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*** UPDATED x3 - One count of “delivering a false federal income tax return” - Report: All felony charges dropped *** Rep. LaShawn Ford to change plea agreement

Monday, Aug 4, 2014

* From the US Attorney’s office…

The change of plea was just scheduled this morning for 11 a.m. The previously scheduled 9 a.m. status hearing was cancelled. Details will be made available during and after court.

The hearing change today is “by agreement.” I’m told “it is related to, but different from, what he was originally charged with.”

I’ll update this post as soon as I know more.

Rep. Ford was indicted on 17 counts of bank fraud and making false statements to a financial institution in November of 2012. The original indictment is here. He has steadfastly denied the charges and pled not guilty.

*** UPDATE 1 *** The feds had a lousy case, so it’s good to see them reportedly backing off…


*** UPDATE 2 *** From the feds…

Attached is a superseding information filed this morning charging State Rep. LaShawn Ford with one count of delivering a false federal income tax return for 2007, a misdemeanor, which carries a maximum sentence of a year in prison and a $100,000 fine.

The new “superseding information”…

On or about August 29, 2008, in the Northern District of Illinois, Eastern Division, and elsewhere, LASHAWN FORD, defendant herein, willfully delivered and disclosed, and caused to be delivered and disclosed, to the Internal Revenue Service a U.S. Individual Income Tax Return (Form 1040 with schedules and attachments) for calendar year 2007, which return was false as to a material matter in that the return falsely stated that the total cost or other basis for the property at 5700 W. Erie in Chicago was $166,979, when in fact, as FORD knew, the total cost or other basis for that property was materially lower than $166,979;

In violation of Title 26, United States Code, Section 7207.

*** UPDATE 3 *** From the plea deal…

One of those investment properties was a single-family home located at 5700 W. Erie in Chicago. The defendant sold that property on or about March 20, 2007, for $275,000.

On or about August 29, 2008, the defendant signed and filed with the Internal Revenue Service an income tax return (Form 1040) for calendar year 2007. On that return, the defendant stated that the cost or other basis for the property at 5700 W. Erie was $166,979, a figure that included $74,226 in purported rehabilitation costs, yielding a capital gain of $124,278. As the defendant knew, the rehabilitation costs for that property were in fact approximately $51,160. This resulted in a $3,782 tax loss.

Man, they really backtracked there. Wow.

From the feds…

U.S. District Judge Rebecca Pallmeyer set sentencing for 11 a.m. on Nov. 7, 2014.

Ford faces a maximum sentence of a year in prison and a $100,000 fine. The court must impose a reasonable sentence under federal statutes and the advisory United States Sentencing Guidelines.

- Posted by Rich Miller        


32 Comments
  1. - Oswego Willy - Monday, Aug 4, 14 @ 9:52 am:

    Being tweeted by Carol Marin it’s one misdemeanor being plead out. If she is right, wow.

    Both sides claim “victory” with a plea of guilt, and just a misdemeanor that is not 17 counts, or felonies(?)

    The spin by both might be more telling than just the plea on its face…


  2. - Fire Ron Guenther - Monday, Aug 4, 14 @ 9:59 am:

    if he pleads guilty to a misdemeanor, he is not disqualified from continuing as a state rep, correct? and if so, will he be reprimanded by the House?


  3. - Anonymoiis - Monday, Aug 4, 14 @ 10:01 am:

    Almost makes one wonder if this deal was in exchange for anything, such as information that could be helpful to the Feds elsewhere…


  4. - Sausage - Monday, Aug 4, 14 @ 10:05 am:

    If true, he will continue as a Rep and the House will not kick him out.

    If LaShawn is as savvy as I always thought he was, HE SHOULD RUN FOR MAYOR.

    Beating the system will make him a hero with a lot of Chicago if he spins his story the right way


  5. - wordslnger - Monday, Aug 4, 14 @ 10:05 am:

    You have to wonder what Kafka or Joseph Heller would do with this weirdness.

    To date, there has not been one criminal prosecution related to the massive fraud perpetrated by the big banks that crashed the world economy.

    The got bailed out, then paid billions in cost-of-doing-business fines without admitting wrongdoing, but no one is looking at time.

    Yet after a deep dive into a loan application, the federales file 17 counts of bank fraud against some mushroom West Side state rep.

    Government as farce.


  6. - Gooner - Monday, Aug 4, 14 @ 10:07 am:

    The spin has started already.

