Former Chicago Rush owner David Staral was arrested Monday on fraud charges over his controversial and doomed purchase of the Arena Football League team.
Staral, 35, filed for bankruptcy before he bought the Rush last year but hid the purchase from his creditors and a bankruptcy court judge, the feds alleged.
Formerly of Chicago, he was arrested at his Kenosha home Monday morning.
Staral appeared in U.S. federal court in Chicago later that day. Dressed in gym shoes, jeans and a blue sweater, Staral stared at the floor, bit his nails and held his head in his hands.
Prosecutors told U.S. Magistrate Judge Geraldine Soat Brown that Staral is a “flight risk” who “might not have a stable place to live.” Brown ordered Staral held in custody until a hearing Tuesday afternoon, at which his possible release on bond will be discussed.
An attorney for Staral said he is hoping to get a place for Staral to stay in Cook County. If that happens Staral might avoid jail while awaiting trial.
The Sun-Times first reported last year the chaos that followed Staral’s brief tenure at the Rush, during which players went unpaid.
The Sun-Times reported in May of last year that Staral was a three-time convicted felon, had just filed bankruptcy and was trailed by litigation. In an interview with the Sun-Times, Staral denied any wrongdoing in buying the team and said: “My past is my past — I’ve been trying to work through it.”
The scandal created a major embarrassment for the Arena Football League, which was apparently unaware Staral was in bankruptcy when he bought what was once the league’s marquee franchise. The commissioner of the Arena League told investigators that if he had known of Staral’s alleged misrepresentations, he would have never allowed him to buy the team.
Charges unsealed Monday allege Staral fraudulently purchased the Chicago Rush when, during purchase negotiations in February 2013, he falsely represented to the Arena Football League’s commissioner that he had a personal net worth of more than $5 million.
He also allegedly lied in bankruptcy court when he testified under oath that he was unemployed, even though he had taken over as manager and owner of the Rush.
He committed bankruptcy fraud by scheming to discharge more than $900,000 in unsecured debt, while concealing from his creditors and the bankruptcy trustee additional businesses he was involved with, income he had received before filing for bankruptcy, and at least two personal bank accounts, the feds allege.
Staral previously filed a bankruptcy petition in 2002 — and knew how it would give him a chance at a fresh start, the feds say.
He also conned two investors in a pair of 2012 scams, according to the criminal complaint against him.
In one, he allegedly took $39,000 from an investor to open a pair of restaurants, then used the money for himself.
In another, he is accused of taking $50,000 from a second investor and spent it on a car and other treats for himself.
The feds say he pocketed $5,000 in Chicago Rush ticket sales for himself and used it to pay for groceries, gas and his car loan.
He faces up to 25 years in prison if convicted of wire fraud and bankruptcy fraud.