If you haven’t been reading the ongoing investigative series on Bridgeport’s crooked Washington Federal Bank — you should.
It is, sad to say, a classic Chicago tale of political power and corruption, involving long-time family-run institution shut down in 2017 for widespread fraud. One reader has even suggested to us that the story has the makings of a movie script, and it’s not hard to see why.
There’s the bank CEO who was found dead — officially of suicide, though as one lawyer put it, the circumstances were “as strange as it comes” — in the million-dollar suburban home of a friend who had nearly $2 million in several outstanding loans with the bank.
Then there’s the one-time alderman from the politically powerful Daley family, whose involvement with the bank sent him from City Hall to federal prison.
Patrick Daley Thompson is one of more than a dozen people convicted in connection with the bank’s fraud.
You get the drift why Netflix might bite.
But, as the latest story by the Sun-Times’ Tim Novak reminds us, the story goes beyond corruption and intrigue. Innocent bank customers paid the price for trusting a family-run institution to do the right thing.
Dozens of customers lost up to $312,000 each after investing substantial sums — in excess of the Federal Deposit Insurance Corp.’s insurance reimbursement limit — in the bank’s high-interest certificates of deposit.
One example: The doctor from Glencoe who deposited $2.7 million and was wrongly told that his deposit was fully insured, by a branch manager who you think would know FDIC rules.
The doctor eventually got back most of the money, but is still out some $105,000.
The high interest rates lured in some four dozen people whose accounts fueled the bank’s embezzlement scheme, according to court records from the trial of Marek Matczuk, who was convicted of embezzling $6 million in the bank’s scheme.
Matczuk owned the home where bank CEO John Gembara was found dead.
One woman, whose father put all of his money in the bank because he knew and trusted a senior vice president there, said she’d voiced her suspicions to him. “I remember saying to my dad, ‘Doesn’t that raise alarm bells that they are offering so much better rates?” the woman recalled.
Her father has since died, never fully recovering the money he had deposited. The vice president he trusted, Janice Weston, pleaded guilty in the embezzlement scheme.
Weston is Gembara’s sister.
Weston, Matczuk and others convicted in Washington Federal Bank for Savings’ corruption scheme deserve to pay a steep price. They lured in innocent customers who are still out tens of thousands — and may never recoup their losses.
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