Former Western Springs Bank Chair Pleads Guilty to Personal-Interest Scheme
James A. Regas, ex-chairman of the now-failed Western Springs National Bank & Trust, has admitted to faking and hiding information regarding his personal interest in loans that cost the bank nearly $700,000.
The former chairman of the now-defunct Western Springs National Bank & Trust has pleaded guilty to one count of conspiring to falsify information in regulatory documents, the U.S. Attorney’s Office of the Northern District of Illinois said Wednesday.
James A. Regas, 82, of Oak Brook, admitted that between 2004 and 2009, he repeatedly referred business associates and financial partners to Western Springs National for loans. In earlier conflict-of-interest statements, he denied that he had any financial relationship with the loan recipients and might benefit from the transactions.
Regas’ plea agreement estimates that the applicable loans cost Western Springs National $681,617 in loans that were never fully repaid.
The loans Regas benefitted from include a $803,000 loan to North Park Webster LLC in 2004 used to finance three Evanston properties in which the Regas family had a stake, and a $500,000 loan to an associate in 2005 from which Regas collected half the proceeds through a third party.
Regas also confessed to ordering employees of Western Springs National to file fake reports with the Federal Deposit Insurance Corp. (FDIC) that concealed his personal interest, and to signing them knowing the information was false. The information was supposed to be disclosed to the bank’s board members and federal regulators.
According to a U.S. Attorney’s Office press release, these actions “enabled Regas to use bank funds for his own benefit without having to apply for loans himself, posting collateral, or signing any promises to repay the bank’s money, while evading federal restrictions on insider loans.”
He now faces a maximum penalty of five years in prison and a $250,000 fine, as well as being required to pay full restitution.
Western Springs National Bank & Trust was shut down by the FDIC in April 2011, and then taken over by Heartland Bank & Trust Co., who assumed the bank’s two locations and its deposits and assets. (The second location is in Countryside.)
The feud between the Regas family and the Moser family, who each owned half of the bank but lost all equity when it failed, came to a head in September of 2010. Eight months before the closure the Mosers sued, alleging that the Regas family was “treat[ing] the Bank’s assets as their own personal piggy bank.”