Chicago real estate developer convicted of fraud

The president of a prominent Chicago real estate company best known for developing Block 37 in the Loop has been convicted on fraud charges related to the redevelopment of the old Goldblatt’s department store in Uptown, federal authorities said.

After a two-week trial, Laurance H. Freed, 53, of Chicago, was convicted by a federal jury on Feb. 24 on three counts of bank fraud, one count of mail fraud and four counts of making a false statement to a financial institution, according to a statement from the U.S. attorney’s office. The charges carry a combined maximum sentence of 230 years in prison.

Freed, the president of Joseph Freed and Associates (JFA), and his vice president Caroline Walters were accused of lying about and concealing unpaid property taxes; double-pledging financing notes issued by the city of Chicago so that the company could get extensions of credit when the company was allegedly having serious financial problems; and defrauding a joint venture partner by providing false information to obtain loans, prosecutors said.

JFA double-pledged two tax-increment financing notes from the city, worth a combined principal of $6.7 million, to two different banks as collateral, prosecutors said. As the company experienced financial difficulties, Freed withdrew more than $7 million from the Streets of Woodfield Mall in Schaumburg, without the knowledge of his business partner Kimco Realty Corp., and fraudulently recorded the money as loans.

Walters, 55, of Palatine, pleaded guilty earlier in February to one count of making a false statement to a financial institution. The charge carries a maximum sentence of 30 years in prison, prosecutors said.

U.S. District Judge Robert M. Dow did not immediately schedule a sentencing hearing for Freed, but a status hearing is scheduled for March 24, prosecutors said. Walters’ sentencing hearing is scheduled for June 10.