal prosecutors dropped the two additional counts he faced.

After prison, Cosman will face five years of supervised release and have to pay $2.96 million in restitution.

Cosman, who was an operating engineer before deciding to become a farmer alongside his father, was indicted in May 2018 by a federal grand jury.

The fraud began with his application for a loan from Busey Bank in 2013, federal prosecutors said, on which he claimed that his father’s property — including farming machinery, equipment and trucks — belonged to him. And he did it again in 2014, prosecutors said in their sentencing recommendation.

But after being told he’d need to put forward more collateral for the loan, prosecutors said, he created a fake promissory note indicating his father owed him $1.5 million.

Next, in 2015, he received a $475,000 loan from Busey to purchase cattle, but prosecutors said he instead “falsified an invoice for 250 head of cattle to continue to deceive the bank.”

They also said he forged the signature of a Busey Bank employee on a $33,391 check.

His lawyer, Huma Rashid, tried to paint a more sympathetic picture of her client, describing Cosman as a law-abiding citizen who made a mistake by going into business with his father.

“Regretfully, Tim made several bad decisions. He submitted false documents on several occasions and did what he could to keep the scheme going,” Rashid said. “He was not spending the money he received from Busey Bank on fast cars and mistresses and vacations and drugs, or any other typical indicators of a lavish lifestyle. Rather, he used the money to try to keep the farm operating.”

She said Cosman is committed to paying Busey back and has cooperated with the government. She asked that he receive a sentence of one day in prison and five years of supervised release.

“The farm was going under; we were losing money hand over fist; my dad was making it worse and sticking me with the debt, and I was dumb and desperate,” Cosman said in the sentencing recommendation. “But I’m going to make it right if it kills me. Because at the end of the day it’s no one else but me. The buck stops here, and I’m going to take that buck and pay it back to who I owe it to.”

Cosman filed for bankruptcy in 2016, a matter that is still pending.

Prosecutors requested a 50-month prison sentence, followed by five years of supervised release.

“As a result of the defendant’s scheme and misrepresentations, the defendant subjected Busey Bank to a potential loss of $8,950,000,” Assistant U.S. Attorney Ryan Finlen wrote. “Even with Busey Bank’s diligent efforts to recover its losses from the fraudulently obtained funds, Busey Bank suffered a loss of $2,963,841.54.”

In their recommendation, prosecutors included a victim impact statement from Busey Senior Vice President Steven Henderson.

“In order to make up for the losses sustained, Busey will have to secure $240 million in new loans,” he said. “This number was derived by achieving a minimal rate of return of 1.25 percent on the new loans.”

He said the bank has spent $63,800 just on the legal fees and expenses associated with negotiating with Cosman about a possible partial discharge of his debts.

“Even after admitting to the extensive fraud, Mr. Cosman has continued to fight for a substantial discharge, but Busey Bank is no longer willing to agree to any discharge,” Henderson said.

He said the fraud “did not just affect the bottom line of Busey Bank. It has a trickle-down effect, putting our associates, customers and communities at risk as well.”