Recreational TIF Fraud

A press release from the U.S. Attorney:

MARINA DEVELOPER SENTENCED TO 60 MONTHS IN FEDERAL PRISON FOR DEFRAUDING THE VILLAGE OF RIVERDALE OF OVER $370,000

CHICAGO – A real estate developer who defrauded the Village of Riverdale of over $370,000 in public funds was sentenced today to 60 months in federal prison.

JOHN THOMAS, 52, of Chicago, owned and controlled Nosmo Kings LLC, which entered into an agreement with Riverdale to develop property along a marina in 2012.

Only a portion of the funds were actually used for legitimate construction work. Thomas misappropriated $372,182 for his own personal use after creating and submitting fraudulent invoices for construction work that was never performed.

Thomas pleaded guilty to one count of wire fraud in May 2014. In addition to the five-year sentence, U.S. District Judge James B. Zagel ordered restitution of $372,182.

“John Thomas is a serial con man,” Assistant U.S. Attorney Sunil Harjani argued in the government’s sentencing memorandum. “Within months after release from probation from another federal conviction, the defendant set out to defraud the Village of Riverdale through the use of the village’s Tax Increment Financing program,” Harjani said.

Nosmo Kings entered into a TIF agreement with Riverdale in February 2012.

Per the agreement, Thomas was required to submit documentation identifying completed construction expenses, including invoices and checks paid to vendors.

Thomas created and submitted false invoices for non-existent companies and for companies that never performed work at the marina.

Zachary Fardon

Zachary Fardon

For instance, one of the invoices requested reimbursement of $25,750 for construction supplies from a company that was actually a currency exchange to which Thomas owed money.

Thomas used other TIF funds to pay personal expenses and the rent on his apartment.

The sentence was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois, and Robert J. Holley, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation. The government is being represented by Assistant United States Attorney Sunil Harjani.


Comments

Recreational TIF Fraud — 4 Comments

  1. Every village that has a TIF should have a section on their home page labeled “TIF” which when clicked on contains pertinent TIF documents including invoices which should be posted indefinitely to deter TIF fraud and abuse.

    Riverdale is a vastly majority black Cook County suburb that along with a few other suburbs is surrounded by surrounded by I-57, I-295, I-80, & I-94.

    The village has had financial problems for years, so board members there should be even more careful of taxpayer expenditures.

    About 1/2 of Riverdale is in a TIF district.

    The Cook County Clerk has a lot of information about TIFs on their website.

    http://www.cookcountyclerk.com/tsd/tifs

  2. The four stone monuments on either side of Rte 14 at the beginning and ending of one of the Crystal Lake TIF districts were listed in a TIF document prior to the expenditure, just wasteful spending to which apparently no one objected.

    The monuments are a daily and ever lasting reminder of the wasted tax dollars that can and does occur in TIFs.

    Crystal Lake no doubt bemoans about not enough money for this or that.

    How about the people who before foreclosure payed property taxes that were diverted to the TIF, taxes which in turn were partially spent the monuments.

    How do stone monuments beautify the TIF area enough to attract more shoppers.

    Just a complete waste of money.

    An indication of what can occur when it’s too easy to get a whole lot of taxpayer money.

Leave a Reply

Your email address will not be published. Required fields are marked *