A press release from the U.S. Attorney’s Office:
FORMER MOECHERVILLE WATER DISTRICT BOARD PRESIDENT CHARGED WITH ALLEGEDLY STEALING WATER DISTRICT FUNDS
CHICAGO — A former Moecherville Water District (MWD) board president appeared in U.S. District Court in the Northern District of Illinois today on federal charges for allegedly stealing $33,597 in property mortgaged and pledged to the Secretary of Agriculture acting through the U.S. Department of Agriculture, Rural Development (USDA-RD), over the course of three months.
The MWD is a not-for-profit corporation that supplied water to households located in the Moecherville neighborhood of Aurora, Illinois.
The defendant, MARK McDONALD, 57, of Aurora, was MWD board president, and in that capacity, was responsible for depositing the MWD customers’ payments into the water district’s bank account and writing checks to pay the expenses and purchase goods and services for the benefit of the MWD.
McDonald was charged with 15 counts of disposal and conversion of property mortgaged and pledged to the Secretary of Agriculture, acting through the USDA-RD; one count of making a false statement; and three counts of filing a false tax return in an indictment that was returned by a federal grand jury April 7. The offenses are alleged to have been committed between April 2009 and February 2013.
McDonald was arraigned today before U.S. District Judge Young B. Kim and released on an unsecured $4,500 bond. His next status date is set for April 28 before U.S. District Court Judge Robert W. Gettleman.
According to the indictment, between 2005 and 2006, the MWD received $2.7 million in loans from the USDA-RD for the reconstruction of the MWD’s water distribution facilities.
The MWD secured repayment of the reconstruction loans by mortgaging and pledging to the Secretary of Agriculture, acting through the USDA-RD, the MWD’s property and assets, and the revenues collected from the operation of the water facility, which included water payments made by the MWD’s customers.
In October 2010, the United States filed a foreclosure complaint against the MWD due to the MWD’s failure to timely repay the USDA-RD reconstruction loans.
Also in October 2010, a federal judge appointed the Illinois Rural Water Association (IRWA) to be the Receiver of the MWD and authorized IRWA to take custody, control, and possession of the MWD’s facilities, assets, and funds.
The indictment alleges that, on 15 separate occasions between July 2010 and October 2010, and during his tenure as MWD board president, McDonald disposed of and converted to his own use MWD property in the form of cash water payments and bank account funds, which was mortgaged and pledged to the Secretary of Agriculture, acting through the USDA-RD.
The indictment also seeks forfeiture of $33,597, the total amount of MWD property that McDonald is alleged to have disposed of and converted to his own use illegally.
McDonald also is accused of making a false statement to agents of the USDA-Office of the Inspector General and the Internal Revenue Service in the course of their investigation into the disposition of the MWD’s cash assets and the MWD’s expenditures.
Lastly, McDonald is accused of underreporting his income on his U.S. Individual Income Tax Returns to the IRS for the tax years 2008, 2009, and 2010.
The arrest and charges were announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois, Anthony Mohatt, Special Agent-in-Charge, U.S. Department of Agriculture-Office of the Inspector General, and Stephen Boyd, Special Agent-in-Charge of the Internal Revenue Service-Criminal Investigation.
“As the Board President of the Moecherville Water District, Mr. McDonald had a responsibility to water district customers and the U.S. Department of Agriculture to ensure that customer funds were handled with accountability and integrity.” said Mr. Fardon.
“Mr. McDonald violated the trust of the residents of Moecherville by stealing some of that money for his own personal use.”
“IRS-Criminal Investigation is committed to bring justice to those who commit crimes against our society,” said Mr. Boyd. “We are committed to protecting the citizens of Aurora, Illinois and all American taxpayers by following the money and holding individuals accountable for their actions. As the board president of the water district, Mr. McDonald, has violated the people’s trust by converting Moecherville Water District funds to his personal use.”
Each count of the disposal and conversion of property pledged to the Secretary of Agriculture, acting through the USDA-RD, and the count of making a false statement carries a maximum penalty of 5 years in prison and a $250,000 fine. Each count of filing a false tax return carries a maximum penalty of 3 years in prison and a $100,000 fine, together with the costs of prosecution. If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory United States Sentencing Guidelines.
The government is being represented by Assistant United States Attorney Renai S. Rodney.
The public is reminded that an indictment contains only charges and is not evidence of guilt. The defendant is presumed innocent and is entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.