Mutual Bank, Amrish Mahajan, Richard Barth, FDIC lawsuit, Kenneth J Conner whistleblower vindication, Obama Rezko land deal
“Why did Mutual Bank fire whistleblower Kenneth J Connor after he
challenged the appraisal on the land purchased by Rita Rezko, just
prior to the land sale to Obama?”…Citizen Wells
It looks like whistleblower Kenneth J. Conner is being vindicated. Conner was fired after revealing that the appraisal for the lot in the Obama Rezko lot deal was too high.
From the Chicago Tribune October 31, 2011.
“Officers and directors of Mutual Bank issued $10.5 million in
“imprudent” dividends, spent $250,000 of the bank’s money on a
wedding, and paid $495,000 in defense costs for a spouse’s Medicaid
fraud case before the Harvey-based lender failed in July 2009, a
federal regulator alleged last week.
Mutual was the bank that financed the purchase by the wife of
political fundraiser Tony Rezko of a side lot in a deal that enabled
Barack Obama to buy his dream house.
In a lawsuit filed in a U.S. District Court in the Northern District
of Illinois last week, the Federal Deposit Insurance Corp. also
accused the bank of spending $300,000 to hold a board meeting in Monte
Carlo, Monaco.
The FDIC is suing eight former directors, two officers and the bank’s lawyer.
The failure of the $1.7 billion-asset bank, which had 10 branches in
the Chicago area, is expected to cost the FDIC $775 million. From 2005
to 2009, the lender had nearly doubled in size, fueled by what would
turn out to be bad real estate loans, many of which were made to about
15 borrowers. Record-keeping was shoddy, and loan terms were changed
at closing with no board approval, the suit said. Mutual had become a
“lender of last resort for failed real estate projects,” particularly
in the hotel industry, the suit said.
One of the defendants, former bank president and board member Amrish
Mahajan, couldn’t be reached for comment.”
http://www.chicagotribune.com/business/ct-biz-1031-bank-suit-20111031,0,3469830.story
From the lawsuit:
“5. Collectively, the Director Defendants and Officer Defendants (“Director and Officer Defendants”) (a) recklessly implemented a strategy of rapid asset growth through approving a high concentration of risky CRE, ADC and out-of-area loans to a small concentration of high-volume borrowers; (b) failed to implement appropriate underwriting and credit administration practices; (c) ignored the Bank’s loan policies; (d) ignored federal lending regulations; and (e) disregarded warnings from the Bank’s regulators regarding the Bank’s lending activities.”
http://www.courthousenews.com/2011/10/26/FDIC.pdf
The name Mahajan may ring a bell. Richard Barth may not. This should help.
From Citizen WElls August 22, 2011.
“A former state contractor with close ties to ex-Gov. Rod Blagojevich
plans to enter a guilty plea Monday, more than four years after she
was charged with bilking the state out of $2 million for drug tests
that were never performed, said a source with knowledge of the case.
Anita Mahajan, the wife of a major Blagojevich fundraiser, was charged
in May 2007 with theft and fraud, based on allegations that her
company, K.K. Bio-Science, submitted bogus bills for drug screenings
for clients of the Illinois Department of Children and Family
Services.
Elections Prosecutors also accused Mahajan of laundering money taken
from the alleged fraud and using it to buy properties in Chicago and
New York.”
“Mahajan is the wife of Amrish Mahajan, a former head of the defunct
Mutual Bank of Harvey who was called “Uncle Amrish” by Blagojevich’s
children. He held events for Blagojevich and raised at least $500,000
for the former governor’s campaigns. The Mahajans also hired Patricia
Blagojevich for several real estate deals that netted the former first
lady more than $113,000 in commissions.”
“Kenneth J Conner whistleblower lawsuit”
“9. In June, 2005, Mutual Bank President and CEO Amrish Mahajan and
other Mutual Bank officers approved a loan to Rita Malki Rezko (Rita
Rezko) which was guaranteed by Antonin Rezko so that Rita Rezko could
purchase a 9,090 square foot vacant parcel of real estate at 5050 S.
Greenwood Avenue, Chicago. As part of the Mutual Bank loan
underwriting process, Mutual Bank obtained a real estate appraisal
from Adams Valuation Corporation (Adams Appraisal) which purported to
provide an opinion of value of the subject 5050 S. Greenwood real
estate (the collateral for the Rezko loan) at $ 68.76 per square foot.
A copy of the Adams Appraisal is attached as Exhibit C. In June, 2005,
Rita Rezko closed on the purchase of the 5050 S. Greenwood property at
a purchase price of $ 625,000.00 along with the loan from Mutual Bank
in the amount of $ 500,000.00 with Mutual bank obtaining a first
mortgage lien position on the Greenwood vacant parcel.”
