Two years ago, the Cook County Land Bank Authority sold two West Side lots to a convicted drug dealer who at the time was free on bail and required to wear an electronic monitoring bracelet while awaiting trial in another drug case for intent to distribute a kilo of cocaine.
Obed Eli Ornelas paid $22,602 for the adjacent lots in the 600 block of North Cicero Avenue in West Garfield Park, less than the length of a football field north of his existing used-car business, Xclusive Automotive LLC.
Together, the vacant lots had amassed nearly $10,000 in unpaid taxes when Ornelas signed a deal with the county agency in August 2017 to buy the properties, with plans of expanding the business he shared with a partner to now also sell secondhand luxury cars — BMWs, Infinitis and Mercedes-Benzes, he told state regulators.
The land bank is under scrutiny by Cook County’s inspector general, who opened an investigation of the agency after the Chicago Sun-Times reported in November that Chester Wilson, chief of staff to Ald. Carrie Austin (34th), donated a dilapidated building to the land bank. That wiped out Wilson’s debt for unpaid property taxes, penalties and interest totaling more than $200,000. At Wilson’s recommendation, the land bank then sold the building to his onetime business partner.
Following the Sun-Times report, Cook County Board President Toni Preckwinkle ordered an audit by an outside firm of the agency created in 2011 by Cook County Commissioner Bridget Gainer to redevelop abandoned buildings in distressed neighborhoods. The auditors’ recommendations included requiring the land bank to document its research of potential buyers of properties it has bought or seized.
At the time Ornelas took the first steps to buy the vacant lots from the land bank, he was on parole after being convicted of possession of marijuana with intent to distribute in a case in which the police raided his Gary home after his electric bills skyrocketed in 2010 and found almost 500 marijuana plants growing inside.
Ornelas and the land bank were in the process of finalizing his purchase of the vacant lots in June 2018 when federal agents arrested him and 56 others in part of a massive drug bust. Federal authorities said he had bought a kilo of cocaine from a co-defendant in a deal that took place in his Ford Mustang a few months earlier. When officers tried to pull him over, they said he tossed the cocaine out of the driver’s-side window of the car.
Released on bail, Ornelas was ordered confined to his home on an electronic monitoring device.
On Nov. 20, 2018, while he was on home confinement, the land bank wiped out the $10,084 in taxes unpaid since 2011 on the lots at 645 N. Cicero Ave. and 647 N. Cicero Ave. and finalized the sale, turning over the properties to Ornelas free of the tax debt.
Under the terms of sale, the land bank also gave Ornelas a $2,000 loan, which he won’t be required to repay as long as he maintains the properties up to code.
At Ornelas’ real estate lawyer’s request, the closing on the land was handled via email so Ornelas, unable to leave his home while on bail, didn’t have to be there in person.
On Jan. 10, Ornelas, 38, pleaded guilty to the cocaine charge. He faces a maximum possible 40-year prison term when he’s scheduled to be sentenced Aug. 27.
He no longer operates the car lot, according to his criminal defense lawyer Robert Rascia, who says Xclusive Automotive is “not an active business.”
Land bank officials say they don’t do background checks on buyers and didn’t know Ornelas was a drug dealer.
Robert Rose, the land bank’s executive director, also says: “While the land bank considers various factors in our selection process, excluding people based on a prior conviction is not one of them. Why wouldn’t we award the vacant lots to an existing, adjacent licensed business in good standing?”
After Ornelas was arrested on the cocaine charge, he was sued by his landlord Ahmad Daoud, who said he failed to pay more than $7,000 in rent on the property Xclusive Automotive began leasing in 2015.
Daoud had sold used cars on the property for more than two decades, doing business as Cairo Auto Wholesaler Inc. His son Adel Daoud is serving a 16-year prison sentence, convicted in an FBI terrorism sting of attempting to blow up a liquor store in the South Loop in 2012.
Federal authorities won’t comment about Ornelas, who has agreed to cooperate with them. His lawyer says that’s “strictly limited to the drug deal.”
Asked about Cook County doing business with a convicted drug dealer who was awaiting trial in a more serious drug case, Rose, in an email, says:
“To be crystal clear, you have not explained the relevance of his background to our decision to sell vacant lots to Xclusive Automotive LLC.
“Obed Ornelas was released on bond in August 2018, so he was not in custody at the time of the purchase. At the time of the sale, he had not been convicted and currently still awaits sentencing. The upshot from this information is that there is nothing revealed that would have — or should have — prevented [the land bank] from working with Xclusive Automotive LLC.”