Inside these posts: Fraud

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Suburban Chicago man pleads guilty to $18M fraud

A suburban Chicago businessman has pleaded guilty to stealing $18 million of public money set aside for minority businesses.

Illinois Attorney General Lisa Madigan said Tuesday that 58-year-old Ronald Blum of New Lenox pleaded guilty to two counts of minority business fraud. Blum owns the Markham-based Castle Construction Corp. Get the full story »

Downers Grove swindler gets 16 years in Ponzi scheme

David Hernandez’s lifetime of lying has caught up to him, said a federal judge who sentenced the Downers Grove man Friday to more than 16 years in prison for swindling more than 250 people out of $6.4 million.

Hernandez, best known for starting an Internet-based sports talk show with radio personality Mike North, apologized to his fraud victims in a rambling, tearful statement to U.S. District Judge Robert Gettleman. Hernandez pleaded for sympathy because he claims to suffer from mental illness brought on by childhood abuse. Get the full story »

Conrad Black to be resentenced in June for fraud

Conrad Black, the wealthy Canadian native who was chairman of a Chicago-based newspaper empire, will be resentenced in June on two counts that survived an appellate court’s review of his 2007 fraud conviction, a federal judge decided today.

‘Robin Hood’ banker gets 63 months for fraud

First Security Trust & Savings Bank loan officer Jeffrey Gonsiewski, pleaded guilty in August to one count of federal bank fraud, was sentenced to 63 months in prison by U.S. District Judge Elaine Bucklo on Tuesday.

The U.S. Government last summer had accused the 56-year-old high school graduate of changing loan terms or arranging loans to be made in a scheme that ultimately caused the Elmwood Park-based lender, part of the Wirtz family empire, to lose more than $5.5 million. Get the full story »

Three men charged in Islamic-based Ponzi scheme

Three owners of a Chicago-based real estate development firm have been charged with fraud for allegedly cheating investors out of $43 million while claiming to be compliant with Islamic law.

A federal grand jury returned a 14-count indictment against the owners of Sunrise Equities on Tuesday, U.S. Attorney Patrick Fitzgerald said in a Wednesday statement. Federal officials said Salman Ibrahim, the majority owner and president of the now-bankrupt firm, and Mohammad Akbar Zahid, senior vice president of investor relations and a 10-percent owner, told clients that their investments would comply with Shariah law.

Islamic law prohibits interest, so Ibrahim and Zahid told investors they would receive monthly pay-outs of profits from real estate development. According to Fitzgerald’s office, the men promised annual returns of between 15 and 30 percent. Get the full story »

AmEx to buy Itasca anti-fraud firm for $150M

American Express said Thursday it was paying $150 million to acquire Accertify Inc., an Itasca-based firm that specializes in fighting online fraud.

Founded in 2007 by Jeff Liesendahl and other veterans of Orbitz, Accertify provides airlines and other online merchants with an extra layer of security to help them combat identity theft and credit-card fraud.

The firm’s customers include Delta, JetBlue and Southwest Airlines and Sony, 1-800 Flowers, Barnes & Noble, Urban Outfitters, Electronic Arts, StubHub,, Autotrader and Zipcar. Get the full story »

Countrywide’s Mozilo settles suit for $67.5 million

Angelo R. Mozilo, who presided over the spectacular rise and devastating fall of Countrywide Financial Corp., struck a deal Friday to avoid going to trial next week on accusations of investor fraud and insider trading. Mozilo agree to pay $22.5 million in fines to the SEC and to turn over $45 million in ill-gotten gains to former shareholders who have sued him.

Whistleblower suit says Allstate cheated on claims

From The New Orleans Times-Picayune | A whistleblower suit alleging that Allstate Insurance Co. defrauded taxpayers by overbilling the National Flood Insurance Program has been unsealed in federal court in New Orleans.

State fines unlicensed firms selling health insurance

The Illinois Department of Insurance said it has taken steps to prohibit several companies from “marketing and selling non-comprehensive health insurance” in the state without a license. Get the full story »

Boston Blackie’s closing some locations

Chicago-area restaurant chain Boston Blackie’s is closing some of its locations almost a year after the company filed for Chapter 11 bankruptcy protection.

An employee who answered the phone at the chain’s River East location said it was closing effective immediately. He declined to comment further. The Boston Blackie’s next to the Doubletree Hotel in Skokie also closed on Sunday, according to a hotel employee. Phone numbers listed on the company’s Web site for locations in Lincoln Park, Glencoe and Naperville were disconnected or out of service on Tuesday afternoon. Get the full story »

Govt. wants bond revoked for fraud mastermind

The government is asking a federal court judge to revoke the bond of accused investor David Hernandez, saying he attempted to delay his sentencing by fabricating a letter from a doctor that said he was starting treatment for cancer.

Hernandez pleaded guilty in January to a Ponzi-style scheme that bilked more than 200 people of their savings. The swindle allegedly garnered $6.3 million for Hernandez, which he used to bankroll a now-defunct Chicago sports-talk radio station and other personal purchases.

Federal prosecutors say Hernandez who lives in Downers Grove and is free on bond until a sentencing that could mean up to 14 years in prison — should be locked up because he is a flight risk. Get the full story »

Skokie police: ATM scams pick 7 accounts

From | Skokie police are investigating sophisticated “skimming” schemes that may have led to ATM fraud in the area. According to police reports this week, five women and two men, all Skokie residents, have fallen prey to ATM fraud over the past few days and have lost a combined $9,900 due to the fraudulent withdrawals.

Will Eisner be Tribune Co.’s next chairman?

Former Disney CEO Michael Eisner on July 7, 2010. (AP Photo/Nati Harnik)

By Dawn C. Chmielewski, Michael Oneal and Sallie Hofmeister

Former Walt Disney Co. Chief Executive Michael Eisner is in discussions that could lead to his return to the media spotlight — as chairman of the now-bankrupt Tribune Co.

The Chicago-based media company’s largest creditors are having preliminary conversations with prospective candidates who could operate Tribune Co. once it emerges from bankruptcy, according to several people with knowledge of the situation.

Eisner, who has been dabbling in the digital world as an investor since stepping down from Disney in 2005, is among the candidates under consideration to replace Chicago real estate magnate Sam Zell as chairman of the reorganized company. Get the full story »

SEC charges 2 with insider trading on BHP-Potash

Federal regulators say two Spanish investors made illegal profits of $1.1 million by trading on secret information about BHP Billiton PLC’s bid to acquire Potash Corp. The Securities and Exchange Commission said Juan Jose Fernandez Garcia and Luis Martin Caro Sanchez bought investments that became valuable after the mining company offered $38.5 billion to take over fertilizer maker Potash. Garcia heads the research arm of a bank that was advising BHP on the deal.

New Jersey settles SEC securities fraud case

The state of New Jersey has settled federal civil fraud charges of failing to inform bond investors that it had not met obligations to its largest pension plans, federal regulators said Wednesday.

The SEC declined comment on whether a similar investigation is under way in Illinois. The pension system here is the most underfunded in the nation, according to the Pew Center for the States, with only about half the money needed to cover more than $60 billion in liabilities. Get the full story »