10 years for each DuPage woman in mortgage scam

After Lawrence Grezlik received a federal grant to make his McHenry home wheelchair-accessible, the disabled Vietnam veteran decided to put the remaining funds — about $6,000 — toward his mortgage.

But instead of paying down the principal as Grezlik wanted, PLM Title Co. simply kept the money — a crime the 72-year-old said hurt not only his credit rating but his hopes of “making my remaining years a little bit more comfortable.”

Grezlik made sure to be in a DuPage County courtroom Monday as the women responsible for his loss, Pamela Williams and Patricia Johnson, each were sentenced to 10-year prison terms for a series of financial crimes.

Prosecutors said he was just one of 26 victims across the Chicago area and northern Indiana who lost a collective $6.2 million to a scam that Williams and Johnson ran at PLM Title Co. for about six years.

“You should be ashamed of yourselves,” Judge John Kinsella told the defendants, calling their crimes “coldhearted and selfish” as he handed down the sentence.

Williams, 58, of Darien, and Johnson, 57, of Naperville, pleaded guilty in April to 10 counts each of felony theft stemming from their time at PLM, where Williams was owner and president, and Johnson ran escrow accounts as a silent partner.

The Wheaton-based company, which also had offices in McHenry and other locations, came under investigation in 2008 after police began hearing from swindled homeowners, some of whom lost hundreds of thousands of dollars.

Wheaton police detective David Zdan testified the two-year investigation uncovered an elaborate “float” scheme where the defendants used incoming money for business and personal expenses, then covered up the discrepancies with money that came in from subsequent transactions, similar to a Ponzi scheme.

In many cases, homeowners went through the process of refinancing their homes only to find out their original lender was never paid, leaving them with two mortgages.

“I was hysterical. I didn't know what to do,” said Christine Michaud, 57, of Carol Stream, who lost $202,000 in a refinancing plan. “Our credit is destroyed. I'm fighting to keep my home. It's like my whole life is in limbo.”

Zdan said records and computers seized from the title company's offices, as well as a room at a Downers Grove beauty shop owned by one of the defendant's friends, showed Williams and Johnson conspired to perpetuate the scheme, even discussing plans to “cook the books” in one email police recovered. At one point, they also forced an employee to create fraudulent escrow records to stave off auditors, he said.

Company records also showed that while homeowners were scammed, Williams and Johnson used pilfered funds to pay their own credit card bills, buy Chicago Bears season tickets, throw parties and attend golf outings.

Authorities said each defendant averaged monthly expenses of $13,000 to $14,000, some of which was used to landscape Johnson's yard and pay for her daughter's wedding reception at a Wood Dale golf club. Other funds were spent on custom kitchen cabinets at a trailer the defendants shared in Indiana.

Zdan said the scheme began to fall apart when the housing market crashed, and PLM's regular income decreased dramatically.

“Essentially, their float sunk,” he said.

Assistant State's Attorneys Diane Michalak and William Wu sought 11-year sentences for the defendants, which was the maximum under a plea agreement with prosecutors. But Williams' and Johnson's attorneys argued their clients were struggling to keep the title company afloat and saw few personal benefits from the thefts.

“It was always my intention to make up the deficiencies,” Johnson told the judge. “We were trying to turn the business around. If I could right the wrongs that were done, I would. I can't even begin to tell you how remorseful I am.”

In handing down the sentences, Kinsella chastised the women for their “selfish behavior” and told them they deserved to go to prison. He noted that dozens of honest homeowners continue to struggle in the wake of the defendants' crimes.

“They (the defendants) didn't have to keep the business alive,” he said. “They should have done what common sense and courtesy told them they should have done. As the years went by, this was a bubble waiting to burst.”

By law, Williams and Johnson, who had no prior criminal convictions, must each serve at least five years of their sentences. They also agreed to pay $1.8 million in restitution. Prosecutors said the remaining money has been returned through banks and insurance.

Grezlik, the veteran, said he's still trying to forgive Williams and Johnson but he would rather get his money back than see them go to prison.

“They weren't aware of who they were hurting,” he said. “But they did it.”