Riverdale Marina Real Estate Developer Arrested on Federal Charges

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Education & Training with (retired) TN LIC# 290452

Riverdale Marina Redeveloper Arrested on Federal Charges for Allegedly Defrauding the Village of $370,000 in Public Funds

U.S. Attorney’s Office April 18, 2014
  • Northern District of Illinois (312) 353-5300

CHICAGO—A Chicago real estate developer was arrested today on federal charges alleging that he defrauded the south suburban Village of Riverdale of public funds provided for the redevelopment of the now closed-Riverdale Marina. The defendant, John Thomas, allegedly fraudulently obtained approximately $370,000 for himself from $900,000 in Tax Increment Financing (TIF) payments in 2012 and used the public funds to repay personal loans and debts, legal fees, rent, and other personal expenses.

Thomas, 51, of Chicago, was charged with three counts of wire fraud in a federal grand jury indictment that was returned Wednesday and unsealed today after his arrest. He is expected to be arraigned later today in U.S. District Court.

Thomas owned and controlled Nosmo Kings LLC, which had offices at 215 West Ontario St. in Chicago and at the Riverdale Marina at 13100 South Halsted St. in Riverdale, which consisted of boat docks and a restaurant on 11 acres along the Little Calumet River.

Between February and April 2012, Riverdale paid Thomas’s company $900,000 in TIF funds for three phases of construction and reimbursement based on false supporting documents. Thomas used a portion of the money for legitimate renovations costs while fraudulently using approximately $370,000 for his personal benefit. The indictment seeks forfeiture of at least $370,000.

According to the indictment, Nosmo Kings entered into a TIF agreement with Riverdale in February 2012. Riverdale’s TIF program allowed taxpayer funds to be used to redevelop certain property in the village. Under the agreement, Riverdale agreed to reimburse Nosmo Kings’ expenses up to $1.2 million as long as the total renovation costs equaled or exceeded approximately $5.25 million. The TIF funds were to be disbursed in four phases, each capped at $300,000, after Nosmo Kings paid for and completed each phase of construction. To obtain TIF funds, Thomas was required to submit certain documents identifying completed construction expenses, including invoices from and checks paid to vendors.

In early 2012, Thomas allegedly created and submitted fake invoices for non-existent companies and for companies that never performed work at the marina in order to fraudulently obtain reimbursement from the village. The indictment alleges he submitted numerous false documents supporting reimbursement for expenses that he had not incurred. These included $132,000 and $8,815 in payments to contractors for construction work; $22,994 for an insurance policy that was later cancelled for non-payment; and $56,000 and $67,000 for construction supplies using the same supporting invoices and receipts to double-bill the village.

The indictment alleges that Thomas claimed $25,750 for construction supplies from a company that was actually a currency exchange he owed money, and he submitted other fraudulent documents to obtain payment of tens of thousands of dollars to law firms and an individual attorney for personal legal fees for himself and one of his employees. Thomas used other TIF funds to pay his apartment rent, the charges allege.

Each count of wire fraud carries a maximum penalty of 20 years in prison and a $250,000 fine, and restitution is mandatory. If convicted, the court must impose a reasonable sentence under federal statutes and the advisory United States Sentencing Guidelines.

The arrest and indictment were announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois, and Robert J. Holley, Special Agent in Charge of the Chicago Office of the Federal Bureau of Investigation. The government is being represented by Assistant U.S. Attorney Sunil Harjani.

The public is reminded that an indictment contains only charges and is not evidence of guilt. The defendant is presumed innocent and is entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.

http://www.fbi.gov/chicago/press-releases/2014/riverdale-marina-redeveloper-arrested-on-federal-charges-for-allegedly-defrauding-the-village-of-370-000-in-public-funds?utm_campaign=email-Immediate&utm_medium=email&utm_source=fbi-in-the-news&utm_content=315601

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David Saks



Time&Temp Memphis

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