McHenry County Blog

Before reading this press release from the U.S. Attorney’s Office on a second inner city Democratic Party State Rep. under Federal indictment, reflect upon the 2006 date for which he is charged with using ill-gotten money to pay for campaign expenses.

And that doesn’t count the seemingly pending indictment of ex-U.S. Congressman Jesse Jackson, Jr.

The crime is similar to the one that got Algonquin’s Tyvek Towers developer indicted just before Thanksgiving.

There are many indictments coming down from the Chicago U.S. Attorney’s Office which have crimes that date back that to 2006. Patrick Fitzgerald seems to have left a lot of unfiled cases when he retired this summer.

LASHAWN FORD, ILLINOIS STATE REP., INDICTED ON FEDERAL BANK FRAUD CHARGES RELATED TO REAL ESTATE INVESTMENTS

State Rep. LaShawn Ford (D-Chicago)

CHICAGO — LaShawn K. Ford, an Illinois State Representative who also invested in real estate in Chicago, was indicted today on federal bank fraud and related charges for allegedly

• fraudulently obtaining a $500,000 increase and
• a two-year extension on a line of credit

from the failed ShoreBank and obtaining multiple advances by making false statements about his intended use of the funds.

Ford, 40, of Chicago, who operated Ford Desired Real Estate, Inc., and also invested personally in real estate, purportedly obtained bank funds to rehabilitate specific investment properties in the city, but instead used the funds to pay unrelated expenses, including,

• car loans,
• credit cards,
• other mortgages held at ShoreBank,
• payments to a casino in Hammond, Ind., and
• for his 2006 campaign for Illinois State Representative,

the indictment alleges. The charges do not involve Ford’s position as a state legislator after he was first elected in 2006. Ford represents Illinois’ 8th House District, which includes portions of Chicago’s west side and several western suburbs in Cook County.

Ford was charged with eight counts of bank fraud and nine counts of submitting false information to the bank in a 17-count indictment returned today by a federal grand jury. Chicago-based ShoreBank failed in August 2010 and now operates as Urban Partnership Bank.

Ford will be arraigned on a later date to be determined in U.S. District Court in Chicago.

The indictment was announced by Gary S. Shapiro, Acting United States Attorney for the Northern District of Illinois, and William C. Monroe, Acting Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation.

According to the indictment, Ford had multiple loans with ShoreBank, including a $1 million line of credit, which he was permitted to use solely to purchase and rehabilitate investment properties. On May 22, 2006, he obtained a $500,000 increase — to $1.5 million, and a two-year extension of the credit line, allegedly by submitting false tax return documents that inflated his personal and business income.

On seven different occasions between April 2006 and March 2007, Ford applied for and obtained a total of $373,500 in advances from the credit line, allegedly by making false statements that he intended to use the funds to rehabilitate six different investment properties on the city’s west side.

In each instance, however, Ford allegedly knew that he intended to use the funds, in part, for expenses unrelated to the specific rehabilitation projects.

The indictment seeks forfeiture of approximately $832,000.

Each count of bank fraud and making false statements to a financial institution carries a maximum penalty of 30 years in prison and a $1 million fine, and restitution is mandatory. If convicted, the Court must impose a reasonable sentence under federal sentencing statutes and the advisory United States Sentencing Guidelines.

The government is being represented by Assistant U.S. Attorneys Greg Deis and William Ridgway.

The investigation falls under the umbrella of the Financial Fraud Enforcement Task Force, which includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes. For more information on the task force, visit: www.StopFraud.gov.

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.

A press release from the U.S. Attorney’s Office:

WOODSTOCK MAN PLEADS GUILTY TO FEDERAL
BANK FRAUD AND MONEY LAUNDERING CHARGES

ROCKFORD — A Woodstock, Ill., man pleaded guilty today in Federal Court to charges of bank fraud and money laundering. JON C. SHAIN, 50, admitted that he defrauded Amcore Bank (now known as BMO Harris Bank) in pleading guilty before U.S. District Judge Philip G. Reinhard, who scheduled Shain’s sentencing hearing for 9:30 a.m. on Dec. 2, 2011.

According to court documents, Shain sought a loan from Amcore in the late summer and early fall of 2004 to start a business to coat metal parts.

In October 2004, Shain created Coating Technologies, Inc., and served as its only officer and director. In November 2004, Amcore agreed to loan Coating Technologies $884,000 to purchase a building and equipment.

In June, July and August of 2005, loan proceeds were paid to Coating Technologies by Amcore based upon settlement sheets provided by Shain, with accompanying invoices and documents in support of the purchase of equipment.

However, as stated in a written plea agreement, Shain submitted false and fraudulent invoices regarding the purchase and price of equipment and related services, among which were invoices from Industrial Equipment Supply Corp., and Qualified Industrial Services.

