FDIC wants $14.5 million from dead Bridgeport banker’s estate over massive fraud

In the five years leading up to the strange death of John F. Gembara, the Bridgeport bank president found dead in December 2017 at a customer’s Park Ridge home, his lending practices took a bizarre turn, records examined by the Chicago Sun-Times show.

Gembara gave four customers a series of unsecured “loan advances,” with little or no paperwork or collateral or any expectation it ever would be repaid, authorities say.

The payouts totaled $14.5 million, according to records involving the clout-heavy bank and Gembara, who federal regulators say was involved in a massive fraud scheme.

They included 189 advances, totaling $2.8 million, given to Marek Matczuk, the owner of the northwest suburban home where Gembara was found dead on Dec. 3, 2017. Less than two weeks later, federal regulators shut down Washington Federal Bank for Savings.

Now, government regulators say Gembara’s estate should repay all of that money.

“As WaFed’s president, chief executive officer, chairman of the board, and as a member of the Bank’s loan committee, Gembara owed the Bank fiduciary duties of loyalty, care and good faith, and he was required to conduct the Bank’s business consistent with prudent, safe and sound practices,” attorneys for the Federal Deposit Insurance Corp. say in a claim filed in Cook County circuit court that blasts Gembara’s handling of the bank’s finances.

“Gembara was obligated to ensure that loan advances were made only if they were supported by loan documents, conformed to the terms and conditions of those documents and the Bank’s loan policies, and otherwise conformed to prudent, safe and sound practices.

“Gembara breached his fiduciary duties, failed to exercise that degree of care which prudent persons would exercise in the management of their own affairs, disregarded the Bank’s Real Estate Lending Policy and prudent lending standards, and ignored the foreseeable risk that his repeated disregard of applicable policies and standards would have harmful consequences for the Bank.”

The FDIC was appointed Washington Federal’s receiver after another federal agency shut down the bank on Dec. 15, 2017, over what initially was believed to be more than $60 million in losses tied to dozens of questionable loans. The FDIC wants whatever assets Gembara left behind to repay the $14.5 million.

After further investigation, the agency calculated the bank’s losses exceeded $82 million.

Where did all of that money end up? And why did the bank make many of those loans to begin with? Those are among the questions federal authorities are trying to answer as they try to unravel the bank’s demise and to determine whether Gembara killed himself, as the Park Ridge police and the Cook County medical examiner determined, or was murdered, as some family and friends believe.

CLICK HERE FOR VIDEO: Reporter Robert Herguth discusses the story on WCIU’s The Jam

Neither the FBI nor the U.S. attorney’s office will comment on the investigation.

Among the loans under scrutiny is one for $80,000 that Ald. Patrick Daley Thompson got weeks before the bank closed. The loan was for repairs that city inspectors ordered for the headquarters of the 11th Ward Regular Democratic Organization, which Thompson and the Daley family have controlled for decades.

Gembara’s body was found — seated in a chair, a rope around his neck — inside the master bedroom of Matczuk’s house more than 20 miles from the bank president’s home in Palos HIlls.

Authorities say Gembara knew federal bank overseers were about to shut down the century-old bank that his grandfather founded.

The FDIC won’t identify the four customers who got the $14.5 million in unsecured loans. Its claim against Gembara’s estate identifies them only by their initials.

But the Sun-Times has confirmed that those customers were Matczuk, businessman Patrick T. Fegan, contractor Boguslaw Kasprowicz and Robert M. Kowalski, an attorney and smalltime developer who had a long association with Gembara, and that these are the amounts of money authorities believe each got from Washington Federal:

• Records show Matczuk, 56, got more than $2.8 million in unsecured loan advances between January 2013 and Nov. 1, 2017, about a month before Gembara was found dead at his home.

At the time of Gembara’s death, Matczuk had five mortgages from Washington Federal totaling nearly $2 million, covering his home and three other residential properties. Those loans included a $662,000 mortgage — one of three mortgages on Matczuk’s home. U.S. Bank, which holds the first mortgage, is now foreclosing on the house. In court documents, it says Matczuk and his wife owe $1.2 million on that mortgage.

Matczuk, who couldn’t be reached, described himself in a previous interview as a friend of Gembara. According to the police, Gembara was a weekend guest at the Matczuk home when his host’s wife, Renata Matczuk, found him dead.

Kevin Tanaka / Sun-Times file

• Fegan, the owner of Paddy O’Fegan’s, a restaurant and bar at 204 N. Halsted St., got 23 advances totaling $959,558 between February 2013 and Oct. 19, 2017, records show.

Fegan, 58, of Chicago, was the campaign manager for Kowalski’s estranged wife, attorney Martha Padilla, when she ran unsuccessfully to unseat Ald. Danny Solis (25th) a dozen years ago, according to Kowalski. The following year, city records show, Kowalski and Padilla notarized documents Fegan submitted to City Hall to obtain a liquor license.

