CHICAGO (WBBM NEWSRADIO) -- Ald. Patrick Daley Thompson (11th) lied to federal agents, trying to conceal that he owed $219,000 to a bank in Bridgeport that the government had shut down for massive fraud, a federal prosecutor said Tuesday, beginning to lay out the income tax fraud case against the first Daley family member to go on trial.
When Thompson got a statement from a lender saying he owed $269,000 for the money he’d borrowed from Washington Federal Bank for Savings, “He got on the phone and expressed shock at the mortgage statement that he got,” Assistant U.S. Attorney Brian Netols said in his opening statement.
“He told them that he only borrowed $110,000,” Netols told jurors. “He told them he wanted to settle the matter quickly.”
Previewing Thompson’s defense, his lawyer Christopher Gair told jurors the Chicago City Council member had forgotten the exact amount he had received from John Gembara, the Washington Federal CEO, who was found dead days before federal regulators closed the bank on Dec. 15, 2017.
“The governments evidence is they think he should have remembered it,” Gair said. “He’s charged with a crime for not having remembered the correct amount.”
Thompson also is charged with income tax fraud for filing five years of federal tax returns in which records show he claimed to have made interest payments that he never paid on the money he got from Gembara’s bank.
Netols told jurors that Thompson should have known that the tax returns his accountants prepared were based on fraudulent documents.
“He never told them he wasn’t making payments to Washington Federal,” the prosecutor said. “And he never told them he didn’t have a mortgage from Washington Federal. Without those two things, those tax returns are false.”
Related
Gair told jurors that Thompson was so busy handling zoning cases for clients of his private law practice while also representing the 11th ward that he didn’t have time to review the tax returns he and his wife filed with the Internal Revenue Service between 2013 and 2017, when they paid $882,000 in taxes.
“When you’re paying $822,000 in taxes, you probably won’t notice there was a deduction of $3,000 a year that you weren’t entitled to,” Gair said. “When he found out, he did what any honest person would do: He amended his tax returns. He pays back that amount that was mistakenly deducted on his tax returns — $15,000.”
Thompson’s lawyer said: “It’s not a crime to be wrong about a number. It’s not a crime to make a mistake. You will not find any proof that Mr. Thompson intended cheat on his taxes.”
The lawyers’ opening statements could be followed Tuesday by testimony from as many as several witnesses.
On Monday, a jury of four men and eight women was chosen to hear the case against Thompson, who was charged in April 2021 with filing false federal income tax returns for the years 2013 through 2017 and lying to federal regulators about how much money he owed Washington Federal.
Among those who could testify Tuesday is Alicia Mandujano, a longtime Washington Federal employee who pleaded guilty last month in connection with the massive fraud that authorities say they uncovered at the bank.
Other potential witnesses include Thompson accountant Robert Hannigan of Bansley & Kiener and other current and former members of the accounting firm.
Mandujano’s plea agreement says that Gembara, who also was the bank’s president and major shareholder had directed her for years to alter the bank’s books to falsely make it appear that Thompson made payments on a loan.
Hannigan gave surprise testimony at a hearing last month about a note he said he found that indicated he first discussed with Thompson amending the tax returns at issue in the trial after federal agents showed up on Thompson’s home in December 2018.
Gembara was found dead in December 2017 in the $1 million Park Ridge home of a bank customer and friend, Marek Matczuk.
Related
The bank was closed by federal regulators the same month.
That’s when investigators began to unravel the fraud they say resulted in the disappearance of nearly $90 million.
The investigation has so far led to criminal charges against 15 people, including Thompson, Mandujano and Matczuk.
According to his indictment, Thompsone received three payments totaling $219,000 from the bank between 2011 and 2014 through a purported loan and other unsecured payments.
Prosecutors say he made only one payment on the loan and didn’t pay any interest.
After the bank was shut down, the Federal Deposit Insurance Corp. tried to collect the money from Thompson, and prosecutors say that’s when he lied about how much he owed.
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.
Gair said Thompson had “simply forgotten” about the second and third payments when he told regulators in February 2018 and March 2018 that he owed only $110,000.
Gair said Thompson also 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.”
(Source: Sun-Times Media Wire & Chicago Sun-Times 2022. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)
Related
