WBEZ | FBI http://www.wbez.org/tags/fbi Latest from WBEZ Chicago Public Radio en Illinois Rep. Derrick Smith convicted of bribery http://www.wbez.org/news/illinois-rep-derrick-smith-convicted-bribery-110313 <img typeof="foaf:Image" src="http://llnw.wbez.org/main-images/AP362609502394.jpg" alt="" /><p><p>A federal jury in Chicago on Tuesday convicted Illinois state Rep. Derrick Smith of bribery for taking $7,000 from a purported day care operator seeking a state grant.</p><p>In a weeklong trial, prosecutors played secret recordings of the 50-year-old Chicago Democrat accepting 70 $100 bills in exchange for a letter supporting the $50,000 state grant &mdash; though it was all part of an FBI sting.</p><p>Jurors returned their verdict after deliberating about four hours over two days. Smith showed no emotion as he learned his fate, sitting with his hands folded. A family member patted him on the shoulder minutes later.</p><p>Outside court, a subdued Smith told reporters: &quot;We gave it a good fight. God knows the truth. Jurors didn&#39;t see what God saw.&quot;</p><p>No sentencing date was set, but a status hearing was set for Sept. 23. Smith was released pending a sentencing date.</p><p>The recordings of Smith by a campaign worker-turned-informant included one where Smith uses slang talking about the handover of the bribe, asking, &quot;How she going to get the cheddar to us?&quot; In another he says, &quot;I don&#39;t want no trace of it.&quot;</p><p>Prosecutors also described how a distraught Smith admitted after his March 13, 2012, arrest he took the bribe. He even brought agents to his bedroom, retrieved $2,500 in leftover bribe cash from the foot of his bed and handed it over.</p><p>Shortly after Smith&#39;s arrest, his House colleagues voted 100-6 to expel him. But he was reinstated after winning his late-2012 election. He lost his 2014 primary and was supposed to finish out his current term. However, a felony conviction means he will lose his seat.</p><p>Jurors found Smith guilty on all charges &mdash; one count of bribery and one of attempted extortion. Combined, the convictions carry a maximum 30-year prison sentence.</p><p>At trial, the defense attacked the credibility of the informant, who was only referred to by his first name, Pete, in court. They described him as a deadbeat and convicted felon who &quot;set up&quot; Smith for $1,000-a-week payments from the FBI.</p><p>&quot;He&#39;s a hustler,&quot; defense attorney Victor Henderson told jurors during closing arguments Monday. &quot;He hustled the representative and he hustled the FBI.&quot;</p><p>The attorney argued that Pete hoodwinked a devoted public servant together with an overzealous FBI.</p><p>&quot;He wasn&#39;t going to commit a crime,&quot; Henderson said, pointing to Smith. &quot;That was something they fabricated.&quot;</p><p>But prosecutor Marsha McClellan said in her closing that the recordings and other evidence demonstrated that no one led Smith astray against his will.</p><p>&quot;There sits a defendant whose public face is one of service, but who privately wanted to use that office ... to get cash into his pockets,&quot; she said.</p><p>In a recording from early March 2012, Pete counts aloud as he hands the cash to Smith in seven $1,000 stacks. As the informant counts the fifth stack, he curses as the money sticks together. He pauses, then counts the rest.</p><p>Pete then jokingly chides Smith for not expressing gratitude, saying, &quot;(You) didn&#39;t even say thank you.&quot;</p><p>The prosecutor said that Smith&#39;s easy, confident tone on the recordings illustrated he didn&#39;t think he&#39;d ever get caught.</p><p>&quot;Never in a million years did he expect us to listen to him now,&quot; McClellan told jurors. &quot;He never thought this day would come.&quot;</p></p> Tue, 10 Jun 2014 11:56:00 -0500 http://www.wbez.org/news/illinois-rep-derrick-smith-convicted-bribery-110313 Convicted mobster Frank Calabrese dies in federal prison http://www.wbez.org/news/convicted-mobster-frank-calabrese-dies-federal-prison-104570 <p><iframe width="100%" height="166" scrolling="no" frameborder="no" src="https://w.soundcloud.com/player/?url=http%3A%2F%2Fapi.soundcloud.com%2Ftracks%2F72764836"></iframe> <p>Chicago mobster Frank Calabrese Sr., a hit man who strangled victims and then slashed their throats to be sure they were dead, has died in a federal prison in North Carolina, authorities said.</p><p>Calabrese, 75, died Tuesday at the Butner Federal Medical Center, said Ed Ross, a spokesman for the Federal Bureau of Prisons. Ross had no information on the cause of death, though Calabrese claimed at his sentencing in 2009 that he suffered from a host of ailments, including an enlarged heart.