Chicago Ald. Patrick Daley Thompson, nephew and grandson of the city’s two legendary mayors, was charged Thursday as part of a federal investigation into the collapse of a clout-heavy bank in his family’s longtime Bridgeport neighborhood, records show.
Thompson, who has served as 11th Ward alderman since 2015, was charged in a seven-count indictment with filing false tax returns and lying to Federal Deposit Insurance Corp. officials about $219,000 in loans and other payments he’d received from Washington Federal Bank for Savings before it was shuttered in 2017.
Washington Federal collapsed in 2017, leading to federal charges against a number of the bank’s executives and former customers alleging a multiyear, $31 million embezzlement scheme that preceded the institution’s failure.
An arraignment date for Thompson has not been set.
In a statement released by his lawyer Thursday afternoon, Thompson said his “conscience was clear” and that he was guilty only of “inadvertent tax preparation errors.” He said he’d subsequently paid the back taxes owed and repaid the rest of the loan in question.
“I did not commit any crime, I am innocent, and I will prove it at trial,” the statement said. He also noted that the alleged offenses were committed before he became alderman.
“The charges in the indictment do not relate in any way to my public service or to my professional life,” the statement read. “I remain 100 percent dedicated to serving the people of Chicago to the best of my ability.”
Prior to the indictment being announced Thursday, Thompson spent two hours taking part in a City Council debate over whether to rename Lake Shore Drive for Jean Baptiste Point DuSable, the Black man credited with founding Chicago. Thompson took part in the contentious discussion several times, seeking clarity on technical language in the ordinance.
Thompson, 51, is the latest in a long line of current and former Chicago aldermen accused of running afoul of the law.
His colleague, Ald. Edward Burke, 14th, is currently awaiting trial on sweeping federal racketeering charges — a case brought after another former council member, ex-Ald. Daniel Solis, wore a wire for the FBI. Also under investigation is 34th Ward Ald. Carrie Austin, whose ward office was raided by federal agents in June 2019. Neither Austin nor Solis has been charged with a crime.
The charges against Thompson, meanwhile, are the first to ever be brought against a Daley family member who’s held public office.
In 2012, another nephew of former Mayor Richard M. Daley, Richard Vanecko, was indicted on manslaughter charges stemming from a fatal altercation on the city’s Near North Side in the 2000s, Vanecko was later sentenced to 60 days in jail.
The indictment alleged Thompson’s first loan for $110,000 was issued by Washington Federal in November 2011, in the form of a check payable to a law firm as Thompson’s capital contribution. Thompson signed a note promising to pay the money back, but according to the charges he made only one payment on it the following February and never paid off the rest.
In March 2013, Thompson solicited a $20,000 payment from Washington Federal that was completely off the books and given with no collateral, according to the charges. Thompson allegedly used the money to pay past-due taxes to the Internal Revenue Service, but never paid a penny in principal or interest to the bank.
Ten months later, Thompson received another $89,000 loan from the bank in similarly secret fashion that he used to pay off a lien that another financial institution had placed on a property he owned, according to the indictment. Thompson also made no effort to repay that money, the charges stated.
The indictment also alleged that Thompson filed false tax returns over a five-year period stating he had paid a total of more than $171,000 in interest to Washington Federal related to the loans, when actually he had paid nothing, the indictment alleged. He also allegedly understated his taxable income on those same returns.
When FDIC officials questioned him about the money in 2018, Thompson lied on two separate occasions, saying he believed he owed $100,000 to $110,000 “and that any higher amount was incorrect,” the indictment stated.
He also told investigators that the first loan was for “home improvement” when he knew it had been paid to a law firm.
Thompson, a real estate attorney, began his political career nearly a decade ago when he was elected to the Metropolitan Water Reclamation District in 2012.
With the support of Richard M. Daley and another uncle, Cook County Commissioner and 11th Ward Democratic Committeeman John Daley, he then promptly won a seat on the City Council in 2015, representing the South Side Bridgeport neighborhood that has been his family’s seat of political power for decades.
Observers noted Thompson’s jowly, blue-eyed resemblance to his grandfather, a connection bolstered by the fact he owns the Bridgeport bungalow that his grandfather Richard J. Daley lived in.
When he ran for aldermen, Thompson played coy when asked about possible mayoral ambitions, saying he wanted to win the council seat “and, then, take four years at a time, and take a look and see.”
On the council, Thompson largely backed former Mayor Rahm Emanuel, though he pushed back against Emanuel’s moves to toughen restrictions on tobacco sales, saying they hurt corner stores in his ward.
He endorsed Toni Preckwinkle in the 2019 mayoral runoff election, and has voted against some of Mayor Lori Lightfoot’s major spending initiatives, including her 2021 budget with its $94 million property tax increase and her plan to borrow $1.4 billion to help fund a major infrastructure package.
Still, he’s voted with the mayor on other issues and isn’t considered a hard-line Lightfoot opponent like some of his colleagues on the council.
Thompson’s alleged role in the ongoing investigation into the collapse of Washington Federal was first revealed by the Chicago Sun-Times in a series of reports beginning in 2019.
Washington Federal was shut down in December 2017 after banking regulators determined it was insolvent and had at least $66 million in bad loans. Four former Washington Federal employees, including the bank’s chief financial officer and treasurer, were indicted on embezzlement charges last year.
In February, prosecutors added a number of defendants to the case, including Marek Matczuk, one of the bank’s biggest customers who owns the Park Ridge home where bank CEO John Gembara, 56, was found dead less than two weeks before the bank’s closure. His death was ruled a suicide.
Matczuk, 57, is charged with allegedly participating in the embezzlement of more than $6.1 million between 2007 and 2017, according to the superseding indictment.
Also charged in the superseding indictment were James Crotty, 41, of Tinley Park; Boguslaw Kasprowicz, 63, of Burbank, California; and Miroslaw Krejza, 62, of Chicago. The four are charged with allegedly embezzling $23 million from 2004 to 2018, mostly through fraudulent loans, according to the indictment.
The proceeds were used for everything from buying real estate and paying off credit card debt to the purchase of a $450,000 Sea Ray 420 Sundancer boat named “Expelliarmus,” the indictment alleges.
Expelliarmus was a spell from the Harry Potter literary series that was used to disarm opponents.
Also charged in the fraud was Robert Kowalski, a Chicago attorney and former bank customer, who was indicted in 2019 on bankruptcy fraud charges as part of an ongoing criminal investigation into the bank’s collapse. Kowalski was a large debtor of the bank when it was closed by regulators in December 2017 with about $66 million in bad loans, the indictment alleges.
