US finds closed Chicago bank involved in massive fraud

CHICAGO (AP) — A Chicago bank that federal regulators shut down last year had been involved in an $82.6 million fraud scheme.

An audit by the U.S. Treasury Department’s inspector general found officials at Washington Federal Bank for Savings issued residential and commercials loans that have never been repaid.

The Chicago Sun-Times reports the audit lays some of the blame for the bank’s fraudulent activities on federal regulators. The audit reports regulators treated Washington Federal “as a ‘training’ or ‘practice’ bank” for rookie examiners.

Bank president John F. Gembara was found dead Dec. 3 in the Park Ridge home of a bank customer who owed the bank about $1.8 million. Gembara was sitting in a chair with a rope around his neck. His death was ruled a suicide by the Cook County medical examiner’s office.

The bank’s failure is under investigation by the FBI and by the Federal Deposit Insurance Corp., which is trying to collect the unpaid loans.

25 News
Associated Press

Associated Press

More News
25 WEATHER TRACKER FORECAST
Havana
25°
Macomb
32°
Lincoln
26°
Lacon
28°
Bloomington
25°
Hang in There, Warmer Weather is on the Way

Hang in There, Warmer Weather is on the Way

Thanks to everybody for their weather pictures and snowfall totals!  Friday will be quiet then we have a chance of

Connect With 25 News
Top Stories

Limestone teacher accused of sexual harassment, lawsuit filed against school district

 UPDATE: Peoria County Sheriff Brian Asbell confirms his department will be handling the criminal case. An order of protection

The meaning of shopping local

With stores like Walmart and Target joining Amazon in free and fast shipping, getting your gifts with the click of

Salvation Army Kicks off Christmas Campaign

The salvation army has officially kicked-off its 2018 Christmas campaign. During the program  at Mineral Springs Park in Pekin today,

Biggest snow of season brings out the plows

Up to 4.5 inches of snow fell in some areas of central Illinois this morning. This marks the biggest snowfall

State, Federal lawmakers make push to reduce teen smoking

Lawmakers at the local, state and national levels are working in tandem to make lighting up more difficult for teens.

Scroll to top
Skip to content