</p><p>&quot;It&#39;s very emotional right now because there were two sides to my dad, and I miss the good side,&quot; Calabrese&#39;s son Frank Calabrese Jr. told the Chicago Sun-Times. He had helped put his father behind bars by secretly recording him boasting about mob killings.</p><p>Calabrese was among five men convicted in September 2007 at the Family Secrets trial, which resulted from a major, multiyear effort by the federal government to weaken the Chicago Outfit, as the city&#39;s organized crime family calls itself.</p><p>The investigation also was aimed at clearing 18 unsolved mob murders dating back to the early 1970s. Calabrese was blamed for many of them and sentenced to life in prison.</p><p>It was Chicago&#39;s biggest underworld trial in decades and it produced sensational testimony, including a description from his brother of how Calabrese preferred to strangle victims with a rope and then slash their throats to make sure they were dead.</p><p>None of the defendants in the Family Secrets trial was charged with murder. They were convicted of racketeering, but the jury held Calabrese and two others responsible for various killings designed to silence witnesses and mete out mob vengeance.</p><p>Calabrese laughed during some of the trial&#39;s most grisly testimony.</p><p>Family members say Calabrese inflicted violence on them as well, with one son, Kurt, recalling during Calabrese&#39;s sentencing that his &quot;father was never a father &mdash; he acted as an enforcer to me,&quot; threatening to &quot;bite your nose off&quot; and make him &quot;disappear.&quot;</p><p>Frank Calabrese Jr. told the Sun-Times on Wednesday that that violent history made his father&#39;s death especially emotional.</p><p>&quot;I believe he was taken on Christmas Day for a reason,&quot; he said. &quot;I hope he made peace. I hope he&#39;s up above looking down on us. ... He&#39;s not suffering anymore. The people on the street aren&#39;t suffering anymore.&quot;</p></p> Wed, 26 Dec 2012 13:40:00 -0600 http://www.wbez.org/news/convicted-mobster-frank-calabrese-dies-federal-prison-104570 Immigration enforcement program faces novel suit http://www.wbez.org/news/immigration-enforcement-program-faces-novel-suit-100646 <p><p><img alt="" class="image-original_image" src="http://www.wbez.org/system/files/styles/original_image/llo/insert-images/ColoradoFingerprinting.jpg" style="margin: 4px 0px 0px 0px; float: left; width: 214px; height: 250px; " title="A sheriff’s deputy in Centennial, Colo., prepares to fingerprint a suspect as part of booking into the Arapahoe County Justice Center. Secure Communities runs the fingerprints of everyone booked into jail against immigration records. (AP File/Chris Schneider)" />We&rsquo;ve been hearing a lot about how immigration enforcement intersects with local law enforcement. Last week, the U.S. Supreme Court upheld an Arizona requirement that police officers check the immigration status of people they stop for other reasons. Now we&rsquo;ll hear from our West Side bureau about a suburban Chicago man who got tangled up with immigration enforcement after a drug arrest. He has filed a suit that offers a novel challenge to one of President Obama&rsquo;s key immigration-enforcement programs.</p><p>MITCHELL: There&rsquo;s no doubt James Makowski of Clarendan Hills did something illegal. In 2010 police caught him with heroin and he pleaded guilty to that. A judge approved him for a state-run boot camp. But that&rsquo;s not where Makowski ended up.</p><p>MAKOWSKI: I thought I would be home in 120 days but -- then after I get a note back from a counselor, after I&rsquo;d asked about when I&rsquo;d be shipping to boot camp -- she said that I was ineligible for boot camp due to an immigration detainer.</p><p>MITCHELL: That&rsquo;s basically a flag in his file from Immigration and Customs Enforcement, the federal agency known as ICE. So . . .</p><p>MAKOWSKI: I got sent to the maximum-security penitentiary in Pontiac.</p><p>MITCHELL: And he stayed for about two months. How did this happen? It comes down to an ICE program called Secure Communities. In that program, FBI fingerprint data about people booked at local jails get run against immigration data. If a check yields a match, ICE can issue one of its detainers. The point is to catch people in the criminal justice system who are not authorized to be in the U.S. and eventually deport them. The thing is, Makowski had every right to be in the country.</p><p>MAKOWSKI: I feel like I got punished twice for what I did in my past.