Four em­ploy­ees of clout-heavy, failed Bridge­port bank charged with $29M em­bez­zle­ment con­spir­acy

Chicago Sun-Times - - CHICAGO SUN TIMES - BY TIM NO­VAK, ROBERT HERGUTH AND JON SEIDEL,

Four em­ploy­ees of a clout-heavy Bridge­port bank whose pres­i­dent was found hanged in the Park Ridge home of a cus­tomer have been charged with help­ing Chicago at­tor­ney Robert M. Kowal­ski and “higher-rank­ing bank of­fi­cials” em­bez­zle at least $29 mil­lion be­fore fed­eral reg­u­la­tors abruptly shut down the bank in De­cem­ber 2017 amid an in­ves­ti­ga­tion of mas­sive fraud.

Those charged in­clude two of Washington Fed­eral Bank for Sav­ings’ for­mer top ex­ec­u­tives: Ros­al­lie C. Corvitte, 45, of Chicago, chief fi­nan­cial of­fi­cer and trea­surer, and

Jane V. Iriondo, 39, of Boise, Idaho, cor­po­rate sec­re­tary.

Also charged: Ali­cia Man­du­jano,

49, of Chicago, a loan ser­vicer, and Cathy M. Tor­res, 39, of Chicago, a loan of­fi­cer.

All four are ac­cused of con­spir­ing to em­bez­zle the $29 mil­lion with Kowal­ski, who was a ma­jor cus­tomer of the bank and al­ready had been in­dicted with his sis­ter Jan R. Kowal­ski, also a Chicago at­tor­ney, on charges they con­cealed as­sets in Robert Kowal­ski’s bankruptcy case.

None of those charged could be reached Fri­day.

As part of the same case, a fed­eral in­dict­ment re­turned Thurs­day in Chicago and made public Fri­day says the for­mer bank em­ploy­ees and “higher-rank­ing of­fi­cials al­legedly trans­ferred the money to Robert Kowal­ski and oth­ers, of­ten with­out any doc­u­men­ta­tion, and fal­si­fied bank records to con­ceal the em­bez­zle­ment” from the Fed­eral De­posit In­sur­ance Corp. and the Of­fice of the Comptrolle­r of the Cur­rency.

At one point dur­ing a fed­eral bank ex­am­i­na­tion, the in­dict­ment says Iriondo told Tor­res to al­ter records re­gard­ing an ap­praisal for a prop­erty Robert Kowal­ski owned, say­ing of the changes, “Those will need to be done with scis­sors and copier.”

The in­dict­ment doesn’t of­fer any clue to per­haps the big­gest mys­tery sur­round­ing the bank fail­ure: how bank pres­i­dent John F. Gem­bara ended up dead, with a Home De­pot rope around his neck, in the sec­ond-floor bed­room of Washington Fed­eral cus­tomer Marek Matczuk’s mil­lion-dol­lar Park Ridge home 12 days ear­lier.

Gem­bara’s death was deemed a sui­cide by the Cook County med­i­cal ex­am­iner, though Kowal­ski and some Gem­bara fam­ily mem­bers have said they think he was killed.

Fed­eral au­thor­i­ties said their in­ves­ti­ga­tion is “on­go­ing.” Pros­e­cu­tors pre­vi­ously said they ex­pect “many” will be charged.

In­ves­ti­ga­tors have said they be­lieve more than $80 mil­lion was si­phoned from Washington Fed­eral, with years of phony pa­per­work ob­scur­ing the miss­ing cash from reg­u­la­tors.

The in­dict­ment added new charges against Robert Kowal­ski in­clud­ing con­spir­acy to com­mit em­bez­zle­ment and to fal­sify bank records. Kowal­ski is ac­cused of un­der­stat­ing in­come and over­re­port­ing ex­penses in tax fil­ings — in­clud­ing claim­ing he paid al­imony he didn’t. Au­thor­i­ties say Gem­bara used the bank’s money to pay prop­erty taxes for Kowal­ski and that the dead bank pres­i­dent — iden­ti­fied as “In­di­vid­ual A” — was part of the em­bez­zle­ment scheme. They say Gem­bara and an un­named per­son trans­ferred money from the bank to Robert Kowal­ski with­out any pa­per­work, then cre­ated phony doc­u­ments to con­ceal it from fed­eral reg­u­la­tors and that the bank gave loans to Kowal­ski and oth­ers that weren’t ex­pected to be re­paid.

Bank fail­ures are rare th­ese days. This one drew added at­ten­tion be­cause of the bank’s ties to the 11th Ward Reg­u­lar Demo­cratic Or­ga­ni­za­tion, long con­trolled by the fam­ily of for­mer Mayor Richard M. Da­ley.

Ald. Patrick Da­ley Thomp­son (11th), his nephew, got an $80,000 loan from Washington Fed­eral in Oc­to­ber 2017 as reg­u­la­tors were un­cov­er­ing fi­nan­cial ir­reg­u­lar­i­ties at the bank. The loan was for re­pairs to the party’s ward of­fice at 3659 S. Hal­sted St. It wasn’t se­cured by col­lat­eral and was de­posited in the ward’s cam­paign fund.

Thomp­son hasn’t been charged with any crime.

Among the bank’s board mem­bers for years was Wil­liam Ma­hon, a po­lit­i­cal ally of the Da­leys and a top of­fi­cial in the city Depart­ment of Streets and San­i­ta­tion who, for a time, was in­volved in loan ap­provals at the bank.

Ac­cord­ing to the in­dict­ment, which iden­ti­fies Ma­hon as “In­di­vid­ual C,” Iriondo and Tor­res in­flated ap­praisals on two prop­er­ties Ma­hon used as col­lat­eral on mort­gages from the bank. Ma­hon hasn’t been charged and couldn’t be reached Fri­day.

Six months be­fore fed­eral au­di­tors un­cov­ered fraud at Washington Fed­eral, the bank got a clean bill of health from in­ter­nal au­di­tors Bans­ley & Kiener, a firm that also does work for Da­ley-con­trolled po­lit­i­cal cam­paigns.

Washington Fed­eral was founded in 1913 by Gem­bara’s grand­fa­ther. Its main of­fice was in Bridge­port at 2869 S. Archer Ave., with a branch at 1410 W. Tay­lor St. in Lit­tle Italy.

Gem­bara, 56, was chair­man of the board, chief ex­ec­u­tive of­fi­cer and pres­i­dent of Washington Fed­eral and its largest share­holder, own­ing 21.4% of its stock.

GOOGLE STREET VIEW

ABOVE: Washington Fed­eral Bank for Sav­ings, 2869 S. Archer Ave., was shut down in De­cem­ber 2017 for “un­safe or un­sound prac­tices” days af­ter its pres­i­dent John F. Gem­bara was found dead at a bank cus­tomer’s home in what au­thor­i­ties la­beled a sui­cide. RIGHT: The first story in the Sun-Times in­ves­ti­ga­tion of the failed Bridge­port bank Washington Fed­eral Bank for Sav­ings, pub­lished March 4, 2018.

Robert M. Kowal­ski PRO­VIDED

Ald. Patrick Da­ley Thomp­son (11th).

Wil­liam M. Ma­hon FACE­BOOK

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