“10. On or about January 4, 2006, Rita Rezko entered into an
agreement with Senator Barack and Michelle Obama (Obamas) to sell a
ten-foot strip of the 5050 S. Greenwood property to the Obamas. A copy
of the Obama/Rita Rezko contract is attached as Exhibit D. As a result
of that transaction, the Rezkos requested that Mutual Bank release
it’s first collateral position to the ten-foot strip parcel
transferred to the Obamas. In that same general time frame, Richard
Barth, Mutual Bank Senior VP of construction lending and James Murphy,
Mutual Bank Senior VP Internal Auditor/Risk Manager, requested that
Conner perform an appraisal review of the Adams Appraisal attached
hereto as Exhibit C.”
“11. In late 2005 or early 2006, Conner performed an appraisal review
of the Adams Appraisal (Exhibit C) per the directive of Richard Barth
and James Murphy. Conner prepared a written Appraisal Review report
(ARR) opining that the Adams Appraisal overvalued the Greenwood lot by
a minimum of $ 125,000.00 and that a reasonable and fair valuation for
Mutual Banks’s underwriting purposes should be no greater than $
500,000.00 for the entire 5050 S. Greenwood parcel as originally
purchased by Rita Rezko. In that same general time frame an appraisal
was performed for the 5050 S. Greenwood property by Howard B. Richter,
MAI which valued the 5050 S. Greenwood property at $ 54.00 per square
foot but then discounted the ten-foot strip being transferred by Rita
Rezko to the Obamas by fifty percent, as the ten-foot strip was
unbuildable standing alone…The valuation by the Richter Appraisal for
the 5050 S. Greenwood lot was substantially to Conner’s ARR
valuation.”
“12. Conner notified Richard Barth and James Murphy orally of his ARR
findings and Conner’s ARR was filed in the “Rezko 5050 Greenwood” loan
file at Mutual Bank.”
“13. In addition to Conner’s ARR stating that the Adams Appraisal
overvalued the 5050 S. Greenwood property, Conner had reported on
other occasions that Adams Valuation Corporation had overvalued real
estate subject to Mutual Bank loan underwriting valuation.”
“14. On or about October 19, 2006, Mutual Bank received a Grand Jury
Subpoena (GJS) requiring Mutual Bank to produce the Rezko 5050
Greenwood loan file, as well as a Rita Rezko Riverside District
Development LLC checking account and loan file. Electronic mail
(email) communications about the subpoena were circulated to Mutual
Bank officers and attorneys, including Amrish Mahajan, James Murphy
and Conner. A copy of an October 19, 2006 email string pertaining to
the Rezko GJS is attached as Exhibit F. On information and belief,
Conner’s ARR was removed from the Rezko 5050 Greenwood loan file prior
to the submission of that file pursuant to the GJS, and in it’s place
Mutual bank submitted an appraisal checklist which was purportedly
dated “06/15/05″ from Senior VP James P. Murphy (Murphy Checklist). A
copy of the Murphy Checklist is attached as Exhibit G.”
“16. In 2007, Conner observed that his ARR of the 5050 S. Greenwood
property was not in the Rezko 5050 Greenwood loan file and in it’s
place was the Murphy Checklist purportedly dated “06/15/2005.”…On June
18, 2007, Conner sent an email to James Murphy which provides, in
part, “I spent time trying to track down work of mine that should be
in a particular high profile loan file, though it is not–having been
replaced by a checklist.””
“17. In October, 2007, Conner had various communications with Mutual
Bank’s Human Resources Department representative, Lana Schlabach. In
an email communication of October 15, 2007, Conner directly referenced
“Resentment over my mentioned discovery of the removal/replacement of
an appraisal review that I conducted. That appraisal review contained
substantial observations and suggestions. The transaction and parties
involved were high profile in the media.I am under the impression that
the FBI has since looked at the file.””
“18. On October 23, 2007, eight days after Conner’s October 15, 2007
email to Schlabach attached as Exhibit J, Mutual Bank terminated
Conner’s employment for pretextual reasons.”
https://citizenwells.wordpress.com/2011/08/22/anita-mahajan-pleads-guilty-blagojevich-and-obama-ties-mutual-bank-president-amrish-mahajan-wife-rezko-obama-land-purchase/
From the Washington Times November 4, 2008.
“A former Illinois real estate specialist says FBI agents have questioned him about a Chicago property that had been bought by convicted felon Tony Rezko’s wife and later sold to the couple’s next-door neighbor, Sen. Barack Obama.
The real estate specialist, Kenneth J. Conner, said bank officials replaced an appraisal review he prepared on the property and FBI agents were investigating in late 2007 whether the Rezko-Obama deal was proper.
“Agents and I talked about payoff, bribe, kickback for a long time, though it took them only a short number of minutes of talking with me while looking at the appraisal to acknowledge what they already seemed to know: The Rezko lot was grossly overvalued,” Mr. Conner told The Washington Times Monday.
“Rezko paid the asking price on the same day Obama paid $300,000 less than the asking price to the same seller for his adjacent mansion,” he said. “This begs the question of payoff, bribe, kickback.””
http://www.washingtontimes.com/news/2008/nov/04/fbi-asked-questions-on-rezko-land-deal/
There is one more event which must take place to vindicate Kenneth J. Conner. That is the indictment and arrest of Barack Obama.
Citizen WElls 