</p><p>MITCHELL: Makowski&rsquo;s detention was based on faulty information. He was born in India and adopted by a U.S. family. When he was 1, the government granted him citizenship. But &mdash; at age 22, when he got picked up on the heroin charge &mdash; the feds didn&rsquo;t have their records right. So, Makowski stayed in that maximum-security pen before authorities straightened things out and let him into the boot camp. On Tuesday, Makowski filed a federal suit over all this. Defendants include top officials at the FBI, ICE and their parent departments. Makowski claims that when the FBI shared data with ICE &mdash; and when ICE didn&rsquo;t keep track of his citizenship status &mdash; they violated his rights under the U.S. Privacy Act. Legal experts say the suit appears to be the first challenge to Secure Communities under that law. Makowski&rsquo;s attorneys include Mark Fleming of the Chicago-based National Immigrant Justice Center.</p><p>FLEMING: There [are] simple ways in which both the FBI and ICE could be in compliance with the Privacy Act.</p><p>MITCHELL: Fleming says ICE could, for example, interview suspected immigration violators before slapping detainers on them.</p><p>FLEMING: Unfortunately, the system does not provide those basic checks right now and, so, there are many more U.S. citizens that are getting wrapped up into this.</p><p>MITCHELL: Officials at ICE and the departments of Justice and Homeland Security did not answer our questions about the suit Tuesday (see&nbsp;<a href="#note">UPDATE</a>). An FBI spokesman said his agency does not comment about pending litigation outside the courtroom. But a supporter of tougher immigration controls doubts that the Privacy Act protects U.S. citizens from what Makowski endured. Jessica Vaughan directs policy studies for a Washington group called the Center for Immigration Studies. Vaughan says the FBI and ICE share the fingerprint information for legitimate law-enforcement purposes.</p><p>VAUGHAN: Mistakes can be made. But that is not necessarily a reason to throw out the whole system.</p><p>MITCHELL: Vaughan says it&rsquo;s important to keep something else in mind.</p><p><a name="note"></a></p><p>VAUGHAN: The individual who&rsquo;s filing this suit would not have had anything to worry about had he not been convicted of a serious crime to begin with. He was convicted of a drug crime.</p><p>MITCHELL: Convicted he was. But Makowski says no one should have to serve extra time behind bars because of errors in immigration records.</p><p><em>After a deadline for Tuesday&rsquo;s broadcast of this story, ICE provided this statement: &ldquo;The information-sharing partnership between the Department of Homeland Security and the FBI serves as the cornerstone of Secure Communities, and fulfills a mandate required by federal law. This information sharing does not violate the Privacy Act. U.S. Immigration and Customs Enforcement (ICE) is evaluating the allegations contained in the lawsuit; however, we do not comment on pending litigation.&rdquo;</em></p><p><em>The ICE statement continues: &ldquo;In December ICE announced a new detainer form and the launch of a toll-free hotline &mdash; (855) 448-6903 &mdash; that detained individuals can call if they believe they may be U.S. citizens or victims of a crime. The hotline is staffed 24 hours a day, seven days a week, by ICE personnel at the Law Enforcement Support Center. Translation services are available in several languages from 7 a.m. until midnight (Eastern), seven days a week. ICE personnel collect information from the individual and refer it to the relevant ICE Enforcement and Removal Operations (ERO) Field Office for immediate action.&rdquo;</em><br />&nbsp;</p></p> Wed, 04 Jul 2012 10:16:00 -0500 http://www.wbez.org/news/immigration-enforcement-program-faces-novel-suit-100646 Feds raid Northwest Indiana office http://www.wbez.org/news/criminal-justice/feds-raid-northwest-indiana-office-99832 <img typeof="foaf:Image" src="http://llnw.wbez.org/main-images/RS5849_van til and stig-scr.jpg" alt="" /><p><p>Federal authorities are sorting through files and computers confiscated from the Surveyor&rsquo;s office in Lake County, Indiana. No one is saying what&rsquo;s behind the investigation.</p><p>About a dozen FBI agents arrived to the office in Crown Point late Tuesday morning. Office employees were told to leave and not come back for two hours as documents and computer hard drives were taken under subpoena.</p><p>The elected surveyor, George Van Til, would only issue a written statement.</p><p>&ldquo;This is a total surprise to me and I&rsquo;m not really aware of exactly what&rsquo;s going on and what the authorities are looking for or at. I can&rsquo;t answer any questions at this time. We will assess this situation later,&rdquo; Van Til said. &ldquo;It&rsquo;s important for everyone not to jump to any conclusions. This is not the first time the FBI has been in a government office here nor will it be the last time I&rsquo;m sure.&rdquo;</p><p>The FBI office in Indianapolis declined comment.