Significant Activity Report: United States v. Caroline Walters

Today, Caroline Walters pled guilty to a single count of making a false statement to a financial institution, (18 U.S.C. § 1014) in connection with a City of Chicago Tax Increment Financing (TIF) note issued for the redevelopment of a former Goldblatt’s Department Store located at 4718 N. Broadway. United States v. Caroline Walters 13-CR-951 (U.S.D.C. ND IL).

Walters, the vice president and treasurer of Joseph Freed & Associates LLC (JFA), specifically admitted to having lied to Cole Taylor Bank in 2009 about the double-pledging of a public financing note issued by the City of Chicago. The note was one of two publicly-financed TIF notes issued by the City in 2002, with a combined principle of $6.7 million, to Uptown Goldblatts Venture LLC, a company formed by JFA to redevelop the former Goldblatt’s Department Store in Uptown. Uptown Goldblatts later pledged both of the TIF notes as free and clear collateral in agreements with a bank consortium for a revolving line of credit worth up to $105 million.

Walters told Cole Taylor that JFA would resolve the double pledge as part of its negotiation with the bank consortium to modify and extend its loan when in fact, and as Walters now admits, she knew that the consortium had declared JFA in default and had terminated the negotiations.

The conviction carries a maximum sentence of 30 years in prison and a maximum fine of $1,000,000 or twice the gross gain or gross loss resulting from the offense, whichever is greater.

Sentencing before United States District Court Judge Robert M. Dow is scheduled for 9:00 am on June 10, 2016, in the Dirksen Building, Rm. 1919.

One February 24, 2016, Walters’ co-defendant, developer Laurance H. Freed, JFA’s president, was convicted on 8 counts including bank fraud, mail fraud, and making a false statement to a financial institution (18 U.S.C. § 1344,1341, and 1014).