According to the plea agreement, Shain was also doing business as Industrial Equipment Supply Corporation, but used a false address and concealed his ownership to avoid any further inquiries by Amcore.

In addition, Qualified Industrial Services was a sham device used by Shain to defraud Amcore, using the name and address deceptively similar to an actual business Shain had transacted business with in South Carolina.

The plea agreement also provides that in February 2006, Coating Technologies and an unrelated business combined to do business as Barron Finishing Technologies, Inc., created and owned by a partnership that included Shain and in which he served as President.

Barron Finishing obtained Amcore loans of more than $2 million to purchase real estate and equipment.

The plea agreement states that Shain submitted false and fraudulent invoices and documents to Amcore to draw proceeds from Amcore loans to the partnership and Barron Finishing, drawing hundreds of thousands of dollars more than the actual cost of equipment, and using the loans to acquire real estate that was not permitted by the terms of the loan.

Shain admitted that after depositing part of the proceeds from the bank fraud scheme into a Qualified Industrial Services Chase Bank account, he issued a check to Industrial Equipment, which he later used in part to purchase property on Hydraulic Road, in Rockford, in the name of Industrial Equipment.

The plea agreement states that Shain separately withdrew $68,000 and $90,000 from Industrial Equipment, knowing it was money derived from loans he fraudulently obtained from Amcore, and used the money to purchase property on Chatsworth Drive and Stratford Avenue, located in Rockford, both in the name of Rock River Reality, LLC, an entity Shane alone controlled.

In the plea agreement, Shain acknowledged that the real and personal property located on Hydraulic Road, Chatsworth Drive, and Stratford Avenue, all in Rockford, constitute proceeds of the violations and that the property is subject to forfeiture.

Bank fraud carries a maximum penalty of 30 years in prison and a $1 million fine; and each count of money laundering carries a maximum penalty of up to 10 years in prison and a fine of up to $250,000. The Court may also impose a fine totaling twice the loss to any victim or twice the gain to the defendant, whichever is greater. The actual sentence will be determined by the United States District Court, guided by the advisory United States Sentencing Guidelines.

The guilty plea was announced by Patrick J. Fitzgerald, United States Attorney for the Northern District of Illinois, and Robert D. Grant, Special Agent-in-Charge of the Chicago Office of Federal Bureau of Investigation.
The government was represented by Assistant U.S. Attorney Michael D. Love.

U.S. Attorney Patrick Fitzgerald

The U.S. Attorney’s Office announces the sentencing of a crooked banker:

FORMER ELMWOOD PARK BANK VICE PRESIDENT SENTENCED TO 63 MONTHS IN FEDERAL PRISON FOR $5.1 MILLION FRAUD SCHEME

CHICAGO — A former suburban bank vice president was sentenced today to 63 months in federal prison following his fraud conviction for changing the terms of at least 100 loans for at least 50 customers and causing the bank to lose at least $5.1 million.

Jeffrey Gonsiewski, formerly vice president of the loan department at First Security Trust and Savings Bank in Elmwood Park, altered loan documents to make it appear that customers’ payments were current when he knew they were actually overdue, which prevented the bank from taking timely action to collect delinquent loans and protect its assets.

Gonsiewski, 56, of Wood Dale, was sentenced by U.S. District Judge Elaine Bucklo, who ordered him to begin serving the sentence on Jan. 20, 2011. Judge Bucklo also ordered mandatory restitution of $5.1 million.

Gonsiewski pleaded guilty in August to one count of bank fraud, admitting that, between September 2004 and February 2009, he caused the bank to issue unsecured and under-secured loans by falsely representing that the loans were secured by adequate collateral even though he knew that the collateral was either nonexistent or insufficient to secure the loans.

He also

• changed the terms and conditions of loans to conceal that payments were overdue;
• fraudulently caused the bank to cover checks totaling more than $2 million written on overdrawn accounts; and
• created false loan documents, including forging signatures.

The sentencing was announced by Patrick J. Fitzgerald, United States Attorney for the Northern District of Illinois, and Robert D. Grant, Special Agent-in-Charge of the Chicago Office of Federal Bureau of Investigation. The government was represented by Assistant U.S. Attorney Jacqueline Stern.

A friend noticed an important story that popped up on the Northwest Herald web site this afternoon.

From what I can gather, “significant” money has been illegally transferred from grade school district bank accounts to points unknown.

The Daily Herald reports,

“Because bank deposits are guaranteed by the Federal Deposit Insurance Corporation, the FBI is also working on the case.“

Guess I’ll have to get on the press release list for the elementary school district.

Ever wonder why big banks have problems?

The press release below from U.S. Attorney Patrick Fitzgerald’s office outlines one reason for troubles at Fifth Third Bank.

It uses the word “swindle.”

