A federal prosecutor accused the developer behind Block 37 and other big-name shopping centers Tuesday of lying to banks, business partners and City Hall in a bid to keep his company alive in the wake of the financial crisis.
But as Laurance Freed’s fraud trial got underway, his lawyer denied that Freed ever lied about the business maneuvers at the heart of the feds’ case, some of which involved Chicago’s tax-increment financing program. He said mistakes were made, but Freed didn’t scam City Hall.
“The city was never cheated out of any TIF money,” defense attorney Corey Rubenstein said.
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, admitted last week she lied to Cole Taylor Bank about the deal.
But Rubenstein said City Hall also signed off on the use of the TIF note as collateral in both deals — and he said no one remembered it had been used in the first loan.
“It was a mistake,” Rubenstein said. “Everybody made a mistake.”