Palatine woman indicted on federal fraud charges

A Palatine woman is one of two executives with a Chicago real estate development company indicted Thursday on fraud charges, federal prosecutors announced.

Caroline Walters, 53, of Palatine, and Laurance H. Freed, 51, of Chicago, each are charged with seven counts of bank fraud, one count of mail fraud, and five counts of making false statements to banks in a 14-count indictment released Thursday.

Prosecutors say Freed and Walters lied to officials from the city of Chicago, Cole Taylor Bank and a consortium of banks in order to secure credit extensions and payments at a time when their Chicago-based company, Joseph Freed and Associates LLC, was struggling financially.

Laurance Freed is the company's president and Walters is the vice president/treasurer, according to federal authorities. The firm is best known for its role in the development of Block 37 in downtown Chicago.

A company spokesman declined to comment Thursday.

The federal indictment says that Freed and Walters made false statements between March 2008 and February 2011:

Ÿ to the bank consortium, to prevent default on a $105 million line of credit and to obtain a loan modification that would have provided the firm with at least $10 million in additional funds;

Ÿ to Cole Taylor Bank, regarding the defendants' intent to persuade the bank consortium to release its claim on Tax Increment Financing notes as collateral; and

Ÿ to the city of Chicago, to obtain nearly $1.75 million in payments from the TIF notes, knowing that the bank consortium and Cole Taylor were entitled to those payments.

The indictment seeks forfeiture of $2,995,295 in alleged fraud proceeds from both defendants. If convicted, Freed and Walters could face a maximum of 30 years in prison and a $1 million fine on each count.

They will be arraigned at a later date in U.S. District Court.

Ÿ The Associated Press contributed to this story