Truck Driver Gregg Steinnagel Sentenced to 4 Years for Fake 'Secured' Loans to Distressed Homeowners

Case from 2015 (U.S. Attorney's Office release: April 10, 2015). Published on Scammers.com Oct. 16, 2026; case status is current as of that date.

Gregg E. Steinnagel, a Chicago truck driver, was sentenced on April 10, 2015, to 48 months in federal prison for persuading people to invest in a bogus program of short-term, high-interest loans to distressed homeowners, the U.S. Attorney's Office for the Northern District of Illinois announced [1]. He was ordered to pay $1,734,270 in restitution to 20 victims.

How the scheme worked

According to Steinnagel's guilty plea and government sentencing papers, as described by prosecutors [1]:

1. The partner: Steinnagel worked with Jeffrey Fazzio, now deceased, a restaurant and department store worker who posed as an attorney.
2. The pitch: Victims were told their money would be lent to distressed homeowners and repaid at high interest, with no risk because the loans were secured by real estate.
3. Fake paperwork: They handed victims fabricated promissory notes purportedly signed by the property owners.
4. Lulling payments: Occasional payments of a few hundred or a few thousand dollars built trust and drew larger investments.
5. Where it went: They kept most of the money. Steinnagel admitted using at least some of it to gamble at casinos in the Chicago area, Florida and Nevada.

One victim entrusted her life savings to the pair, and another his retirement money, prosecutors said. Many victims spoke at sentencing. "Mr. Steinnagel preyed on victims who themselves were in financial need," said U.S. District Judge John Z. Lee, who sentenced him at the high end of the guidelines range.

The person sentenced

Gregg E. Steinnagel, 54, Chicago

• Plea (November 2014): one count of wire fraud.
• Sentence (April 10, 2015): 48 months in prison, three years of supervised release, $1,734,270 restitution [1].

Red flags

• "No risk" investments said to be secured by someone else's house.
• A "lawyer" you can't find in the state bar's attorney directory.
• Small early payouts followed by requests to invest more.
• Promissory notes you can't verify with the supposed borrower or the county recorder.

What to do if you're targeted

1. Check any attorney through the Illinois ARDC lawyer search at iardc.org or your state's bar.
2. Look for a recorded mortgage securing any loan you're told you're funding.
3. Report investment fraud to the FBI at ic3.gov and your state securities regulator.

Case status (as of Oct. 16, 2026)

Defendant	Court	Status as of Oct. 16, 2026	Source
Gregg E. Steinnagel, Chicago	N.D. Ill. (Judge Lee)	Pleaded guilty Nov. 2014; sentenced April 10, 2015, to 48 months; $1,734,270 restitution	[1]

The sentence was imposed in 2015; we have not found a source on Steinnagel's current custody status.

Sources

1. U.S. Attorney's Office, Northern District of Illinois, "Truck Driver Sentenced To 4 Years In Prison For His Role In A $1.7 Million Investment Scam," April 10, 2015. https://www.justice.gov/usao-ndil/pr/truck-driver-sentenced-4-years-prison-his-role-17-million-investment-scam

---

Corrections and updates: If you are named in this article, or represent someone who is, and believe anything here is inaccurate or out of date (including a dismissal, acquittal, or change in case status), please contact us at editorandchief@scammers.com. We will review it and update the article promptly.