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Oak Brook man pleads guilty to making false statements over Western Springs bank
Updated: September 17, 2012 1:58AM
OAK BROOK — An Oak Brook man has pleaded guilty to allegations he engaged in a scheme to make false statements in bank regulatory documents.
James A. Regas, 82, pleaded guilty to one count of scheming to make false statements in a criminal information filed June 19. Regas was chairman of the Board of Directors of the former Western Springs National Bank & Trust, purchased by Heartland Bank and Trust Company in April 2011.
According to a release from the U.S. Department of Justice, Regas admitted to falsifying and concealing information that should have been disclosed to bank directors and government regulators in 2008 and 2009.
He pleaded guilty Wednesday at his arraignment in U.S. District Court in Chicago. He faces a maximum penalty of five years in prison and a $250,000 fine, and has agreed to pay full restitution. Sentencing is scheduled for Oct. 25.
According to the Justice Department, Regas had bank employees file false quarterly condition and income reports with the Federal Deposit Insurance Corp., signing them knowing they contained false information over the delinquency of some loans.
“Regas admitted that between 2004 and 2009, he referred business associates to Western Springs for loans, without disclosing to the bank that he had financial partnerships with such business associates and that he intended to benefit from the loans,” according to the release.
Regas submitted false conflict-of-interest statements to the bank, denying financial relationships with any bank borrowers.
Among the loans Regas reportedly benefitted from were:
An $803,000 loan to North Park Webster LLC in December 2004, used partially to finance the purchase of three Evanston properties, in which Regas and family members had financial interests;
A $500,000 loan to one of Regas’ associates in November 2005, from which he received about half of the proceeds indirectly through a third-party;
A $750,000 loan to a real estate investor in September 2008 to finance the investor’s purchase of an Evanston apartment building, from Regas. That building served as collateral for the bank on another loan Regas acquired and sold through a nominee company.
The loans allowed Regas to use bank money without applying for loans himself, according to the release, while evading federal insider loan restrictions. The loans were not fully repaid, and the bank suffered about a $682,000 loss, according to the plea agreement.
