Real estate agent, former cop charged in bank fraud scheme
Chicago man sought to stem losses from theater deal
(Tribune illustration)
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A Northwest Side real estate agent and former banker has been arrested on fraud charges in an alleged scheme to hoodwink his own bank into illegally lending $650,000 to a Chicago police lieutenant for the purchase of an apartment building, then keeping a large chunk of the cash for himself.
Robert Michael, 62, an owner of Michael Realty and former CEO of the now-defunct Citizens Bank and Trust, was indicted on one count each of bank fraud, making false statements to a bank, and money laundering. Police Lt. Erroll Davis, 52, was charged with one count of filing a false federal income tax return.
Also involved in the alleged scheme — though not charged — was Regina Evans, the former police chief of Country Club Hills who has pleaded guilty to stealing hundreds of thousands of dollars in state grant money and spending it on friends, family and debt payments on a theater she owned.
Michael, a former Chicago police sergeant, pleaded not guilty Friday before U.S. Magistrate Judge Daniel Martin and was released on a personal recognizance bond. He told court officials he has more than 20 guns at his Northwest Side home, including about a dozen shotguns. As a condition of his release, Michael was ordered to turn over the weapons to his brother, George, of Lake Bluff.
Davis, a 27-year veteran of the force who spent years as a high-ranking member of the police marine unit, will be arraigned at a later date. He resigned from the department Friday, police spokesman Adam Collins said.
According to the indictment, Evans, who was identified only as "Individual A," borrowed more than $2 million from Citizens Bank in 2008 to buy the ornate, 1920s New Regal Theater, a parking lot and an apartment building in the South Chicago neighborhood. The indictment did not name Evans but made it clear she was "Individual A" by identifying her as the owner of the theater.
By that November, Evans owed more nearly $300,000 in back mortgage payments on the theater as well as on a lease for a nightclub in south suburban Dolton that she had obtained through Michael Realty, the charges alleged. To generate cash to allow her to make the payments, the three concocted a phony real estate transaction in which Davis purported to buy the apartment building in the 1600 block of East 79th Street for $900,000.
Using bogus apartment leases and other false statements, Michael got his bank to approve the $650,000 mortgage to Davis, the charges alleged. When the title company cut the check for the sale, Michael Realty directly received $200,000 in proceeds, according to the indictment.
Michael and his brother are well-known on the Northwest Side after building a small empire of mostly commercial real estate holdings through their bank and realty companies. But they also caught the attention of federal regulators who sued the brothers for allegedly making deals without telling the bank's board of directors and hiding personal interests they had in many of the properties.
After a federal administrative law judge recommended in 2010 that the brothers be kicked out of banking indefinitely, Citizens Bank was taken over by the feds. The brothers have since filed for bankruptcy, as has Michael Realty, records show.
Their real estate office in the 6300 block of North Milwaukee Avenue was also the scene of a bizarre FBI raid last year when agents arrested former Chicago cop Steve Mandell as he was allegedly hatching a plan to kidnap a local businessman, extort him for his real estate holdings, then murder and dismember him. The realty office and the location where the slaying was to take place had been rigged with FBI cameras and wires.
Federal prosecutors this year said Mandell tried to solicit the execution of a key witness in the case — whom Mandell identified in open court as George Michael — shortly after he was removed from solitary confinement at a Loop federal jail where he is awaiting trial.
Evans, meanwhile, is in a downstate jail awaiting sentencing for spending hundreds of thousands of dollars of a $1.2 million state job-training grant on personal expenses. Evans' nonprofit, We Are Our Brothers Keeper, won the grant in 2009 on the promise it would train minorities and women to become electricians or bricklayers. The workers were to be trained at the New Regal Theater.
She also pleaded guilty in August to coercing a witness in the fraud investigation to lie to authorities about being paid to teach "soft skills" courses. The witness in fact had funneled the money back to Evans.
jmeisner@tribune.com
Robert Michael, 62, an owner of Michael Realty and former CEO of the now-defunct Citizens Bank and Trust, was indicted on one count each of bank fraud, making false statements to a bank, and money laundering. Police Lt. Erroll Davis, 52, was charged with one count of filing a false federal income tax return.
Also involved in the alleged scheme — though not charged — was Regina Evans, the former police chief of Country Club Hills who has pleaded guilty to stealing hundreds of thousands of dollars in state grant money and spending it on friends, family and debt payments on a theater she owned.
Michael, a former Chicago police sergeant, pleaded not guilty Friday before U.S. Magistrate Judge Daniel Martin and was released on a personal recognizance bond. He told court officials he has more than 20 guns at his Northwest Side home, including about a dozen shotguns. As a condition of his release, Michael was ordered to turn over the weapons to his brother, George, of Lake Bluff.
Davis, a 27-year veteran of the force who spent years as a high-ranking member of the police marine unit, will be arraigned at a later date. He resigned from the department Friday, police spokesman Adam Collins said.
According to the indictment, Evans, who was identified only as "Individual A," borrowed more than $2 million from Citizens Bank in 2008 to buy the ornate, 1920s New Regal Theater, a parking lot and an apartment building in the South Chicago neighborhood. The indictment did not name Evans but made it clear she was "Individual A" by identifying her as the owner of the theater.
By that November, Evans owed more nearly $300,000 in back mortgage payments on the theater as well as on a lease for a nightclub in south suburban Dolton that she had obtained through Michael Realty, the charges alleged. To generate cash to allow her to make the payments, the three concocted a phony real estate transaction in which Davis purported to buy the apartment building in the 1600 block of East 79th Street for $900,000.
Using bogus apartment leases and other false statements, Michael got his bank to approve the $650,000 mortgage to Davis, the charges alleged. When the title company cut the check for the sale, Michael Realty directly received $200,000 in proceeds, according to the indictment.
Michael and his brother are well-known on the Northwest Side after building a small empire of mostly commercial real estate holdings through their bank and realty companies. But they also caught the attention of federal regulators who sued the brothers for allegedly making deals without telling the bank's board of directors and hiding personal interests they had in many of the properties.
After a federal administrative law judge recommended in 2010 that the brothers be kicked out of banking indefinitely, Citizens Bank was taken over by the feds. The brothers have since filed for bankruptcy, as has Michael Realty, records show.
Their real estate office in the 6300 block of North Milwaukee Avenue was also the scene of a bizarre FBI raid last year when agents arrested former Chicago cop Steve Mandell as he was allegedly hatching a plan to kidnap a local businessman, extort him for his real estate holdings, then murder and dismember him. The realty office and the location where the slaying was to take place had been rigged with FBI cameras and wires.
Federal prosecutors this year said Mandell tried to solicit the execution of a key witness in the case — whom Mandell identified in open court as George Michael — shortly after he was removed from solitary confinement at a Loop federal jail where he is awaiting trial.
Evans, meanwhile, is in a downstate jail awaiting sentencing for spending hundreds of thousands of dollars of a $1.2 million state job-training grant on personal expenses. Evans' nonprofit, We Are Our Brothers Keeper, won the grant in 2009 on the promise it would train minorities and women to become electricians or bricklayers. The workers were to be trained at the New Regal Theater.
She also pleaded guilty in August to coercing a witness in the fraud investigation to lie to authorities about being paid to teach "soft skills" courses. The witness in fact had funneled the money back to Evans.
jmeisner@tribune.com
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