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Robert Michael, Bank Fraud, Illinois 2008
CHICAGO — A Chicago realty business owner and a former chief executive of a failed Chicago bank was arrested today on federal bank fraud charges involving an alleged scheme to illegally provide a $650,000 mortgage for the purchase of a south side apartment building.
Robert Michael, 62, of Chicago, an owner of Michael Realty and a former shareholder, chief executive officer, and senior lender at the failed Citizens Bank, was arrested today by agents with the Internal Revenue Service Criminal Investigation Division. He was charged with one count each of bank fraud, making false statements to a bank, and money laundering in an indictment that was returned by a federal grand jury on November 14 and unsealed today following his arrest.
The indictment also seeks forfeiture of at least $634,000 from Michael. Michael pleaded not guilty before U.S. Magistrate Judge Daniel Martin and was released on a $10,000 personal recognizance bond.
The alleged scheme involved Michael, who also caused Citizens Bank to loan $2.1 million to purchase the theater property, excluding the apartment building from the collateral securing the loan to evade the bank’s legal lending limits.
According to the indictment, between March and November 2008, Michael schemed with Individual A, the owner and president of The Prime Time Group, Inc., and the Regal Theater LLC, to fraudulently obtain approximately $634,000 from Citizens Bank, knowing that the mortgage loan to fund Davis’ purchase of a 12-unit apartment building at 1665 East 79th St., in Chicago, was the result of false statements to the bank.
Michael and Individual A allegedly prepared a fraudulent real estate contract for the purchase of the apartment building, purporting that the purchase price was $900,000 and that Davis had paid $90,000 in earnest money. Michael, Individual A, and Davis allegedly made other false statements, including creating false apartment leases, to induce Citizens Bank to issue a mortgage to Davis.
Ultimately, Michael approved a wire transfer of $639,000 to fund the apartment transaction, and caused the title company to issue a check for $634,046, representing proceeds of the transaction.
Also indicted but not arrested was Erroll Davis, 52, of Chicago, a Chicago police lieutenant who was charged with one count of filing a false federal income tax return. Davis will be arraigned at a later date in Federal Court.
The arrests and charges were announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois, and James C. Lee, Special Agent-in-Charge of the Internal Revenue Service Criminal Investigation Division.
Defendant: Robert Michael
Criminal Charges: Bank fraud, making false statements to a bank, and money laundering
City and State: Chicago, Illinois
Exact Date: March to November 2008
Sentence or Outcome: Charged, released on $10,000 personal recognizance bond
Dollar Amounts: $2.1 million, $650,000, $634,000, $634,046
Key Facts
- State: Illinois
- Category: White Collar Crime|Financial Crimes
- Source: DOJ Press Release â†â€â€
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