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Thursday, October 28, 2010

NY Lawyers Arrange "Justice" for Chicago $250 Million Ponzi Scam

Committee on Public Integrity
Tel: 202-374-3680
Fax: 202-207-9548
email: CommitteeOnPublicIntegrity@gmail.com
Web: www.CommitteeOnPublicIntegrity.com



PRESS RELEASE
For Immediate Release


U.S. Senate Candidate Involved in $250 Million Ponzi Scheme

The Committee on Public Integrity, in a joint investigation withIntegrity in the Courts Finds that Alexi Giannoulias, U. S. Senate Candidate in Illinois, Failed to Reveal That His Family’s Broadway Bank Paid Kick Backs in Mortgage Fraud Deals with Financial Ponzi Scheme Operators

The Senate Candidate Also Failed to Reveal that the Giannoulias Family Bank Paid a Settlement Valued at $6 Million to End the Lawsuit by U.S. Department of Justice and Securities and Exchange Commission

As part of its continuing full disclosure by federal candidates program, The Committee on Public Integrity and Integrity in the Courts has discovered that Alexi Giannoulias, Democratic candidate for US Senate from Illinois has misrepresented the record of Broadway Bank, the Chicago bank owned by his family. The actual facts as revealed in litigation brought by the US Justice Department and the Securities and Exchange Commission reveal that Broadway Bank engaged in fraudulent loans with Wextrust, a finance company. Broadway Bank was subsequently seized by the SEC, and the chief officers of Wextrust are in jail.

During the last debate with Congressman Mark Kirk, Alexi Giannoulias was asked to comment on the activities of Broadway Bank, the main business asset of his family. Giannoulias said, “And let’s be clear, no one has ever suggested that the bank has ever done anything illegal, illicit, or improper. Never." He continued, "I will always tell you the truth. And that's what we need now more than ever. People are sick and tired of Washington, D.C. politics as usual." Information is now coming to light that shows that Broadway Bank engaged in kick-backs and other lucrative deals with Ponzi scheme operators, who are now in jail.

Beginning in 2006, when Alexi Giannoulias was a loan officer at Broadway, the bank entered into a series of commercial loans in joint ventures with Wextrust Capital, a Chicago based lending company. Wextrust provided so-called “hard money” loans to developers, who could not find standard financing from banks. Hard money loans are provided at very high interest rates, up to 18-20% when the costs of so-called origination and finders fees are added.

Under the deals between Wextrust and Broadway Bank, evidence has been discovered showing that borrowers paid the bank high interest charges (12-14%), and then Broadway Bank kicked back 2-3% of the payments received to Broadway as part of a so-called loan servicing contract. Also, it’s been established that throughout its years of operation, Wextrust was insolvent, making all of its mortgage deals void and fraudulent. That meant that all the joint mortgage deals marketed byBroadway Bank and Wextrust were illegal, illicit and improper.

Wextrust was seized and placed in control of a federal receiver by the US Securities and Exchange Commission in August 2008 for operating a $250 MM Ponzi scheme. The SEC found that Wextrust operated a massive Ponzi-type scheme from 2004 that raised approximately $255 million from approximately 1,200 investors in the US and other countries. The Receiver confirmed that Wextrust diverted, co-mingled and misappropriated those funds, in a series of unauthorized transactions. The US Department of Justice filed criminal complaints against Wextrust's principal officers who were immediately arrested, and who remain in custody. The company president, Steven Byers, entered a guilty plea in April 2010, and is awaiting sentencing.

Broadway Bank was a partner with Wextrust in the series of fraudulent loans. Alexi Giannoulias was a loan officer when Wextrust began its dealings with Broadway Bank. Evidence has been uncovered by the SEC showing that Alexi’s brother, Demetri, personally handled these mortgage loans with Wextrust.

In April 2010, just before being seized by the Illinois and US banking authorities, Broadway Bankagreed to forgo $5 million in claims and to pay up to $800,000 in cash to settle litigation with the federal Receiver of Wextrust. This Settlement clearly reflected a payment by Broadway Bank to settle claims by the Securities and Exchange Commission and avoid liability for illegal actions in connection with its financing transactions with Wextrust.