</p><p>An elected county official, who asked not to be identified, believes the investigation centers around Van Til&rsquo;s possible use of county equipment for his re-election campaign.</p><p>A longtime Northwest Indiana politician, Van Til&rsquo;s been the county surveyor for the last 20 years. The office&rsquo;s primary responsibility is flood control, along with collecting and storing county geographic information. In early May, Van Til won the Democratic primary. He faces a little known Republican challenger in the fall.</p><p>John Dull, who serves as the attorney for the Lake County Commissioners, the executive branch of county government whose office is just down the hall from Van Til, said he does not know what the FBI is investigating.</p><p>&ldquo;I don&rsquo;t have any indication of what the subject may be. I don&rsquo;t know. They did not give me a subpoena,&rdquo; Dull said. &ldquo;I learned about it when two people came in and that they were passed up by the people as they went up to the surveyor&rsquo;s office and that&rsquo;s when I learned it.&rdquo;</p><p>Lake County government and some of the cities that are within the county, Gary, Hammond and East Chicago, have seen their share of public corruption scandals over the years.</p><p>&nbsp;</p><p>&nbsp;</p></p> Tue, 05 Jun 2012 18:42:00 -0500 http://www.wbez.org/news/criminal-justice/feds-raid-northwest-indiana-office-99832 After 9/11, Chicago FBI tries to improve its image within Muslim community http://www.wbez.org/episode-segments/2011-09-09/after-911-chicago-fbi-tries-improve-its-image-within-muslim-community-91 <img typeof="foaf:Image" src="http://llnw.wbez.org/segment/photo/2011-September/2011-09-09/AP061208019796.jpg" alt="" /><p><p>Today, we’re looking at how 9/11 transformed Muslim-Americans around the country and in Chicago.</p><p>In a previous segment, we talked to a lawyer who defended the Global Relief Foundation, a local Islamic charity shuttered by the federal government shortly after the attacks. The group was never convicted of any wrongdoing. Incidents like this did nothing to endear the government to American Muslims. To build relationships and trust, the<a href="http://www.fbi.gov/chicago"> FBI office in Chicago</a> has made a concerted effort to reach out to the local Muslim community.</p><p>For a progress report, WBEZ’s criminal justice reporter, <a href="http://www.wbez.org/staff/robert-wildeboer">Robert Wildeboer</a>, sat down with Robert Grant, who heads the FBI’s Chicago field office. They began with the controversy surrounding the government’s decision to close two Islamic charities in Chicago.</p></p> Fri, 09 Sep 2011 17:59:00 -0500 http://www.wbez.org/episode-segments/2011-09-09/after-911-chicago-fbi-tries-improve-its-image-within-muslim-community-91 Reflections from the crash site of United Flight 93 http://www.wbez.org/episode-segments/2011-09-09/reflections-crash-site-united-flight-93-91757 <img typeof="foaf:Image" src="http://llnw.wbez.org/segment/photo/2011-September/2011-09-09/Flight 93.jpg" alt="" /><p><p>After September 11<sup>th</sup> FBI agents in Chicago were tasked with figuring out if an attack could happen here. But some agents from the Chicago office were also immediately sent to Pennsylvania. Their job was to sift through the rubble of United Flight 93 - for evidence of who carried out the attacks. Two of the officers involved in the operation shared their memories with <em>Eight Forty-Eight.</em></p></p> Fri, 09 Sep 2011 15:28:00 -0500 http://www.wbez.org/episode-segments/2011-09-09/reflections-crash-site-united-flight-93-91757 Quinn hits back against immigration checks http://www.wbez.org/story/quinn-hits-back-against-immigration-checks-91065 <img typeof="foaf:Image" src="http://llnw.wbez.org/story/photo/2011-August/2011-08-26/deportation protest_flickr_presenteorg.jpg" alt="" /><p><p>Illinois Gov. Pat Quinn is trying to throw another wrench into a key immigration-enforcement program of President Obama’s administration, saying it ensnares too many people and erodes trust in local police.<br> <br> An <a href="http://www.wbez.org/sites/default/files/Quinn_office_to_Morton.pdf">August 18 letter</a> from the governor’s office to John Morton, director of Immigration and Customs Enforcement, hints about a possible legal challenge and asks the federal agency to contact all 26 Illinois counties that have agreed to participate in the program, called Secure Communities, to confirm they still want to take part.<br> <br> “This is the least that ICE can do,” says the letter, signed by John Schomberg, Quinn’s general counsel. “These counties signed up, along with the state, for a Secure Communities that is far different from the program” ICE first presented.</p><p>The Obama administration says the program helps focus immigration enforcement on repeat immigration violators and dangerous criminals, such as murderers and kidnappers.