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Former Western Springs Bank Chair Regas Sentenced to Prison

James A. Regas has admitted to signing false documents concealing his personal interest in loans, defrauding the now-defunct Western Springs National of more than $650,000.

The 82-year-old former chairman of the failed Western Springs National Bank & Trust was sentenced Tuesday to 366 days in federal prison, in addition to the more than $680,000 in restitution and $60,000 in fines he has already paid, Crain’s Chicago Business reports.

James A. Regas, of Oak Brook, pled guilty in July 2012 to one count of conspiring to falsify information in regulatory documents. He admitted that between 2004 and 2009 he repeatedly referred business associates and financial partners to Western Springs National for loans while submitting statements to the bank falsely denying any conflict of interest.

These actions “enabled Regas to use bank funds for his own benefit without having to apply for loans himself, posting collateral, or signing any promises to repay the bank’s money, while evading federal restrictions on insider loans” and costing the bank more than $680,000, according to a U.S. Attorney’s Office press release at the time. 

The loans Regas benefitted from include a $803,000 loan to North Park Webster LLC in 2004 used to finance three Evanston properties in which the Regas family had a stake, and a $500,000 loan to an associate in 2005 from which Regas collected half the proceeds through a third party.

Regas confessed to ordering employees of Western Springs National to file fake reports with the Federal Deposit Insurance Corp. (FDIC) that concealed his personal interest, and to signing them knowing the information was false. The information was supposed to be disclosed to the bank’s board members and federal regulators.

The charge carried a maximum penalty of five years in prison and a $250,000 fine atop restitution.

Regas, also a banking attorney, is also a defendant in a pending 2011 lawsuit against former directors and officers at the Mutual Bank of Harvey, according to Crain’s. 

Western Springs National Bank & Trust was shut down by the FDIC in April 2011, and then taken over by Heartland Bank & Trust Co., who assumed the bank’s two locations and its deposits and assets. (The second location is in Countryside.)

The feud between the Regas and Moser families, who each owned half of the bank but lost all equity when it failed, came to a head in September of 2010. Eight months before the closure the Mosers sued, alleging that the Regas family was “treat[ing] the Bank’s assets as their own personal piggy bank.”

Regas will begin serving his sentence in 90 days, the Daily Herald reports.

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Erik Bloecks February 20, 2013 at 06:19 PM
Corruption is alive and well in the western suburbs...

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