For additional information please contact: John T. Whitely at 202-374-3680

About The Committee on Public Integrity
The Committee On Public Integrity reviews both past and present cases to provide an independent assessment and analysis of the facts. With respect to past cases, the committee will hear from persons who maintain that they have been treated unfairly and unjustly. As part of its efforts, the committee is actively seeking documentation and analysis of various issues. Committee members include individuals who through their personal and professional lives have established a reputation of responsibility and fairness.

For Detailed Information to Referenced Documentation, See Below:

NY Lawyers Arrange "Justice" for Chicago Ponzi Scheme

The $250 Million Ponzi Scheme "Settlement"

Transcript of April 2010 Guilty Plea

August 2010 - 7th Interim Report of Receiver

Response to Objections to the Receiver's Report

Civil Lawsuit: SEC v Byer, et al.

52 comments:

Person Proud New York is #1 in Corruption said...

Corrupt Chicago thugs WISH they had one-half of the corrupt tricks and basket full of legal dirty moves that New Yorkers have and are known for throughout the world.

Where else would a bunch of crooked bankers from corrupt Chicago go but to a connected New York law firm.

And this guy Gianbankcrookolious wants to be a U.S. Senator ?!!!??.... I can't stop laughing.

Former Supporter of Schummer said...

Where's Chuckie Schummer on all this.
Schummer protected Bernie Madoff.
Schummer had his thugs inside the SEC.
The SEC protected Madoff.
The SEC protected Giannoulias.
And the citizens lose billions.

Thanks Chuck. Nice Job, you corrupt "for-sale" bum.

Wait until I see you in hell, I tell you to your face how corrupt you are, but wait, you already now that.

Anonymous said...

If Illinois votes this guy in, they're crazy.
They gotta stop sucking in that Chicago wind.

Anonymous said...

Dear Senate Hopeful Giannopolois,

You got ripped off. If you went to the Proskauer lawfirm in New York, you wouldn't have had to pay anything. You probably would have gotten your 5million back. Lesson learned, I guess.

Anonymous said...

Clearly, Kirk has an opening here to exploit. Giannoulias has been covering for his family bank throughout this election. Now, some key evidence has surfaced. It's time for Kirk to show Illinois voters that they can't trust wheeler/dealer Giannoulias.

Anonymous said...

Um, just thinking out loud... I wonder if "GOD", "Mr. Untouchable" Allen Isaac, is involved with any of these bums!!

Anonymous said...

NEW YORK IS SOOOO CORRUPT... THE CORRUPT THUGS ARE LAUGHING ALL THE WAY TO THE BANK...THIS IS REALLY SAD!!!!!!!

Anonymous said...

Hey Chucky, Do you what they're talking about?

Oh wait, let's see let's ask Allen Isaac what they're talking about!!!

Anonymous said...

OMG...this story is HUGE!!! I can't wait to see how this one unfolds!!!!!!!!!!!!!!!!!!!!!!!

JAIL, JAIL, JAIL...I hope they all join BERNIE!!!

BTW, I wonder who was really behind the BERNIE MADOFF Ponzi scheme? Does anyone what to take a guess?

disgusted said...

New Yorkers should be quite proud that their OFFICERS OF THE COURT (Read: lawyers) (Read: corrupt bastards) can buy judges, buy rulings, buy coverups for 1/4 Billion dollar scams that just in this case screwed 1200 folks!!!!! Unbelieveable.

New York OFFICERS OF THE COURT include:

Charles Schumer
All NYC Judges
All NY Federal Judges

Is this guy Giannoulias a lawyer? If he doesn't win, he should come to New York and become a lawyer here! He's perfect!

Anonymous said...

NEW YORK LAWYERS, FEDERAL AND STATE JUDGES, AND LET'S NOT FORGET NY POLITICIANS.. HAVE SOLD THEIR SOULS TO THE DEVIL...

PLEASE HELP NY said...

MR.GIANNOULIAS...where are you? maybe you're the one that can make a difference here in NY!!

the editor said...

Not much "arranging" in NYC.
Change the title to NY LAWYERS BUY JUSTICE...
This is NY, we BUY things hear. And that includes judicial decisions.

broke and pissed said...

A vote for Alexi Giannoulias is a vote for Bernie Madoff and his greedy friends, whether or not they're sitting in a prison cell.

Anonymous said...

