Oak Park man pleads guilty to nearly $50 million construction fraud scheme
Updated: November 6, 2012 3:32PM
CHICAGO — An Oak Park man pleaded guilty Tuesday to defrauding a bank out of nearly $50 million by falsely representing work being done at two downtown Chicago properties.
Bassam Hajyousif, 44, of Oak Park, pleaded guilty to one count of bank fraud, according to the U.S. Attorney’s office.
He defrauded CIB Bank of Hillside of $48.8 million in two failed projects in which he attempted to convert downtown office buildings into condos, federal prosecutors alleged.
Hajyousif and co-defendant Romel Esmail convinced CIB Bank to lend them money to buy and develop properties at 6 N. Michigan and 59 E. Van Buren by lying about the sales price, their equity in the projects and the intended use of the borrowed money, according to prosecutors.
In the plea, Hajyousif admitted misrepresenting the purchase price of the of the property at 6 N. Michigan Ave. to get 100 percent of the inflated price instead of the 70 percent the bank initially offered.
The two purchased the property for $13 million and submitted fictitious documents claiming they paid more than $17 million to get a $13.64 million loan, prosecutors said.
And between July and December 2000, they obtained $8.5 million in “mezzanine loans” to pay project expenses until they could get a $30 million construction loan, the plea states. But they used the money to buy the property at 59 E. Van Buren and buy Esmail a car, jewelry and stock.
In 2001, they obtained a $483 million construction loan to complete the project and repay existing loans, and applied for 14 “draws” from the bank by submitting false documents, prosecutors alleged.
U.S. District Judge Harry Leinenweber will sentence Hajyousif on Feb. 20. He faces up to 30 years, but the plea agreement calls for a sentence of 81 months in prison, plus a fine and mandatory restitution, a release from the U.S. Attorney’s office said. He remains free on bond until sentencing.
Esmail remains a fugitive believed to be living out of the country.