Thursday, May 19, 2016

ILL-inois: Harvey mayor fined $10K for "fraudulent bond offerings"

Illinois' Blogger Laureate,
Marathon Pundit, in Harvey
Uh oh. Chicago's most corrupt suburb, Harvey, is back in the news. And that's a bad thing.

From the Chicago Sun-Times:
Harvey Mayor Eric J. Kellogg has agreed to pay a $10,000 fine and never again participate in a municipal bond offering to settle civil fraud charges stemming from a hotel development scheme.

"Through the 2008, 2009, and 2010 Bond Offerings, Harvey engaged in a scheme to divert bond proceeds for improper purposes," according to the complaint filed by the Securities Exchange Commission. "As part of the scheme, Harvey made misrepresentations and omissions to investors about how bond proceeds would be used and the risks associated with investments in Harvey's municipal bonds."

The purported purpose of the bond offerings was to provide funding to develop and construct a Holiday Inn Hotel, the SEC alleges. The bonds were to be repaid from tax revenue streams dependent upon the existence of the hotel, such as Harvey's hotel-motel tax and sales tax.

But instead of using the money raised through the bond offerings on the hotel project, city officials diverted at least $1.7 million in investors’ money into the city's general operation accounts, including payroll, the SEC said.
That's it? A fine?

Well, Harvey will be back in the news again soon, I guess. Why? Because it's Harvey.

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