Ald. Patrick Daley Thompson pleads not guilty to federal charges in bank probe

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Ald. Patrick Daley Thompson, grandson and nephew of two legendary Chicago mayors, pleaded not guilty Thursday to federal charges stemming from a probe into the collapse of a clout-heavy bank in his family’s longtime Bridgeport neighborhood.

Thompson, 51, entered his plea during an arraignment by telephone before U.S. District Judge Franklin Valderrama, who set a recognizance bond for Thompson.

Thompson, who has served as 11th Ward alderman since 2015, was charged last month 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’s collapse has also led 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.

Thompson, meanwhile, sounded a defiant tone after his indictment, saying in a statement released by his lawyer that 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. “The charges in the indictment do not relate in any way to my public service or to my professional life. I remain 100 percent dedicated to serving the people of Chicago to the best of my ability.”

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, according to the charges.

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