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Posted on 10/31/2011 3:57:44 PM PDT by opentalk
Officers and directors of Mutual Bank issued $10.5 million in "imprudent" dividends, spent $250,000 of the bank's money on a wedding, and paid $495,000 in defense costs for a spouse's Medicaid fraud case before the Harvey-based lender failed in July 2009, a federal regulator alleged last week.
Mutual was the bank that financed the purchase by the wife of political fundraiser Tony Rezko of a side lot in a deal that enabled Barack Obama to buy his dream house.
In a lawsuit filed in a U.S. District Court in the Northern District of Illinois last week, the Federal Deposit Insurance Corp. also accused the bank of spending $300,000 to hold a board meeting in Monte Carlo, Monaco.
The FDIC is suing eight former directors, two officers and the bank's lawyer.
The failure of the $1.7 billion-asset bank, which had 10 branches in the Chicago area, is expected to cost the FDIC $775 million. From 2005 to 2009, the lender had nearly doubled in size, fueled by what would turn out to be bad real estate loans, many of which were made to about 15 borrowers. Record-keeping was shoddy, and loan terms were changed at closing with no board approval, the suit said.
(Excerpt) Read more at chicagotribune.com ...
“Why did Mutual Bank fire whistleblower Kenneth J Connor after he challenged the appraisal on the land purchased by Rita Rezko, just prior to the land sale to Obama?
It would be worth while giving them a little plea arrangement if they agree to trill a worth-while ditty like good little birdies.
If they claim they know nuttin', try a little Lake Michigan water-boarding. It's so refreshing in the dull days of a Chicago winter.
Leni
Shouldn't the bank's auditor be indicted too?
“fueled by what would turn out to be bad real estate loans, many of which were made to about 15 borrowers.”
And who were the “15 borrowers”?
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