A federal judge has sentenced a Chicago real estate developer to three years in prison in connection with fraudulent activity that included the double-pledging of funds secured by commercial properties.
The developer, Laurance H. Freed, must also pay a $250,000 fine and more than $575,000 in restitution, according to a report from the U.S. Attorney's office in the Northern District of Illinois.
Freed was convicted on three counts of bank fraud, one count of mail fraud and four counts of making a false statement to a financial institution last year.
Among the loans involved in the scheme were two tax increment financing notes to Uptown Goldblatts Venture LLC, a company formed by JFA to redevelop the former Goldblatt’s store in the Chicago’s Uptown neighborhood.
The two notes combined represented $6.7 million in principal. In 2002, while Freed was president of Joseph Freed & Associates, he pledged one of them to Cole Taylor Bank as collateral.
Several years later he represented that the notes were owned free of other secured interest and allowed them to be double-pledged to a LaSalle Bank, which had recently been purchased by Bank of America.
In 2009 and 2010, Freed signed false affidavits seeking to obtain more than $1.5 million in TIF payments from the city, knowing that he was not entitled to the payments, according to evidence presented at trial.
Freed also withdrew more than $7 million from a partnership without the knowledge and consent of his business partner Kimco, which owned 45% of the venture, and recorded the money as "loans."