Ald. Patrick Daley Thompson guilty on all counts

Four blocks south of Chicago’s Daley Plaza, in a courthouse his famous grandfather helped dedicate before he was even born, Ald. Patrick Daley Thompson on Monday became just the latest in a long line of Chicago City Council members to be convicted in federal court.

A jury made up of eight women and four men — teachers, sales associates, an emergency medical technician and others — deliberated about three-and-a-half hours before finding the 11th Ward council member guilty of two counts of lying to regulators and five counts of filing false income tax returns.

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Thompson is the grandson of the late Mayor Richard J. Daley and the nephew of former Mayor Richard M. Daley. The historic verdict arrived at the end of a toe-to-toe, surprisingly dramatic tax trial on the 25th floor of the Dirksen Federal Courthouse, where the late mayor’s name can be found on the wall. Richard J. Daley also helped dedicate the building in 1964.

The verdict followed about two-and-a-half hours of closing arguments, during which Assistant U.S. Attorney Brian Netols told jurors “no one is so big, no one is so important, that they can’t be held accountable for their criminal conduct.”

Defense attorney Chris Gair insisted the case was full of reasonable doubt, and he said prosecutors were “desperate” to convict “Patrick Daley Thompson.”

He emphasized “Daley.”

Because of COVID-19 restrictions, Thompson’s family had to watch the verdict through a video feed in the building’s ceremonial courtroom. His oldest daughter, Nora, burst into tears and dashed into the hallway. Thompson’s wife, Katie, sobbed while she was consoled by her father.

Thompson, viewed via a video screen in the overflow room, had no obvious reaction to the verdict. After court adjourned, he was seen walking from the courtroom to a witness room across the hall.

Thompson was later flanked by friends and family as he walked past reporters who tried to ask questions in the courthouse lobby. He had his hands on the shoulders of his wife and daughter as they walked ahead of him outside the building while TV cameras swarmed.

“Stop shouting at him, he doesn’t have any comment,” Gair told reporters.

The defense attorney and former federal prosecutor then said: “Extremely disappointed in the verdict. It was wrong. And I’m extremely disappointed in the United States attorney’s office for bringing this prosecution and for the things it said in the closing argument.”

U.S. District Judge Franklin Valderrama set Thompson’s sentencing for July 6. The most serious counts against him carry a maximum sentence of 30 years, but his lawyers will surely ask for probation. Thompson’s crimes cost the Internal Revenue Service $15,589.

Meanwhile, state law requires Thompson to resign his seat on the City Council.

Richard M. Daley could not be reached for comment on the verdict. Neither could William Daley, another Thompson uncle who once served as chief of staff to President Barack Obama.

Thompson is the youngest child of Patrcia Daley Martino, the eldest child of the late mayor. Thompson and his wife raised their three children in the late mayor’s bungalow. His wife, eldest daughter, siblings Courtney and Peter Thompson, and his in-laws attended every day of the trial.

Thompson was also the first sitting City Council member in more than two decades to face trial. Most who are federally charged plead guilty. And Thompson’s case might now be the latest reason why: Despite a hard-fought defense that seemed to score key points, jurors still found Thompson guilty on every count.

One of those jurors, 30-year-old Kennetta Holden, said one other member of the panel brought up Thompson’s connection to the Daley family. She said that person was shut down immediately by others who insisted that political connections should play no role in their decision.

“We reminded that juror that we’re going based off the evidence, not anything to do with who he’s related to. We kind of just said, ‘OK. That’s irrelevant.’ It was, like, so quick. We just shut it down right then and there,” she said.

Holden said she’d never heard of the Daley family before the trial and, as she drove home Monday night, she still wasn’t sure who they were.

“I might Google it,” said Holden, before adding that she also might not look it up because she has two kids, including an 11-month-old, and “better things to do.”

She grew up in the suburbs about 45 minutes northwest of Chicago and still lives there.

Ashlee Rezin/Sun-Times

The case against Thompson revolved around $219,000 he received from Washington Federal Bank for Savings in Bridgeport, which was shut down in December 2017 amid allegations of massive fraud, days after its president was found dead in a bank customer’s $1 million home.