How is Alexi even able to run- his bank has cost the taxpayers 400 million, and the family took out 80 million just before the crash...
Kirk did embellish, but he still has a stellar 21 year military record...
As the Tribune said last weekend- Alexi is a panderer to the unions and too juvenile to represent Illinois

Anonymous said...

We've finally reached the pinnacle of what it means to be a Democrat. And that is, "Screw you." You don't like what we're doing? Here's more of it. You vote against us? Here's how you're gonna pay for it. You don't like our legislative agenda? Here it is, rammed down your throat, and that's just for starters.... I'm not joking here folks; if the Democrats retain control of Congress, over the next 2 years there will be more than just hell to pay.

Anonymous said...

How can Alexi run a positive ad? He has nothing to say for himself. Can anyone list ONE reason why this crook deserves our votes?

CHITOWNLADY said...

CHITOWNLADY
God. I wish you BOTH WOULD JUST SHUT UP! I for one am so sick amd tired of you so called DO GOODERS doing nothing but SPEWING VENOM!~ One is axctually worse then the other! Alexi...GROW THE HEL* up! Your way too young and DUMB to even think your worth being a Senator of ANY STATE! You couln;d even handlke the job you already got! Who are you trying to kid! Get a pair of cajones anad stay away from banks and other peoples MONEY! Kirk.......Your so deep in BUSH'S stuipdness your NO BETTER! This has turned out to be one of the MOST WORST ELECTIONS I HAVE EVER SEEN IN ILLINOIS! Neither of your total morons are worth my vote PERIOD! You both make me sick! One of you morons get into office IT WILL NOT BE ON MY VOTE! This is the best Illinois has? I THINK NOT! You and the rest of you so called candiates are the reason I have decided to LEAVE ILLINOIS!

PBC122 said...

Now, you've got Alexi who played basketball, went to law school, never practices law, became a loan officer (VP is always entry level for family) for the family business, was blissfully unaware of the corrupt people they were doing business with (Rezko), sucked millions out of the bank only to stick the taxpayers with a $400M bill, lucked into the Treasurer's office on his buddy Barack's coattails (and Blago's) where he proceeded to lose millions of people's savings, and is getting out before the real damage he's done to the office is known.

ChiNow said...

"GIANNOULIAS ADMITS TO DIRTY TRICK WITH THIRD-PARTY CAMPAIGN IN IL" BY Ed Morrisey.

So President Obama.......was that the change we can believe in? Is this the candidate who's character you and Michelle think is good? Your moral compass is broken Mr. President.

windycity said...

GIANOULIAS ERASED MILLIONS OF BRIGHT STAR MONEY PARENTS PUT AWAY FOR THIER KIDS COLLEGE
At public four-year schools, many of them ravaged by state budget cuts and corruption, average in-state tuition and fees this fall rose 7.9 percent. Just when Americans need college the most, many are finding it increasingly difficult to afford," said Molly Corbett Broad, president of the American Council on Education.

rtrt6767 said...

Alexi reminds me of the spoiled liberal brats in the 60s who spit on our returning Vietnam heros and called them "baby killers".

MilUSone said...

I am sorry, but Alexi what war did you fight in? Oh, mob wars. Like when you say you support "families"... you mean like the Gambinos?

RRT3478 said...

Alexi is a complete disgrace and so is anyone so depraved, so corrupt and so hateful to support him. I am embarrassed for the dimocraps for even having him in this election.

US1st55 said...

ALEXI AND OBAMA DEMEAN AND ATTACK OUR BRAVE WHO SERVE AND THEIR FAMILIES.
A union worker in California, Duane Hammond has lost his job wearing a shirt and cap displaying the USS George H.W. Bush because his son is serving in the Navy on that ship. Hammond was working with a crew that was setting up a stage for President Obama's visit at the University of Southern California when he learned his apparel was causing a problem.

US1st55 said...

Alexi feels that only U.S. Military that have been "shot at" are brave and honorable. The rest of our Military, and WWII Veterans and Vietnam, Korean War, vets are wimps if they havn't been shot a

US1st55 said...

Alexi feels that only U.S. Military that have been "shot at" are brave and honorable. The rest of our Military, and WWII Veterans and Vietnam, Korean War, vets are wimps if they havn't been shot a

windycity said...

I find it very disappointing that Alexi Giannoulius will not explain his relationship with "Chicago Outfit" bookmakers!

