Indictment alleges $45 million bilking of LaSalle Bank
The former head of LaSalle Bank security and a Wood Dale security firm owner have been indicted by federal authorities on allegations of bilking the bank out of $45 million.
U.S. Attorney Patrick Fitzgerald's office accuses Des Plaines resident George Konjuch, 54, of steering millions of dollars in work to Wood Dale-based Navarrete Industries Inc., doing business as Integrated Security Solutions and INS, while heading security for the Chicago-based bank.
In return, Bloomingdale resident and security firm owner Armando Navarrete, 45, paid Konjuch $400,000 in cash and various other benefits while overbilling LaSalle Bank and not doing work it was paid for, the 22-count indictment alleges.
Konjuch and his family got cash, two safes, a home security system installed, home landscaping, snow removal, Bowflex exercise equipment, travel expenses to Las Vegas and Puerto Rico, a $10,000 wedding present for his daughter, and attorney fees for his son, according to the indictment.
The fraud took place from 2001 until September 2006, according to the indictment.
Also in September of last year, LaSalle Bank filed a suit against Navarrete, INS and Konjuch alleging their involvement in a bribery and fraud conspiracy.
Because Navarrete is a native of Cuba and federal authorities are seeking steep penalties, Fitzgerald's office Wednesday successfully argued in court that Navarrete posed a flight risk.
Navarrete was arrested and later remanded into federal custody until his bond hearing on Friday.
The indictment seeks $45 million in restitution from Navarrete and INS, and $400,000 from Konjuch, and both their homes and business premises are being targeted for forfeiture.
Konjuch is expected to appear in court today, federal authorities said.
Trade publication Security Systems News wrote about INS in late 2005, saying INS had been in operation for 35 years and moved to Wood Dale in 2005. At the time, INS had 25,000 square feet of office space and employed 56 employees and 20 union electricians, an attorney for Navarrete told Security Systems News.
An unidentified employee answering phones at Navarrete Industries on Wednesday declined to comment.
Each count of bank fraud and bribery against Konjuch and Navarrete carries a maximum penalty of 30 years in prison and a $1 million fine.
Konjuch also faces tax fraud counts that carry maximum 3-year prison terms and $250,000 fines.
Other counts against Navarrete carry maximum penalties of 10 years and $250,000 fines.
Charges against INS carry a maximum penalty of five years' probation and a $1 million penalty, according to federal authorities.
A message left for Konjuch's attorney, Raymond Cisco, was not immediately returned.
A spokesman for Bank of America, the new parent company of LaSalle Bank, on Wednesday said only "the bank cooperated fully with authorities."