Bankrupt Computer World Solution’s Chief Operating Officer Kevin Gore has been arrested in a $17 million fraud scheme. (When I Googled the company, look what came up.)

The founder of the company, Noel Yuan, has already pleaded guilty to two counts of bank fraud and awaits sentencing.

CHICAGO – A former executive of a defunct consumer electronics business who allegedly engaged in a $17 million bank fraud scheme and later became a fugitive has been returned to Chicago to face federal charges following his arrest earlier this year in the Philippines, federal law enforcement officials announced today.

The defendant, Kevin M. Gore, who was chief operating officer of Computer World Solution, Inc., in suburban Wheeling, is scheduled to be arraigned Wednesday in U.S. District Court. Together with co-defendant Noel Yuan, the company’s founder and president, Gore allegedly swindled Fifth Third bank by fraudulently obtaining funds through a revolving line of credit.

Computer World Solution, which imported and distributed wholesale consumer electronics such as televisions and computer monitors, went into bankruptcy in November 2007.

The bank’s losses on the business’s line of credit were discovered to be in excess of $17 million. Shortly before the bankruptcy, Gore left the United States and was traveling throughout Asia until he was arrested in late February.

Gore, 40, formerly of Chicago, was initially charged in a criminal complaint in 2008 and was indicted in March 2009 on three counts of bank fraud, announced Patrick J. Fitzgerald, United States Attorney for the Northern District of Illinois, and Robert D. Grant, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation.

The indictment also seeks forfeiture of $17 million.

Gore, who is being held without bond, appeared in court briefly yesterday and his arraignment was continued until 9:20 a.m. tomorrow before U.S. District Judge Joan Gottschall.

Yuan, 53, formerly of Northbrook, pleaded guilty to two counts of bank fraud in December 2008 and remains in custody while awaiting sentencing.

According to the indictment, Gore, together with Yuan, executed the fraud scheme between March 2005 and September 2007.

Computer World Solution entered into a financing agreement with Fifth Third Bank under which the bank would issue a revolving line of credit, which was secured by the company’s accounts receivable. By January 2007, the maximum borrowing limit was increased to $20 million.

Pursuant to the agreement, the company justified advances on the line of credit by submitting “borrowing base certificates” to the bank.

Gore allegedly prepared certificates that falsely inflated the amount of the company’s accounts receivable, and Yuan signed the certificates and caused them to be submitted to the bank to enable the company to obtain more funds than would otherwise have been permitted.

Gore and Yuan allegedly submitted more than 30 such false certificates to the bank. Much of the money they obtained was sent to Asia, purportedly to purchase electronic equipment to be sold in the United States, according to court documents. The defendants then used some of the company’s profits from the sale of the merchandise to make payments on the line of credit.

The indictment alleges that Gore submitted false certificates to the bank claiming an account receivable of more than $2.1 million, which did not exist, and accounts receivable that were due from various other companies were falsely overstated.

During a bank audit of the company in July 2007, Gore allegedly gave auditors documents that purported to be statements of a Computer World Solution account at a different bank for the months February, March and April 2007.

In fact, the documents were false and forged because they showed wire transfer credits to the account that never occurred and overstated the amount of the company’s business income by more than $40 million, the charges allege.

The government is being represented by Assistant U.S. Attorney Clifford Histed.

If convicted, each count of bank fraud carries a maximum penalty of 30 years in prison and a maximum fine of $1 million, or the Court may impose a fine totaling twice the loss to the victim or twice the gain to the defendant, whichever is greater. The Court, however, would determine the appropriate sentence to be imposed under the advisory United States Sentencing Guidelines.

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.

Friday afternoon, the U.S. Attorney’s Office has released the following press release:

SECRET SERVICE ARRESTS THREE DEFENDANTS IN ALLEGED

HOME EQUITY LOAN MORTGAGE FRAUD SCHEME

CHICAGO – Three defendants were arrested today on federal bank fraud charges as part of an ongoing investigation into fraudulently obtaining multiple home equity loans. The defendants and others allegedly had already obtained more than $1.7 million and were in the process of obtaining another $1.8 million from multiple banks in the Chicago area, federal law enforcement officials said.

U.S. Secret Service agents today arrested the defendants, who purport to be Lianyu Li, Jin Hua Dong and Myung Pak, but who allegedly use multiple aliases with different addresses and dates of birth. Li was arrested outside a bank in Wood Dale and Dong and Pak were arrested at a residence in Chicago. All three were scheduled to appear at 3:45 p.m. today before U.S. Magistrate Judge Nan Nolan in U.S. District Court. The charges were announced by Patrick J. Fitzgerald, United States Attorney for the Northern District of Illinois, and David W. Fisher, Acting Special Agent-in-Charge of the Chicago Office of the United States Secret Service.