</p><p>ICE reports that Secure Communities has led to the deportation of more than 86,000 convicted criminals. Data from the agency show that about half of those immigrants were convicted of misdemeanors, not felonies.<br> <br> The program has led to the deportation of another 34,000 people not convicted of any crime. Voicing concerns about them, Quinn withdrew Illinois from Secure Communities in May. New York and Massachusetts followed with similar steps.<br> <br> But an August 5 letter from Morton to governors says states no longer have any choice and that Secure Communities will extend to all local law-enforcement jurisdictions in the United States by 2013. An addendum to the letter describes changes in the program. Those include the elimination of a state role in conveying data for the fingerprints.</p><div><hr style="border-width: initial; border-color: initial; "><blockquote><p><span style="font-family: georgia, serif; "><span style="font-size: 26px; "><em>"These counties signed up, along with the state, for a Secure Communities that is far different from the program"&nbsp;</em></span></span></p></blockquote><p><em>--John Schomberg, Quinn’s general counsel</em></p><hr style="border-width: initial; border-color: initial; "><p>Mark Fleming, an attorney with the Chicago-based National Immigrant Justice Center, says ICE could end up in court if Secure Communities lacks the consent of the local jurisdictions. “The governor’s office may be laying the groundwork for a legal challenge,” Fleming says.</p></div><p>Fleming points to 1990s rulings by the U.S. Supreme Court affirming that the 10th Amendment bars Congress from compelling state and local governments to administer federal regulations.<br> <br> Asked whether Illinois officials are cooking up a lawsuit, a Quinn spokeswoman refers to Schomberg’s letter, which says the governor’s office “will continue to monitor and evaluate” Secure Communities and “consider all of the state’s options.”<br> <br> ICE representatives did not respond to WBEZ requests for comment on whether Secure Communities violates the 10th Amendment.<br> <br> The Obama administration lately has downplayed agreements through which it first brought state and local governments into the federal initiative. “We wanted to work with the locals and let them know about the program,” says Jon Gurule, an ICE official who helped set up Secure Communities.<br> <br> “But, from the operational side, it’s federal information sharing between two federal agencies,” Gurule adds, referring to ICE and the FBI. “And it’s congressionally mandated.”<br> <br> If ICE checks in with the Illinois counties, as the Illinois letter asks, the federal agency would find some with second thoughts about joining Secure Communities. “If they honor the governor’s request, I would not want to partake in it,” says Patrick Perez, sheriff of west suburban Kane County, part of the program since 2009.<br> <br> “The program has not turned out to be what it was supposed to be,” Perez says, pointing to the deportation of non-criminals. “People in the Hispanic community have become very reticent to contact police if they’re victims of crime because they’re fearful that . . . they will be deported.”<br> <br> The federal initiative also has defenders. “My life has been destroyed by all of this cheap, foreign scab labor,” says a 56-year-old network engineer in Chicago, blaming immigrants for his unemployment and asking that his name not be published because he’s job hunting. “Whether it’s illegal aliens or foreign legal workers, they’re hurting American citizens.”<br> <br> “Secure Communities removes the criminals,” he says, “and that’s a start.”</p></p> Thu, 25 Aug 2011 22:06:00 -0500 http://www.wbez.org/story/quinn-hits-back-against-immigration-checks-91065 Venture: Mortgage fraudsters hatch post-bubble schemes http://www.wbez.org/story/venture-mortgage-fraudsters-hatch-post-bubble-schemes-90567 <img typeof="foaf:Image" src="http://llnw.wbez.org/story/photo/2011-August/2011-08-13/IMAG1092.jpg" alt="" /><p><p>A lot has changed since the housing crash began. But one thing's still the same. Even though banks have tightened lending, and new regulations are in place, scammers are still finding ways to cheat the system.</p><p>Emilio Carrasquillo is giving me a grim kind of tour in the Back of the Yards neighborhood.</p><p>CARRASQUILLO: Another foreclosure across the street. So you have what, three, four, five foreclosures on this one block.</p><p>This South Side neighborhood is dear to Carrasquillo. He heads the local office here for the non-profit Neighborhood Housing Services of Chicago. He keeps an eye on real estate listings, and last year he started noticing something strange.