    As noted above, Carol Marin notes that it is “remarkable” that the felonies have been dropped.

    In contrast, Mick Dumpke seems to think this is bad for Ford: “Yipes. State Rep. La Shawn Ford to plead guilty in bank fraud case.”

    Considering the charges and the resolution, my own impression is that this is going to make Ford look pretty good and the Feds look terrible.


  7. - Knome Sane - Monday, Aug 4, 14 @ 10:26 am:

    =if so, will he be reprimanded by the House?=

    For a misdemeanor guilty plea? The answer to your question is: no.

    And, for what it’s worth, for a misdemeanor, nor should he be.


  8. - DuPage Bard - Monday, Aug 4, 14 @ 10:35 am:

    Dropping 17 charges to one misdemeanor is a pretty big drop! Maybe Carol could investigate which Fed ordered the “hit”.


  9. - A guy... - Monday, Aug 4, 14 @ 10:55 am:

    I’ll say this for Ford, he never ever backed off of his opening monologue. It’s a win for him.


  10. - Federalist - Monday, Aug 4, 14 @ 10:57 am:

    Is this a great state or what? With the emphasis on “or what’!


  11. - Anonymous - Monday, Aug 4, 14 @ 11:00 am:

    Reprimand for a misdemeanor? Should the House reprimand every rep who plead guilty to a traffic citation?


  12. - okgo - Monday, Aug 4, 14 @ 11:03 am:

    So, they said he lied by valuing the house at $166,979, when he had just sold it for $165,000.

    And that said house sold in 2007 for $278,000?

    Ummm, what?

    You can see the odd sales history of the house here:

    http://chicago.blockshopper.com/property/16082100270000/5700_w_erie/


  13. - okgo - Monday, Aug 4, 14 @ 11:04 am:

    I mean, I guess that $1,979 difference is “materially lower.” But that seams like a stretch.


  14. - West Sider - Monday, Aug 4, 14 @ 11:17 am:

    Ford is the real deal. An ordinary guy, trying to make an entrepreneurial living in a complicated world. This plea is nothing but face saving for the Feds. It’s a tacit acknowledgement that they had nothing.


  15. - Sbarro McArby's - Monday, Aug 4, 14 @ 11:18 am:

    You want to make some money? Register LaShawnformayor.com


  16. - Anon - Monday, Aug 4, 14 @ 11:42 am:

    Congrats to LaShawn! It’s rare for the Federales to drop all 17 felony counts. In exchange, they have a picayune tax rap. If the Feds went through any of our tax returns for the past 7 years with a fine-tooth comb, they would probably find minor discrepancies in many if not most.


  17. - Eugene - Monday, Aug 4, 14 @ 12:01 pm:

    This prosecution shows how screwed up the priorities are at the Justice Department. How many people who made millions in subprime mortgages have faced felony indictments? This deal is a fig leaf for the feds. And I’ll add this: there are few people in the House who are more independent or care more about their district than LaShawn Ford.


  18. - wordslinger - Monday, Aug 4, 14 @ 12:02 pm:

    This was a sinister and egregious abuse of prosecutorial discretion.

    The federales don’t chase every lead they come across; they pick and choose, carefully, to maintain their .900+ batting average.

    Can we get an accounting of the costs to the taxpayers — prosecutors, FBI agents, IRS agents, support personnel, etc. — that it took to boat this misdemeanor conviction? You know Ford is probably out six figures on lawyers.

    Everyone feel better?

    Meanwhile, I can walk a few blocks into Austin and score some Mexican Brown in the open air markets, any time, any day of the week. Last I checked both buying and selling were federal offenses.

    There shouldn’t be reprimands here — there should be firings, in the U.S. Attorney’s office, for abuse of power.


  19. - Dan Johnson - Monday, Aug 4, 14 @ 12:10 pm:

    That’s great news. Both for a real stand-up guy Rep. Ford and for the US Attorneys Office for finally showing some long-overdue prosecutorial discretion and dropping this absurd case. That’s refreshing.

    Maybe we’re turning the corner from the political-scalp-hunting days of the US Attorneys Office to a more reasonable approach of spending taxpayer resources to promote public safety.

    I mean, better late than never. This is really good news.


  20. - Pot calling kettle - Monday, Aug 4, 14 @ 12:23 pm:

    Good news for Ford, unless you count the legal expenses associated with having to mess with the Feds. And, for what? A misstatement of the costs of a rehab? Given the history of this case, I wonder how well supported that is…


  21. - onevoter - Monday, Aug 4, 14 @ 12:23 pm:

    The charges were overkill by the Feds anyway.


