A federal judge today refused to release Chicago real estate developer John Thomas on bail so he can repair and then help sell the Riverdale marina project he was convicted of looting, saying he found it "absolutely impossible to trust" that the serial fraudster would behave.
"I don't believe he can keep his word," U.S. District Judge James Zagel said in ordering that Thomas remain in custody pending sentencing in September. "He might be absolutely convinced that he could as he stands here, but he won't."
Thomas, 51, pleaded guilty in May to stealing more than $375,000 in taxpayer money earmarked for the marina development along the Little Calumet River and using the cash to pay off personal debts and other expenses. He could face more than three years in prison.
After Thomas was arrested in April, Zagel initially allowed him to be released on home confinement while awaiting trial with strict orders to stay off the telephone and Internet. But within days, he was in trouble over allegations he had violated the bond restrictions by arranging a tryst with a woman who was a government witness and then asking his dentist to submit a fake note to try to cover his tracks.
Thomas pleaded guilty in May and agreed to go directly into custody at the Metropolitan Correctional Center. But in a five-page, self-penned memo to Zagel last month, Thomas wrote that if he is released on bail while awaiting sentencing he would "repair the structural integrity of the boat facility," including restoring electrical power, patching holes and hauling away debris. He also promised to "assure the safe return of all personal property and boats to their rightful owners."
Once the work is complete, Thomas said he would coordinate the transfer of the mortgage on the property from an investor so the government could assume ownership. To ensure he won't flee, Thomas offered to put up his family's Greektown condominium as collateral – a property he said is worth $1.1 million.
Thomas' attorneys, Lawrence Beaumont and Joseph Lopez, argued in court today that Riverdale officials had expressed an interest in having Thomas convey the deed to the marina to the Cook County Forest Preserve District, which would have the resources to clean it up and sell it for a higher return. They also described Thomas as a changed man who sincerely wanted to help correct his mistakes.
"His attitude has certainly changed (since his incarceration)," said Beaumont, who weeks ago argued in another court filing that Thomas was prone to mood swings and bizarre behavior and might suffer from manic depression.
Convicted of fraud a decade ago in New York, Thomas has a colorful history in Chicago that includes wearing a wire on a former business associate, Antoin "Tony" Rezko, who was convicted in the federal probe that felled imprisoned former Gov. Rod Blagojevich. His cooperation also helped lead to the conviction of former Chicago Ald. Isaac Carothers on charges he backed zoning changes for a West Side project in return for free work done on his home by a politically connected developer.
Federal prosecutors alleged that Thomas began scheming in the Riverdale deal just months after his probation for the New York conviction expired. Between November 2011 and December 2012, Thomas falsified construction costs in documents submitted to the village, concocting phony bills, including a nearly $9,000 one from a sewer installation company that didn't even exist, prosecutors said.
Village officials had hoped the marina property in the 13100 block of South Halsted Street would revitalize the struggling community, but instead it is awash in liens that have to be sorted out in court before it can be sold, Riverdale Mayor Lawrence Jackson told the Tribune earlier this year. Meanwhile, its value has plummeted because after it closed down, the marina and adjoining restaurant were gutted and stripped of light fixtures, flooring and other property, the mayor said.Copyright © 2015, The Baltimore Sun