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