  22. - jim - Monday, Aug 4, 14 @ 12:29 pm:

    It looks like the feds over-reached, but I doubt Ford is the saint that his supporters portray him to be. His re-election should be assured, but I don’t see him getting elected mayor of anything.


  23. - Judgment Day - Monday, Aug 4, 14 @ 12:35 pm:

    “…..a U.S. Individual Income Tax Return (Form 1040 with schedules and attachments) for calendar year 2007, which return was false as to a material matter in that the return falsely stated that the total cost or other basis for the property at 5700 W. Erie in Chicago was $166,979, when in fact, as FORD knew, the total cost or other basis for that property was materially lower than $166,979;”
    ————————–

    Oh, the feds just figured out they didn’t want to touch this one. No kidding?

    Ok, at one point earlier in 2007 it’s $278k? Then it drops down to $166+k? (also in 2007).

    Welcome to the “Go-Go” years in real estate (up into 3RD quarter of 2007). Then it turned into the “Gone-Gone” years virtually overnight and the feds handed out free “Stay Out of Jail” passes to all the crooked, lying, thieving too-big-to-fail ‘banksters’ like they were popcorn.

    There were so many of these ‘Liar’s Loans’ out there that you couldn’t swing a really short dead cat without hitting a bunch of that crap paper.

    Guy gets a 165+% loan-to-value financing ($276k/166k =1.66%), and this is now a big deal to the feds? Where were the feds back in 2011-2012 when the 5 year statute of limitations were running out on all this stuff?

    Nothing like being late to the party.


  24. - Judgment Day - Monday, Aug 4, 14 @ 12:47 pm:

    You know what the worst part of it is? IF the feds really wanted to get serious, they would take a hard look at all these ‘Auction Rate Securities’ (so-called ‘Certificates of Participation’) that local governments and non-profits got suckered into. But that would be too much work, and the TBTF banks and Wall Street financiers would be sending in waves of lobbying talent into the DOJ.

    For reference, see the $1.4 bil deal Detroit hooked into back in 2005. Link is: http://www.freep.com/article/20140722/NEWS01/307220112/Syncora-detroit-bankruptcy-grand-bargain

    There’s reasons the Bankruptcy Court judge was so harsh in his terms toward the Pension Bonds.

    But the feds seemingly can’t be bothered……


  25. - Formerly Known As... - Monday, Aug 4, 14 @ 12:50 pm:

    The indictment made me skeptical of Mr. Ford’s protestations. His alleged use of funds for gambling, campaign purposes and so on led to the impression they would eventually expand the scope of their pursuit and that there was more to this.

    This is a welcome development and such great news for both Mr. Ford and our state.


  26. - Formerly Known As... - Monday, Aug 4, 14 @ 12:57 pm:

    It obviously can’t happen, but the Feds should have to pay Ford’s attorney fees, any associated costs from this and an “apology fee” for putting him through so much apparently unnecessarily.


  27. - Left Leaner - Monday, Aug 4, 14 @ 2:12 pm:

    Was the indictment submitted on a napkin? What did the feds actually have?!

    Huge waste of time for everyone.


  28. - Clarence - Monday, Aug 4, 14 @ 2:51 pm:

    I think that praise has to go to Zach Fardon who inherited this case and made the decision we saw today. It is a tough call for any prosecutor but he has to be commended.


  29. - walker - Monday, Aug 4, 14 @ 3:16 pm:

    OK Thank you Zach Fardon. You restored credibility to your whole office.


  30. - Anon - Monday, Aug 4, 14 @ 3:17 pm:

    Good for Zach Fardon for doing the right thing. Prosecutors can be extremely rigid. What supervisor approved these 17 felony counts? He or she ought to be held accountable for going 0 for 17.


  31. - Esteban - Monday, Aug 4, 14 @ 4:37 pm:

    Shame on the Federales for this- they should be required to pay ALL of his legal expenses.


  32. - DuPage Dave - Monday, Aug 4, 14 @ 9:38 pm:

    This is a big embarrassment for the feds. They had no case and tried to steamroll this guy. He’s no angel but spending all this time effort and money to get a plea to a misdemeanor is garbage.

    One can only hope that someone’s career as a prosecutor is now over.


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