Chicago city leader with ties to Daley indicted for embezzlement
A Chicago city administrator responsible for accountability faces charges of falsifying bank loans, lying to regulators and taking a $130,000 personal loan he never repaid while on the bank’s board.
A top Chicago Department of Streets and Sanitation administrator under Mayor Lori Lightfoot with deep ties to former Mayor Richard Daley was indicted Dec. 8 in connection with a decades-long bank embezzlement scheme.
William M. Mahon, 55, is the deputy commissioner for quality control and accountability for the city department. He is charged with falsifying bank loans, lying to federal regulators and failing to disclose a $130,000 personal loan he took while on the bank’s board of directors. It was never repaid.
The 82-count indictment makes Mahon and three other suspects, including two board members of the Washington Federal Bank for Savings, the latest of 15 people charged in the ongoing investigation of the bank’s failure.
The list includes Ald. Patrick Daley Thompson, Ward 11, who awaits trial in 2022 on tax charges for filing false returns and lying to investigators about more than $200,000 worth of loans he received from the financial institution. He is the grandson of former Mayor Richard J. Daley and the nephew of former Mayor Richard M. Daley.
Authorities shut down Washington Federal in December 2017 over what they said was an embezzlement scheme in which the bank’s president siphoned off $90 million. Authorities believed bank officials gave loans to favored individuals with no expectation the money would be repaid, then filed false loan repayment reports.
The former bank president and CEO, John F. Gembara died days before federal regulators closed the bank in what was ruled a suicide. Gembara’s widow and others involved suspected foul play.
Mahon received 24 loans totaling more than $4.3 million from the bank since 1993, including three unpaid mortgages worth more than a $1 million on a three-flat he built in Bridgeport, according to the Cook County recorder of deeds.
Mahon is additionally accused of concealing rent collected from flat tenants from the Internal Revenue Service. He has maintained his $138,800-a-year post with the city amid the ongoing investigation.
Before joining Streets and Sanitation, Mahon was a longtime member of the 11th Ward Regular Democratic Organization that helped elect two Daleys as mayor. Soon after Richard M. Daley entered office, Mahon was hired as a spokesperson.
During Richard M. Daley’s administration, Mahon was suspended from his post for 45 days in connection with a rigged hiring scheme for the city’s Hired Truck Program.
In 2006, the city’s inspector general found Mahon “repeatedly engaged in personal activities” while on the clock – including attending a White Sox game. Rather than follow the inspector general’s recommendation to fire Mahon, the Daley administration put him on a 29-day suspension.