LOUISVILLE, Ky. (WDRB) -- A former Bullitt County official, who for years has been accused of stealing hundreds of thousands of dollars from the beneficiaries of estates he was managing, pleaded guilty in federal court to wire and bank fraud on Tuesday.
John Schmidt is facing a maximum of 80 years in prison and a $2.5 million fine, as well as more than $300,000 in restitution, for stealing from two separate trusts between Sept. 2014 and Jan. 2019 to use for his own personal expenditures.
Assistant U.S. Attorney Stephanie Zimdahl told U.S. District Court Judge David Hale that the prosecution would be asking for the lowest end of the sentencing range but did not specify what that would be and declined to comment after the hearing.
While Schmidt is likely to go to prison, Judge Hale will ultimately decide the sentence on Jan. 4.
Hale told Schmidt he would be on supervised release after having to report to the U.S. probation officer after he served a prison sentence.
Schmidt talked only briefly, to answer questions from the judge, saying at one point he was "guilty, your honor."
Schmidt, a former Bullitt County master commissioner and county public administrator, stole more than $435,000 from the estates, sometimes to pay back money missing from the master commissioner account, Zimdahl said.
A master commissioner assists circuit courts, in part, by conducting sales of foreclosed property to satisfy liens, mortgages or claims of ownership.
Other times, he stole money to pay back clients he owed money to in his legal practice or just for personal use, she added. He has already paid some restitution.
Schmidt, 67, will be out on bond until his sentencing. His attorneys declined to comment after the plea hearing.
A grand jury indicted him May 2 on one count of wire fraud and two counts of bank fraud. The FBI and Kentucky State Police investigated the case.
Charges of abuse of public trust and theft filed in state court by Hillview police are still pending.
A court hearing is scheduled in Bullitt County for Oct. 27.
Schmidt was appointed as the Bullitt County master commissioner in 1992.
Numerous state audits documented missing money — $67,000 in 2005, for example — while a 2011 audit included an agreement that Schmidt would reimburse $52,000 to the master commissioner account, a WDRB investigation found.
Schmidt was quietly removed from his court-appointed position in 2019. Since then, two lawsuits filed in Bullitt Circuit Court claim he stole more than $400,000 from estates he was managing.
For decades, Schmidt "was lining his own pockets with money that belonged either to his clients or the state of Kentucky," said attorney Laura Landenwhich, who represents the beneficiaries of the estate of Leo Gaston, a Shepherdsville furniture store owner who died in 1990.
In 2021, a state commission that oversees court conduct found that Schmidt was guilty of misconduct and had misappropriated $81,000 in proceeds from a foreclosed property.
The litany of audits and other findings raised questions about why Schmidt hadn't faced criminal charges or how he kept a job controlling state funds for decades.
This story may be updated.
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