</p><p>Buildings were selling for crazy amounts of money.</p><p>In a neighborhood where banks were unloading properties for $20,000 or $30,000, all of a sudden, buildings were going for 10 or 15 times that. Like this one: A bank sold this boarded-up, graffiti-tagged two-flat for about $35,000 in February 2009 and then:</p><p>CARRASQUILLO: It was sold in November of 09 for $315,000 and it went into foreclosure right away, seven months afterwards.</p><p>But wait: This round of sales and foreclosures happened after the housing bubble burst. Are banks really falling for this all over again? Turns out Carrasquillo is as surprised as I am.</p><p>CARRASQUILLO: How can this be happening again? Who did the appraisal on this? How is it worth $355,000, $370,000, $350,000, $345,000? Where are these prices coming from?</p><p>So his housing agency turned over the suspicious transactions to the authorities. People like this guy.</p><p>PAUL HOLDEMAN: Paul Holdeman, supervisory special agent with the FBI.</p><p>Holdeman won't comment on the cases Carrasquillo discovered, but says loan fraud like what occurred during the housing boom has definitely continued since the crash. People find straw buyers who submit fake employment information to banks to qualify for big mortgages. Appraisers jack up the values of buildings and once one sells for an inflated amount, it's easy to justify other ones in the neighborhood at similar prices. The straw buyers never make a payment and the place goes into foreclosure, keeping it unoccupied for months or maybe years.</p><p>But I asked Holdeman to tell me about new schemes his agents are seeing.</p><p>HOLDEMAN: Now with the downturn in the market, we also see foreclosure rescue schemes which people are taking advantage of individuals in dire straits. And we also see things like short sale frauds, where people are finding themselves underwater, trying to get out of that property so going back to the banks and selling the property for less than what they owe on the mortgage and engaging in fraud schemes there to again extract money from financial institutions.</p><p>GROSS: So what are they doing? How does short sale fraud work?</p><p>HOLDEMAN: With a short sale fraud - oftentimes they'll go to a real estate agent to help them sell the property. The real estate agent may get certain offers. Let's say they have 3 offers. Let's say they get one for $150,000, one for $175,000 and one for $200,000. They may go to the bank that holds the original mortgage note and tell them, hey, we have an offer for $150,000, that's the best we have. So the bank says, we'll review it, all right we'll go ahead and sell it for $150,000. Then that agent knows they have someone who wanted it for $200,000, they can turn around and work it out to sell it for that after the fact. It all involves deflated appraisals, inflated appraisals and kickbacks behind the scenes and essentially individuals who are not exercising their fiduciary duty and making false statements to the banks.</p><p>GROSS: So in that case the bank is not putting out a lot of money in a mortgage - they're accepting a lot less money than they're due?</p><p>HOLDEMAN: Exactly. That's exactly what's going on.</p><p>I asked Holdeman why he thinks banks would fall for overinflated appraisals nowadays. They've made it harder for your average Joe Schmoe to get a loan, so what's going on? He says it's often out-of-state banks that make decisions based mostly on appraisals and loan applications that may be fraudulent, but look good enough to pass muster.</p><p>I called Wells Fargo, the bank that made the $315,000 dollar mortgage on the rundown property Carrasquillo pointed out to me. I asked them, what were they thinking? Why did they make that loan? They wouldn't say.</p><p>But they said they reviewed it earlier this year and found a number of problems with the paperwork on that property. So they told the authorities.</p><p>And there are a lot of authorities working on mortgage fraud - everyone from the FBI and the Department of Justice to the Illinois attorney general and the Cook County state's attorney. Matthew Jannusch, an assistant Cook County state's attorney assigned to the mortgage fraud unit, described some other kinds of schemes they're seeing. One that seems surprising in its audacity involves people submitting fraudulent title documents for bank-owned properties to the Cook County Recorder of Deeds. Then they break the lock and rent the place out, collecting rent until the bank finally figures out what's going on and gets the paperwork fixed.