A federal jury convicted the developer behind Block 37 and other big-name shopping centers Wednesday of about half the counts in an indictment that accused him of lying to banks, business partners and City Hall.
The feds accused Laurance Freed of telling those lies as he tried to keep his company alive in the wake of the financial crisis. Some of the business maneuvers at the center of his indictment involved Chicago’s tax-increment financing program. Freed’s lawyer told the jury mistakes were made, but Freed didn’t scam City Hall.
Freed and his legal team left the courtroom quietly after the verdict was read Wednesday afternoon. His lawyers declined to comment.
The jury handed down its split-decision verdict at the end of a two-week trial, convicting Freed on eight counts that included lying to banks and to City Hall. He was acquitted on seven additional counts.
Prosecutors said Freed’s Joseph Freed & Associates pledged the same TIF note from the redevelopment of the former Goldblatt’s Department Store in Uptown as collateral for a $15 million loan in 2002 from Cole Taylor Bank and for a revolving line of credit from a bank consortium for up to $105 million in 2006. They said Freed then lied about the deals as he sought more cash from the banks and TIF funds from City Hall.
Freed was president of the firm, which has also been involved in Evanston Plaza, West Town Center and the Streets of Woodfield.
Caroline Walters, the vice president and treasurer of Joseph Freed & Associates, pleaded guilty this month and admitted she lied to Cole Taylor Bank about the deal. But Freed’s lawyers said City Hall also signed off twice on the use of the TIF note as collateral — and they said no one remembered it had been used in the first loan.