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updated: 10/14/2010 6:38 PM

Libertyville man gets 5 years in prison for $9 million scam

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  • Forrest David Laidley

      Forrest David Laidley

 
 

Forrest David Laidley was a prominent real-estate attorney who worked for the Archdiocese of Chicago, served on the board of a publicly traded company and built an upscale Lincolnshire mall.

Now, the former Yale University football player is headed to a federal prison for five years for fleecing investors and financial institutions. Laidley was sentenced Thursday by U.S. District Judge Blanche Manning.

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Laidley, 66, of Libertyville, entered a blind guilty plea in February to one count each of mail and bank fraud.

Prosecutors accused Laidley of fraudulently obtaining more than $9 million.

Before he was sentenced, Laidley apologized to any investors he harmed, but added he didn't set out to commit fraud. Laidley said he was worth more than $22 million in 2000, but the Sept. 11 terrorist attacks a year later led to financial problems that stalled his planned office and retail projects in Round Lake, Lincolnshire and Glenview.

"Now I must pay for what I have done and what I have failed to do, said Laidley, who had about 50 supporters in the courtroom.

He is free on bond but was ordered to surrender to federal authorities Jan. 14. The judge rejected his request for a community service sentence.

Assistant U.S. Attorney Edward Kohler, who prosecuted the case with Shoshana Gillers, said Laidley sold limited partnerships and short-term, high-interest promissory notes, sometimes called bridge loans, to at least 100 investors from 1999 to 2004. Kohler said Laidley never told new investors he was defaulting on his promised payments to others.

"What the defendant did was totally inexcusable, Kohler said at the sentencing in U.S. District Court in Chicago.

Prosecutors said Laidley, individually and through his Forrest Properties Inc., offered returns of 10 percent to 40 percent to investors who provided him with cash toward purported retail and office projects in Round Lake, Lincolnshire and Glenview.

Laidley made "Ponzi-type payments to investors who ranged from corporate executives to law firm clients, according to prosecutors. Court documents state he used the $9 million-plus for personal expenses and unrelated real-estate projects.

Defense attorney John Theis contended the money Laidley gained from investors was closer to $2 million, and that he tried valiantly to keep the projects going to make the promised payments.

Theis also said some investors who lost money were in the courtroom gallery to support Laidley.

Some victims said they were willing to invest with Laidley because of his resume and track record of building Lincolnshire's upscale Village Green plaza at Route 22 and Milwaukee Avenue.

Investor Robert McDonald of Libertyville said he and others were aware Laidley handled real-estate transactions for the Archdiocese of Chicago from 1988 to 1996. McDonald said Laidley mentioned that work.

Most Rev. Jerome E. Listecki, archbishop of Milwaukee, was among those to write a letter to the court supporting Laidley. Theis said the letter from the Archdiocese of Milwaukee leader stated Laidley always has been willing to help the needy.

Documents filed by prosecutors show Laidley obtained $4.6 million from investors in Glenview's Glen Gateway Shoppes. Prosecutors said Laidley sold the Glen Gateway partnership without the investors' knowledge and used the money for unrelated projects and personal expenses, including $17,000 on a Wisconsin summer home mortgage.

Kohler said Laidley misled investors into believing he provided them with an interest in a site near Route 60 and Bacon Road in Round Lake that was pegged for a retail project. Kohler said McDonald and others were unaware Laidley didn't own the land.

McDonald said before the sentencing hearing it's not a coincidence federal prosecutors stated Laidley stopped raising money for projects in 2004. That's when the Daily Herald began a series of articles on civil lawsuits filed over Laidley's investment opportunities five years before he was indicted by a federal grand jury.

"I absolutely believe (the Daily Herald) thwarted that guy, McDonald said.

About 20 suits were filed in Lake, Cook and DuPage counties from 1999 to 2004, contending Laidley wasn't returning millions invested with him. In interviews at the time, Laidley said he had a plan to pay everyone and he reiterated that intention at the sentencing hearing.

Laidley served on the board of directors of publicly traded Vasco Data Security International Inc. in Oakbrook Terrace, Libertyville's Harris Bank branch and Carmel Catholic High School in Mundelein.

He graduated from Yale University, where he played linebacker on the football team and belonged to the prestigious Class of 1966 Skull and Bones Society that included Democratic U.S. Sen John Kerry.

Restitution that would be part of Laidley's sentence is to be determined.

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