</p><p>Here's an excerpt of the conversation with Matthew Jannusch on the new kinds of post-bubble schemes they're seeing:</p><p><audio class="mejs mediaelement-formatter-identified-1332483594-1" src="http://llnw.wbez.org/story/insert-image/2011-august/2011-08-13/jannusch-edit.mp3">&nbsp;</audio><br> <br> For his part, Emilio Carrasquillo of Neighborhood Housing Services says he's just tired of watching his communities manipulated like some kind of monopoly game. He says, look at that woman over there who's mowing her grass. She loses out because the buildings around hers are vacant and falling apart all because some people are using them to bilk money out of banks.</p><p>CARRASQUILLO: You look at all these regulations and restrictions they've put on everyone from banks to loan originators and yet this continues to happen. Obviously something is wrong, something is amiss.</p><p>Law enforcement may be making some headway, though. A new mortgage fraud risk report by a company called Interthinx says, in recent months, for the first time in more than a year, none of Chicago's zip codes were among the top ten most at risk for mortgage fraud in the country.</p><p>Still, Paul Holdeman of the FBI has no illusions his job is done. He says real estate is one of those areas where people will always be dreaming up new ways to exploit the system.</p><p>And now for this week's windy indicator, where we take a road less traveled to evaluate the economy.</p><p>Today: Hostels, that low-cost lodging for travelers.</p><p>Mike Haney&nbsp; runs a real estate investment company called&nbsp; Newcastle Limited. He says the lodging industry was thriving when his company bought Getaway Hostel in Lincoln Park four years ago.</p><p>HANEY: End of 2007, beginning of 2008, of course, as the financial crisis really started to unfold, we found that business dropped off here as it did for all lodging properties in Chicago and elsewhere.</p><p>But in 2010, things started to turn around. He says in the last year, more people are traveling - an early sign they're feeling more confident in the economy, even if companies aren't.</p><p>HANEY: We saw an uptick in our business before hotels saw an uptick. Individuals who make decisions to travel can make those decisions much more quickly than businesses typically do.</p><p>Haney says bookings at Getaway Hostel are up 40 percent since early 2010. The day I was there, backpackers seemed to check in constantly and groups of Spanish, German and Asian travelers sat around chatting.</p><p>Mat Meadows, the guy who manages the hostel day-to-day, says the spike in activity includes some atypical guests, like families and professionals in town for conferences. About half of them forgo the bunk beds and spring for private rooms.</p><p>Next week, the windy indicator goes to the opera.</p></p> Mon, 15 Aug 2011 05:00:00 -0500 http://www.wbez.org/story/venture-mortgage-fraudsters-hatch-post-bubble-schemes-90567 Federal agents go undercover to root out mortgage fraud http://www.wbez.org/story/federal-agents-go-undercover-root-out-mortgage-fraud-90087 <p><p>Fourteen people have been charged in mortgage fraud schemes in Chicago’s Englewood neighborhood after an undercover federal investigation brought the cases to light.<br> <br> The FBI, the U.S. Department of Housing and Urban Development and the IRS all worked together on the undercover operation. Federal agents infiltrated the alleged schemes by posing as straw buyers. Once they entered that world, they allegedly found appraisers willing to jack up appraisals in exchange for higher fees and others willing to create fake employment records as part of the effort to dupe banks into making mortgages.<br> <br> Assistant U.S. Attorney Tyler Murray says mortgage fraud has consequences for an entire neighborhood.<br> <br> "Mortgage fraud deprives an area of a property tax base," Murray said. "These homes become vacant and are used as drug stash houses and the like. It’s part of a larger problem."<br> <br> Murray says mortgage fraud did not go away when the housing bubble burst. Instead, he says people have figured out new ways to illegally profit off of real estate</p></p> Wed, 03 Aug 2011 20:25:00 -0500 http://www.wbez.org/story/federal-agents-go-undercover-root-out-mortgage-fraud-90087 Fugitive mobster 'Whitey' Bulger caught in Calif. http://www.wbez.org/story/2011-06-23/fugitive-mobster-whitey-bulger-caught-calif-88232 <img typeof="foaf:Image" src="http://llnw.wbez.org/npr_story/photo/2011-June/2011-06-23/whiteycaptured_custom.jpg" alt="" /><p><p>James "Whitey" Bulger, the notorious Boston mobster accused of murdering 19 people, is in custody in California after an epic 16-year manhunt that turned him into a global sensation.</p><p>The FBI finally caught up with the 81-year-old Bulger on Wednesday at a residence in Santa Monica, Calif. He was apprehended along with his longtime girlfriend, Catherine Greig, just days after the government launched a new publicity campaign to locate the fugitives, said Steven Martinez, FBI's assistant director in charge in Los Angeles.