“The complaint charges an extensive and ever more popular scheme that successfully targeted numerous financial institutions and proved to be, at least temporarily, extremely lucrative for these defendants. I commend the Secret Service for its quick action in this investigation,” Mr. Fitzgerald said.

According to the complaint affidavit, the defendants purchased properties between 5 months and 2 weeks ago and then proceeded to simultaneously apply for multiple home equity loans, often within days of the respective purchases. The loans allegedly exceeded any equity in the properties and, in some cases, the defendants submitted false loan applications, fraudulently inflating any existing equity in the homes.

Specifically, the complaint alleges that in January, Li applied for and obtained four loans totaling more than $850,000 from four different banks secured by 893 Asbury Lane in Schaumburg, and then in late April and early May, Li applied for three loans from three different banks totaling more than $1 million secured by 3421 Sandstone Ct., Lake in the Hills. During this same time period, Dong applied for two loans from two different banks within 24 hours of each other totaling $784,900, secured by 4066 South Lake Park Ave., Chicago. Finally, in March and April, Pak applied for and obtained four home equity loans totaling $889,500 from four different banks secured by 1713 South Ashland Ave., Park Ridge.

According to the affidavit, Secret Service agents surveilled Li and Dong going from bank to bank applying for, and signing closing documents on, numerous home equity loans.

Also, Li allegedly negotiated home equity loan checks from the scheme at the Horseshoe Casino in Hammond, Ind., and then received checks totaling $262,00 from the casino made payable to himself.

The government is being represented by Assistant U.S. Attorney Edward Siskel.

Bank fraud carries a maximum penalty of 30 years in prison and a $1 million fine. The Court, however, would determine the appropriate sentence to be imposed under the advisory United States Sentencing Guidelines.

The public is reminded that a complaint contains only charges and is not evidence of guilt. The defendants are presumed innocent and is entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.

Friday afternoon, the U.S. Attorney’s Office has released the following press release:

SECRET SERVICE ARRESTS THREE DEFENDANTS IN ALLEGED

HOME EQUITY LOAN MORTGAGE FRAUD SCHEME

CHICAGO – Three defendants were arrested today on federal bank fraud charges as part of an ongoing investigation into fraudulently obtaining multiple home equity loans. The defendants and others allegedly had already obtained more than $1.7 million and were in the process of obtaining another $1.8 million from multiple banks in the Chicago area, federal law enforcement officials said.

U.S. Secret Service agents today arrested the defendants, who purport to be Lianyu Li, Jin Hua Dong and Myung Pak, but who allegedly use multiple aliases with different addresses and dates of birth. Li was arrested outside a bank in Wood Dale and Dong and Pak were arrested at a residence in Chicago. All three were scheduled to appear at 3:45 p.m. today before U.S. Magistrate Judge Nan Nolan in U.S. District Court. The charges were announced by Patrick J. Fitzgerald, United States Attorney for the Northern District of Illinois, and David W. Fisher, Acting Special Agent-in-Charge of the Chicago Office of the United States Secret Service.

“The complaint charges an extensive and ever more popular scheme that successfully targeted numerous financial institutions and proved to be, at least temporarily, extremely lucrative for these defendants. I commend the Secret Service for its quick action in this investigation,” Mr. Fitzgerald said.

According to the complaint affidavit, the defendants purchased properties between 5 months and 2 weeks ago and then proceeded to simultaneously apply for multiple home equity loans, often within days of the respective purchases. The loans allegedly exceeded any equity in the properties and, in some cases, the defendants submitted false loan applications, fraudulently inflating any existing equity in the homes.

Specifically, the complaint alleges that in January, Li applied for and obtained four loans totaling more than $850,000 from four different banks secured by 893 Asbury Lane in Schaumburg, and then in late April and early May, Li applied for three loans from three different banks totaling more than $1 million secured by 3421 Sandstone Ct., Lake in the Hills. During this same time period, Dong applied for two loans from two different banks within 24 hours of each other totaling $784,900, secured by 4066 South Lake Park Ave., Chicago. Finally, in March and April, Pak applied for and obtained four home equity loans totaling $889,500 from four different banks secured by 1713 South Ashland Ave., Park Ridge.

According to the affidavit, Secret Service agents surveilled Li and Dong going from bank to bank applying for, and signing closing documents on, numerous home equity loans.

Also, Li allegedly negotiated home equity loan checks from the scheme at the Horseshoe Casino in Hammond, Ind., and then received checks totaling $262,00 from the casino made payable to himself.

The government is being represented by Assistant U.S. Attorney Edward Siskel.

Bank fraud carries a maximum penalty of 30 years in prison and a $1 million fine. The Court, however, would determine the appropriate sentence to be imposed under the advisory United States Sentencing Guidelines.

The public is reminded that a complaint contains only charges and is not evidence of guilt. The defendants are presumed innocent and is entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.