CHICAGO (WBBM NEWSRADIO) -- The tax trial of Ald. Patrick Daley Thompson (11th Ward) is set to begin with jury selection Monday morning at the Dirksen Federal Courthouse.
U.S. District Judge Franklin Valderrama agreed during a hearing Friday evening to dismiss nine potential jurors in the case. He did so largely because of how they responded to a written question about Thompson’s family and his position as alderperson.
The question asked whether the potential jurors would treat Thompson unfairly given his elected office or his relation to former Mayors Richard J. Daley and Richard M. Daley, his grandfather and uncle.
Opening statements in the case could begin as soon as Monday afternoon. The trial is set to take place on the 25th floor of the Dirksen building in Chicago’s Loop. Thompson is the first member of his family’s political dynasty to go on trial, and he is the first sitting alderman to face trial in more than two decades.
Because of COVID-19 restrictions at the courthouse, the trial is only publicly viewable from the building’s ceremonial courtroom, where video and audio of the trial will be streamed.
Thompson was charged in April 2021 with filing false federal income tax returns for the years 2013 through 2017. He is also charged with lying to federal regulators in early 2018 about the amount of money he owed Washington Federal Bank for Savings in Bridgeport.
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The bank’s president, John F. Gembara, was found dead in December 2017 in the $1 million Park Ridge home of his bank customer and friend, Marek Matczuk. The bank was shut down by federal regulators the same month. That’s when investigators began unraveling what’s been labeled a “massive fraud scheme” resulting in the disappearance of nearly $90 million.
That investigation has led to federal criminal charges against 15 people, including Thompson.
Thompson’s indictment said he received three payments totaling $219,000 from the bank between 2011 and 2014 through a purported loan and other unsecured payments. The feds said he made only one payment on the loan but failed to pay any interest. Then, after the bank was shut down, the Federal Deposit Insurance Corp. tried to collect the money from Thompson, and he allegedly lied about how much he owed.
Defense attorney Chris Gair, a former federal prosecutor, has said that Thompson didn’t pay interest on the Washington Federal loan because he expected to refinance the debt with the mortgages on his home and rental property and repeatedly tried to get Gembara to approve it.
The bank gave Thompson $110,000 in November 2011, $20,000 in March 2013 and $89,000 in January 2014. But Gair said Thompson had “simply forgotten” about the second and third payment when he told regulators in February and March 2018 he only owed $110,000.
Thompson joined the Chicago City Council in 2015.
Meanwhile, Gair said Thompson didn’t realize his accountants had used interest forms wrongly sent to him by Washington Federal to claim a mortgage-interest deduction on his income tax returns year after year. Gair has even gone so far as to write that, “Mr. Thompson’s lack of organization and lack of attention to the details of his personal financial affairs are central to his defense.”
Thompson’s secretary will testify he “is one of the, if not the, most disorganized lawyers she has ever worked with,” Gair wrote. “His office contains disorganized piles of paperwork all over his desk, the chairs and even the floor.”
The alderperson settled his Washington Federal debt in late 2018. The FDIC had handed Thompson’s debt over to Planet Home Lending, which agreed to let Thompson pay off the debt for the principal balance of $219,000 — though not the unpaid interest.
When Thompson told his accountant that the deal didn’t require him to pay the interest on the loan, Gair said the accountant told him he had improperly claimed interest deductions on his tax returns. Thompson filed amended tax returns in April 2019, and Gair said he paid the $15,000 he had improperly deducted.
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(Source: Sun-Times Media Wire & Chicago Sun-Times 2022. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)