If he becomes a Senator and Patrick Fitzgerald departs what "Chicago Outfit" lawyer will he recommend to be the next United States Attorney from the Northern District of Illinois?

gop10 said...

There once was a man named Alexi,
Whose resume was anything but sexy.
Granting loans to mob bosses,
Plus all those Bright Start losses,
Will keep his Senate bid in check, si?

Anonymous said...

What the hell is going on here????...who's really legit and who's really corrupt? my head is spinning with all this crazy filthy corruption..

Please, can somebody tell me what's really going on here!!

Chicago banker said...

The democrats and republicans are both filled with corrupt, sell-your-mother, corrupt people. But think... Who buys them? Yep, the banks. Follow the money and it leads to a BANK, and dirty BANKERS.

Former employee of broadway bank said...

As bad as Alexi is, you folks must meet the real bad apples at the former Broadway Bank. Everyone knew that bank to be the go-to bank. Every employee, who wasn't a family member, was afraid to ask questions. When I worked there, I saw more mobsters come and go than you could shake a stick at. Now I collect unemployment.

Anonymous said...

So a guy who should be in prison with his wacky family banker crooks, he might be a U.S. Senator next week. I love it.

Sick said...

Why did Madoff get all the press and this ponzi scam got almost none. For god's sake, 1200 people were screwed and the amount in question was two hundred and fifty million!?!?!? If I'm calculating this correctly, that's one quarter of a billion dollars! I don't get it. What the hell did our administration know?

Quietly Smiling said...

Watch, see, and learn how Integrity in the Courts collects friends in Washington, DC, then look out Shira, better duck...

little person said...

Giannoulias is one lucking guy. If he didn't know the president of the United States, he'd be looking at 15 years in prison. I guess that sucks for the rest of us little people.

T Finnan said...

Just small potatoes ($250 million). Look how $59 Billion dollars disappeared at HUD under Cuomo and how Cuomo halted any criminal probe because data was lost in a computer "glitch." Ask any accountant to just go and see who the US Treasury checks were made out to, regardless of a computer glitch at HUD. Think, was $59 billion divided among 100 friends of Cuomo/Clinton ($590 million each) and a few select members of Congress to keep the lid on?
See Cuomo's smoking gun in AEG scandal and more of Cuomo protected scams at CuomoTARP.blogspot.com . Instead of waiting for Schumer to investigate Madoff?, which others did he miss?, etc., or Eric Holder to find God, vote the bums, Schumer and Cuomo, out on Tuesday.

Anonymous said...

Throw all of the corrupt bums in jail.
They have bought and ruined our system of law.
They have bought and ruined our financial institutions.
They ALL belong in jail.

Anonymous said...

Speaking of the devil himself - Andy Cuomo - when are we going to read about his HUD FRAUD? Or has his FRIEND and protector Bill Clinton taken care of this matter? The media is silent, the fix is in! Don't we live in a great country!

Anonymous said...

Justice! there is no Justice on this earth....there is only the hell of the American Injustice System! The rats don't care about the average guy, they just see greed in their eyes!

Anonymous said...

and how to blame the other guy....
the Justice System is a big Ponzi Scheme in itself!

Anonymous said...

and how to blame the other guy....
the Justice System is a big Ponzi Scheme in itself!

Anonymous said...

How did our country get to where we are? One corruption scandal after another. Now I've come to realize that even our judges can be bought! This is all very sad.

Anonymous said...

The justice that these bastards deserve is to be hung by the neck until dead in a public form after a fair trial of course

Anonymous said...

That will be the day when NY Lawyers deliver any Judtice!

AfewGoodOnes said...

Some lawyers do great work..

Just look at the MERS Mortgage Fraud cases

and some of the good Judges involved come from New York..

Unfortunately when a bad Judge gets you into their Vortex, it's very difficult to get out...

termite inspector said...

To: 5:14 And where are the good judges in Appellate courts who don't protect the crooked judges? Go to the Federal 2nd circuit against a judge and then tell us which one is the good judge. To paraphrase Teddy Roosevelt, "In nine out of ten cases, he's better off dead and in the tenth case, don't ask too many questions."

Anonymous said...

U.S. Justice has been for sale for a VERY long time. Pretty disgusting.....

Anonymous said...

NY Lawyers can only 'arrange' one thing - THE FIX! And the Judge gets a cut!

Anonymous said...

lets arrange some street justice for these thugs

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