</p><p>A tip generated by the campaign led to the arrest, Martinez said.</p><p>Known as "The Irish Godfather" of Boston, Bulger has been on the FBI's Top Ten Most Wanted posters for years and was an inspiration for the 2006 movie <em>The Departed.</em></p><p>Along with Stephen "The Rifleman" Flemmi, he led the violent Winter Hill Gang, a largely Irish mob that ran loan-sharking, gambling and drug rackets in the Boston area. U.S. Attorney Donald K. Stern said in 2000 that the two were "responsible for a reign of intimidation and murder that spanned 25 years."</p><p>In the 1970s, Bulger became a top-secret FBI informant in Boston but later corrupted his handlers.</p><p>The agents "tipped him off to investigations by other police agencies and they also tipped him off to other people who were informing against him so that he could and did murder them," said David Boeri, a reporter from member station WBUR in Boston who has followed the Bulger case for more than two decades.</p><p>When state and federal investigators finally closed in on Bulger in January 1995, he fled Boston with his girlfriend after being tipped by his FBI handler. Two former FBI agents were later charged with plotting murders with Bulger, and one is now serving a life sentence in prison.</p><p>"This is what makes this such a treacherous story," Boeri said. "It is corruption within the FBI."</p><p>But on Wednesday, it was the FBI who took Bulger down. Agents swarmed around the Santa Monica apartment building where he and Grieg, 60, were staying.</p><p>Bulger lived on the third floor of The Princess Eugenia, a three-story, 28-unit building of one and two-bedroom apartments three blocks from a bluff that overlooks the Pacific Ocean.</p><p>The FBI had been conducting surveillance in the area where the arrest was made, said police Sgt. Rudy Flores, who gave no details of the arrest.</p><p>Barbara Gluck, who lives on the same floor as Bulger and Greig, told The Associated Press that she didn't know their names but recognized them from photos on the Internet after she heard about their arrest.</p><p>Gluck described Greig as "sweet and lovely" and said they would have "girl talk" when they ran into each other in the building. But she added that Bulger became angry whenever he saw the two of them talking.</p><p>"He was nasty," Gluck said. "At one point, [Greig] said [Bulger] has a rage issue."</p><p>The former fugitives were scheduled to make an appearance in Los Angeles federal court Thursday. He faces a series of federal charges including murder, conspiracy to commit murder, narcotics distribution, extortion and money laundering. Greig is charged with harboring a fugitive.</p><p>The arrest brings an end to a manhunt that received worldwide attention as the FBI received reported sightings of Bulger and Greig from all over the U.S. and parts of Europe. In many of those sightings, investigators could not confirm whether it was Bulger who was spotted or a lookalike.</p><p>The investigation also touched the highest level of Massachusetts politics. Bulger's younger brother, William, was one of the state's most powerful politicians, leading the Massachusetts Senate for 17 years and later serving as president of the University of Massachusetts for seven years. William Bulger told a congressional committee that he had spoken to his brother shortly after he went on the run in 1995 but had no idea about his whereabouts.</p><p>He declined to comment to the <em>Boston Globe</em> about his brother's arrest.</p><p>Federal officials said they have linked James Bulger to a series of ruthless killings. One victim was shot between the eyes in a parking lot at his country club in Oklahoma. Another was gunned down in broad daylight on a South Boston street reportedly to prevent him from talking about the killing in Oklahoma. Others allegedly were taken out for running afoul of Bulger's gambling enterprises.</p><p>After 16 years on the lam, Wednesday's arrest was a stunning reversal for Bulger.</p><p>"This guy, used to look out at Boston from Southie — the old town — and say, 'I own this town,' " WBUR's Boeri said.</p><p><em>David Boeri of member station WBUR contributed to this report, which contains material from The Associated Press.</em> <div class="fullattribution">Copyright 2011 National Public Radio. <img src="http://metrics.npr.org/b/ss/nprapidev/5/1308836828?&gn=Fugitive+Mobster+%27Whitey%27+Bulger+Caught+In+Calif.&ev=event2&ch=1070&h1=Around+the+Nation,U.S.,Home+Page+Top+Stories,News&c3=D%3Dgn&v3=D%3Dgn&c4=137364197&c19=20110623&v19=D%3Dc19&c20=1&v20=D%3Dc20&c45=MDA0OTc2MjAwMDEyNjk0NDE4OTI2NmUwNQ001"/></div></p></p> Thu, 23 Jun 2011 08:42:00 -0500 http://www.wbez.org/story/2011-06-23/fugitive-mobster-whitey-bulger-caught-calif-88232