SEC: Harvey mayor to pay $10K fine in investor 'scheme'

HARVEY, Ill. (AP) - The Securities and Exchange Commission says a suburban Chicago mayor has agreed to pay a fine for his role in allegedly scheming investors into lending the community millions for a development deal that helped an aide.

The Chicago Tribune reported Thursday (http://trib.in/1XnapUn ) that Harvey Mayor Eric Kellogg agreed to pay $10,000 in what the SEC describes in court filings as a "scheme."

Kellogg allegedly claimed an old hotel was going to be redeveloped with money borrowed from 2008 to 2010. However, the hotel wasn't finished and cash was diverted to make city payroll and help a then-aide make $800,000.

Kellogg is barred from participating in the issuance of municipal bonds as part of the settlement, which awaits a judge's approval.

The mayor's spokesman says the matter is behind Kellogg and he's ready to move forward.

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Information from: Chicago Tribune, http://www.chicagotribune.com