City Hall records listed Kowalski’s father Andrew Kowalski as the masonry contractor for Fegan’s bar, but Kowalski says his late father didn’t do the work.

• Kasprowicz, 61, of Chicago, got 93 advances totaling $9.3 million between January 2013 and Nov. 13, 2017, according to the FDIC claim.

Washington Federal also issued six mortgages totaling $2.4 million to Kasprowicz, including one for $750,000 on his home in the 1800 block of North Honore Street.

Last fall, a New York bank filed a foreclosure suit against the Kasprowicz home.

Kasprowicz, who couldn’t be reached, is believed to be in the Los Angeles area, where his son is an actor.

Kowalski says Kasprowicz was “my bricklayer.”

Provided

• Kowalski, 57, of Chicago, got 142 advances totaling $2.1 million between December 2012 and July 2017, records show, though he says he doesn’t know anything about any advances.

The FDIC says Kowalski owes $21.6 million on loans from Gembara’s bank.

Kowalski has filed for bankruptcy protection.

In an effort to recover the unpaid money, bankruptcy court officials are preparing to sell his real estate holdings, which include apartments he leased to low-income tenants whose rent payments were subsidized by the federal government under the Department of Housing and Urban Development’s Section 8 program.

Kowalski says his father and grandfather were customers of the bank and that they once lived next door to Gembara and his parents in the 4500 block of West 65th Street on the Southwest Side.

“John was born on the day of my parent’s wedding, so his parents didn’t go to the wedding,” according to Kowalski, speaking during a 90-minute interview at the Cook County Jail.

Provided

He’s being held there for contempt of court in a separate court case, this one involving his divorce from Padilla.

Kowalski, his brother William Kowalski and Gembara co-owned a yacht that’s listed as an asset in his bankruptcy and divorce cases, as well as in Gembara’s probate case.

A lawyer for Gembara’s widow has said she doesn’t know where the boat is.

Kowalski says he arranged for an associate, who was also a Washington Federal client, to put it in storage last fall. He says he doesn’t know where.

“It’s lost,” Kowalski says with a smile and a wink.

Sea Ray

He says he brought the bank a lot of customers — including Fagen, Matczuk and Kasprowicz. “I introduced them all to the bank,” he says.

Besides borrowing money for real estate deals across the city, Kowalski says he also did legal work for the bank. He says he worked with recipients of Washington Federal home loans who were in bad shape financially, helping them avoid foreclosure and repay the money they borrowed.

“I was the attorney for certain catastrophes, projects that went bad,” Kowalski says. “I worked my magic.”

He also had a close relationship with the late power broker Oscar D’Angelo, who was known as unofficial mayor of Little Italy and was an ally of Mayor Richard M. Daley until they had a falling out. Kowalski once owned a three-flat in the 1100 block of Vernon Park Place that he tried to sell to Patrick Daley, the mayor’s son, in 1999. The deal fell through after D’Angelo used a hydraulic lift that the University of Illinois at Chicago had lent a neighborhood association for work being done on the roof — an arrangement that infuriated the mayor.

Another Daley associate, William M. Mahon, who’s now a high-ranking official in Chicago’s Department of Streets and Sanitation, was on the bank’s board until it was shut down.

Mahon’s brother-in-law Michael Huels, now retired, was an accountant for the auditing firm Bansley & Kiener — the auditors who, five months before federal regulators closed Gembara’s bank, had given Washington Federal a clean bill of health.

Huels, a first cousin of former 11th Ward Ald. Patrick Huels, wasn’t part of the company’s final audit of Gembara’s bank. But records show he worked on previous audits of the bank.

Google Street View

The auditing firm also does work for the 11th Ward Democratic Party and has made campaign contributions to the Daleys.

The FDIC subpoenaed Bansley & Kiener’s records as part of its investigation of Washington Federal’s failure, which had been the most recent in the United States until Enloe State Bank in Cooper, Texas, was shut down May 31.

But the auditors refused to hand them over until recently being ordered to do so by a federal judge. According to the judge’s order, officials at the firm feared the records could lead the federal agency to sue them as part of their efforts to recover whatever they can of the bank’s lost millions.

Kowalski says it’s clear to him that federal officials think he had a role in the bank’s collapse. But he says he paid off some of the loans that regulators say he still owes, blaming Gembara for failing to keep accurate records.

“I’m the victim of identity theft here,” Kowalski says. “I wasn’t trying to scam the bank.”

Whether the FDIC will be able to collect any money from Gembara’s estate is uncertain.

Therese Gembara, his widow, recently filed an inventory of his estate. Her estimate of its worth? Just $63,283.71.