McHenry County Blog

Credit a blog of the New York Daily News with pointing me to a Cook County law suit for $4.2 million, plus punitive damages, against Mutual Bank.

At issue is an analysis by Kenneth Conner of an appraisal by Adams Appraisal Service which Mutual Bank employee Conner knew was in the file, but which disappeared.

Conner performed real estate review and analysis for seven years and documented appraised valuation excesses exceeding $60 million in his last 2½ years of work, the suit states.

In June of 2005 a loan was approved to Rita Rezko, now-convicted Tony Rezko's wife, so Mrs. Rezko could purchase the lot next to the home Barack Obama was buying.

An appraisal said the lot was worth $625,000 and a loan was made for $500,000. Bank President Amrish Mahajan, along with other bank officers, approved the loan.

January 4, 2006, Rita Rezko entered into an agreement to sell the Obamas 10 feet of the lot. Whistle blower Conner was asked to perform an appraisal review of the Adams appraisal.

Conner concluded that the appraisal overvalued the lot by $125,000, that the lot was worth no more than $500,000.

MAI Howard Richter appraised the property at the time for $490,860. The suit points out that Richter's appraisal and Conner's conclusion of what the lot was worth were “substantially similar.”

Conner believes that the close relationship between the Obamas, the Rezkos and Mutual Bank's CEO meant that his super-boss knew of the Richter appraisal.

Conner knew his analysis was in the property's file, as was the Adams' appraisal.

The suit reveals that the bank got a Grand Jury subpoena on October 19, 2006, asking for the file on the empty lot and other Rezko banking information.

Conner says his analysis of the property's value was removed from the file before it was handed over to the Feds. He says that an appraisal check list dated June 15, 2005, signed by James P. Murphy was substituted for it.

Conner's report was also excised from the file when the FDIC audited it, the suit says, being replaced with the “Murphy checklist.”

Conner did not notice the removal of his analysis until 2007.

On June 18, 2007, he sent this email to Murphy:

“I spent time trying to track down work of mine that should be a particular high profile loan file, though it is not—having been replace by a checklist.”

He sent a second email a month later.

In an October 15, 2007, communication to Human Resources Department representative Lana Schlabach, Conner referenced,

“Resentment over my mentioned discovery of the removal/replacement of an appraisal review that I conducted. That appraisal review contained substantial observations and suggestions. The transaction and parties were high profile in the media. I am under the impression that the FBI has since looked at the file...

“I remember conducting the appraisal review and I remember what I concluded. If the FBI were to ask me about such I would tell them the truth. I never rescinded or amended my findings. When I noticed that my appraisal review was missing, I felt an obligation to point that out, even if the mention was counterintuitive in effect.”

Eight days later Conner was fired, the reason given that Conner had frozen a trading account pledged as security by a third party on an unrelated Rezko $500,000 line of credit.

Conner says he “discerned the bank's collateral was in jeopardy,” according to the legal papers.

Conner's suit claims the following laws were broken:

• False bank statement by bank officers
• False statement willfully overvaluing property
• Bank fraud
• Witness retaliation
• Willful violation of a lawful subpoena
• FDIC regulations
• Similar Illinois laws and state banking regulations

Conner claims his firing was of a retaliatory nature.

Labels: Adams Appraisal Service, Amrish Mahajan, Barack Obama, Howard Richter, James P. Murphy, Mutual Bank, Rita Rezko, Tony Rezko, Whistleblower

Let's assume everything is on the square at the Illinois Health Facilities Planning Board.

OK. Forget about the fixing of the new hospital that Wisconsin's Mercy Health Care System wanted to build in Crystal Lake to compete with local biggie Centegra Health Care System's dominant hospitals in McHenry County.

Governor Rod Blagojevich appointed a new board, didn't he?

Problem solved, right?

No reason to be suspicious when Naperville's Edward Hospital gets turned down for the third time, right?

“Edward contends that the hospital is necessary because of the area's rapid growth and because one-third of the patients at its crowded Naperville campus come from the Plainfield area,”

Chicago Tribune reporter James Kimberly reports.

Edward Hospital admitted projecting that Will County would grow.

Naughty. Naughty.

“...acting health facilities board Chairman Susana Lopatka said population projections are not certain to materialize and even if they did, there would be insufficient demand to support a new hospital by 2015.”

Naturally, nearby hospitals objected.

Just as they did in McHenry County.

Irrelevant, of course, is that Edward Hospital CEO Pam Meyer Davis blew the whistle on Stuart Levine's little shakedown game.

Oh, yes.

“...the board and its staff became contentious at times.”

I'll bet.

The only cure for this regulatory agency is abolition, something I tried, but failed to accomplish in 1993.

No chance of that now.

We are in the age of “government knows best” again.

Maybe we'll end up with another warehouse full of basketballs that won't get given to Chicago kids, just like I was told two days ago that we had in Chicago during Lyndon Johnson's Great Society.

Labels: Centegra, Edward Hospital, Illinois Health Facilities Planning Board, Mercy Health System, Pam Meyer Davis, Plainfield, Rod Blagojevich, Stuart Levine, Susana Lopatka, Whistleblower, Will County

$36.7 million is flowing into public treasuries across the country and into one whistleblower's pocket as a result of actions by the Chicago office of the U.S. Attorney.

Coordinating with the 49-state National Association of Medicaid Fraud Control Units, CVS Caremark Corp. has agreed to the multi-million 2000 through 2006 ettlement initiated by a whistle blower suit.

No liability was admitted, however.

The gist of the suit was that tablets of Zantac were substituted for capsules.

Here's the earl;y 2001 cost differential: Illinois Medicaid was charged $79.80 instead of $17.10 per 60 tablet prescription for a difference of $62.70.

“Switching medication from tablets to capsules might seem harmless, but when that is done solely to increase profit and in violation of federal and state regulations that are designed to protect patients, pharmacies must know that they are subjecting themselves to the possibility of triple damages, civil penalties and attorney fees,” U.S. Attorney Patrick Fitzgerald said.

Illinois state government gets $241,110. The Feds get $21 million.

Whistleblower Bernard Lisitza will receive $4,309,330.74—almost 12% of the settlement--as his share of the federal and state settlements. Pharmacist Lisitza also initiated a similar, unrelated lawsuit, settled in November 2006, against Omnicare, Inc. of Covington, Kentucky.

Assistant United States attorney Linda A. Wawzenski handled the case for Fitzgerald.

You can read the whole press release here.

Labels: Bernard Lisitza, Caremark, CVS, CVS Caremark, Linda A. Wawzenski, Medicair Fraud, Medicare, Patrick Fitzgerald, U.S. Attorney, Whistleblower, Zantac