A federal jury on Friday convicted a former escort of multiple fraud counts for racking up millions of dollars in charges on her boyfriend’s corporate credit card, including trips, cars, jewelry, a personal driver and even breast implants.
The jury deliberated about three hours before finding Crystal Lundberg guilty of five of six counts of wire fraud.
Seated at the defense table in a blue dress, Lundberg, 35, put her hand over her heart and briefly smiled as the verdict of not guilty on the first count was read by U.S. District Judge Elaine Bucklo. Her smile disappeared, however, as the judge read each of the remaining guilty counts.
Bucklo set sentencing for Aug. 9.
Lundberg and her onetime boyfriend, Scott Kennedy, a former Buffalo Grove executive, were charged in 2017 with among the most brazen fraud schemes in recent memory.
According to prosecutors, the couple, who began dating in 2015 after Kennedy paid for Lundberg’s escort services, charged $5.8 million in less than a year and a half to Kennedy’s company, -based drug delivery firm Nemera.
Much of the spending came after Lundberg moved in 2016 with her children and pets to San Diego, where the company unwittingly footed her $12,000-a-month rent for a 7,000-square-foot mansion, according to evidence presented at trial.
While in California, Lundberg spent about $585,000 in a failed attempt to open a medical spa, called The Royalty Room. Additional expenses included two Rolex watches at a combined cost of $60,000, a personal driver for $8,000 a month and two purebred dogs that cost as much as $6,000, according to the prosecution.
She also flew to Miami in 2016 to have breast implants and liposuction done by a surgeon she found on YouTube, prosecutors said.
“He wanted her, and she wanted stuff,” Assistant U.S. Attorney Kathryn Malizia said in her closing argument Friday. “She wanted money. She wanted clothes. She wanted trips. She wanted a mansion. And they were both willing to lie to get what they wanted.”
Kennedy, who was fired from his $175,000-a-year job as manager for Nemera’s Buffalo Grove plant after the fraud was discovered, pleaded guilty to one count of wire fraud last year and agreed to cooperate against Lundberg.
In two days of testimony this week, Kennedy laid out a story of a love-struck divorced man who was willing to do anything to try to make his relationship with Lundberg work — even if it meant committing a crime.
Among the evidence he testified about was an October 2016 email he wrote to Lundberg laying out his worries about their crumbling relationship. At the time, Kennedy was in Greece awaiting her supposed arrival for a romantic getaway to the island of Santorini. Instead she brought her family and never even came to visit him at his hotel, he said.
Adding up the spending by executive and escortWorried that his bosses would discover the fraud at any moment, Kennedy asked Lundberg in the email whether he was “just a bank ” to her.
“You live in a mansion in California buying gadgets, while I live in a hotel,” he wrote.
Later that day, Lundberg texted him back.
“Omg please delete that email itting your committing fraud,” she wrote. “Delete that are you f—— crazy?”
Kennedy testified that he wrote the email because it “seemed like everything I was doing, including breaking the law, was in vain.”
“I’m not getting anything out of this,” he said. “I’m not being loved.”
Federal guidelines call for Kennedy to be sentenced to up to about 6 1/2 years in prison, but prosecutors said in his 20-page plea agreement that they would recommend 3 ½ years behind bars if he continues to cooperate.
Lundberg’s attorney, Glen Jazwiec, argued that Kennedy’s testimony was self-serving and that blame for the fraud laid at the feet of Kennedy himself. He also urged the jury to reject the idea of Kennedy as clueless and lovelorn.
“He’s not dumb. He’s very smart,” Jazwiec said in his closing argument. “He wants you to believe that Crystal Lundberg was behind all of this. Crystal Lundberg was just a beneficiary of his lavishness.”
Jazwiec said that in the end, the scheme to defraud was devised entirely by Kennedy for one simple reason: “To keep Crystal in his life.”
Kennedy testified his financial entanglements with Lundberg started with a $400 payment he made in May 2015 to cover her past-due bill at a suburban extended-stay hotel. Weeks later, he took out a loan to buy her a $30,000 Lexus. By that August, Lundberg had moved into Kennedy’s two-bedroom apartment with her two daughters and two dogs, he said.
“If we were going to try to make a go at it as a couple, I kinda thought it would be permanent,” Kennedy, 45, told jurors.
It didn’t take long for Kennedy’s finances to spiral out of control. In October 2015, his American Express bill suddenly jumped to more than $40,000, according to records shown to the jury. His checking was overdrawn. Bills for s he’d never opened — the Gap, Victoria’s Secret — were rolling in, all charged to their limits.
“My credit cards were all maxed out, and I was living hand to mouth, paycheck to paycheck,” Kennedy said.
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