Fourteen people have been charged in a multimilion-dollar embezzlement scheme at the bank. Its late president, John F. Gembara, has also been implicated.

Thompson did not testify during the trial.

Thompson got a $110,000 loan from Washington Federal in November 2011, followed by additional payments of $20,000 in March 2013 and $89,000 in January 2014. He made one $389.58 payment in February 2012 but paid no interest, according to the feds.

Meanwhile, after Washington Federal failed, the Federal Deposit Insurance Corp. handed Thompson’s loan over to Planet Home Lending.

Thompson falsely claimed mortgage-interest deductions for interest purportedly paid to Washington Federal on his tax returns for the years 2013 through 2017. Thompson also lied in early 2018 to a Planet Home Lending customer-service representative and two FDIC contractors about how much he borrowed.

Thompson wound up settling the debt with the FDIC for a payment of the principal amount borrowed, $219,000, in December 2018, records show. He also filed amended tax returns and attempted to pay the taxes he owed, but the returns and payments for 2013, 2014 and 2015 were rejected for being too old, an IRS agent testified.

During closing arguments Monday, Assistant U.S. Attorney Michelle Petersen told jurors that Thompson had been “a lawyer for a long time.” She called him “sophisticated” and said he “can deal in the fine print.”

“When he saw an opportunity to lie, to deceive, to pay less than what he owed, he took it,” Petersen said. “And his lies follow a pattern.”

Defense attorneys blamed Thompson’s accountants at Bansley & Kiener for the deductions wrongly claimed on his tax returns. They said Thompson was too busy and frazzled to notice them. But Petersen said Thompson was “not a disengaged taxpayer.” Rather, his correspondence with accountants showed he was paying attention and asked questions.

For example, records show Thompson emailed his accountant in April 2017 about his 2016 tax returns, asking about potential adjustments for his wife’s use of the house as her office.

Perhaps the most contentious point of the trial revolved around whether Thompson lied to Planet Home Lending and the FDIC contractors in early 2018. Planet Home Lending sent Thompson a statement in February 2018 that said he owed a principal balance of $269,120. Jurors heard a recording of Thompson’s follow-up call to a customer-service line in which he claimed he had borrowed $100,000 or $110,000.

“I’m very perplexed,” Thompson said in the call. “This is a significantly higher and much more than — remotely of what we were talking about.”

He added later, “And I dispute that.”

Gair insisted Thompson did not say he “only” borrowed $110,000 and nothing else, as was charged in the indictment. But Petersen argued that’s what he said “in substance.”

Thompson signed loan applications in 2016 listing his Washington Federal balance as $249,050, Petersen pointed out. She also showed jurors an envelope Thompson turned over to the feds that had the word “tax” written in large letters in red ink, with the words “Washington Fed” and “$249,049.96” with a “?” scribbled in blue ink nearby.

U.S. District Court

Despite that, Petersen alleged that Thompson sought to resolve the Planet Home Lending inquiry quickly, and in his favor, because “if he can get them to hurry up they might not dig any deeper” and find records of the second and third Washington Federal payments totaling $109,000.

Finally, Petersen noted, Thompson only amended the tax returns at issue in his trial after he was visited Dec. 3, 2018, by federal agents and given a grand jury subpoena. Though unrelated, that visit occurred just days after the feds publicly raided the offices of Thompson’s colleague, Ald. Edward M. Burke, who now faces criminal charges of his own.

“The defendant is a lawyer,” Petersen said of Thompson. “He knows a subpoena is serious business. And you know it’s common sense that he read this thing in detail. Because it’s unusual, and it’s important.”

Gair pushed back on the notion from Petersen that Thompson had somehow hatched a plot, including by having a conversation with his accountant that led to the filing of his amended returns.

“It would take a master criminal to do that,” Gair said.

Rather, Gair painted an unflattering portrait of Thompson as disorganized and inattentive to detail. He told jurors that Thompson has “two full-time jobs and three offices, and he’s running hither and thither all the time.”

Gair said that, once Thompson realized the errors on his tax returns, “he did what an honest person does when they find out that they’ve made a mistake. He fixed it.”

“He’s a straight arrow,” Gair said.

Contributing: Emmanuel Camarillo

Ashlee Rezin/Sun-Times