Northern District of Illinois

CHICAGO — Twelve Chicago and area defendants were indicted on federal bank fraud charges, and five of them were also charged with aggravated identity theft, for their alleged roles in a scheme to obtain more than $1 million from counterfeit personal and corporate checks, and actually obtaining more than $700,000, by cashing the bogus checks at various local banks and sharing the proceeds among themselves.

The defendants were charged in a 37-count federal grand jury indictment that was unsealed last Thursday after the lead defendant, KENNTH PEARSON, was arrested by U.S. Secret Service agents who conducted the investigation with assistance from the Downers Grove Police Department and other suburban police departments. Pearson, 39, of Chicago, was charged with 32 counts of bank fraud and one count of aggravated identity theft. He remains in federal custody pending a detention hearing at 10:30 a.m. tomorrow before U.S. District Judge Virginia Kendall.

A co-defendant, DAVID KOTLICKY, 23, of Downers Grove, was ordered detained without bond after he was arrested on Nov. 27, 2012, on a criminal complaint, which preceded the indictment that was returned under seal last month charging Kotlicky, Pearson and 10 other defendants. Defendant ANTIONE MAHONE, 24, of Chicago, was arrested on Friday and released on bond, and an arrest warrant is outstanding for ERIC JACKSON, 24, of Chicago.

The eight remaining defendants will be arraigned on various dates this month before Judge Kendall in Federal Court.

The indictment was announced today by Gary S. Shapiro, Acting United States Attorney for the Northern District of Illinois, and Frank Benedetto, Special Agent-in-Charge of the Chicago office of the Secret Service.

According to the indictment, between August 2010 and December 2012, the defendants created hundreds of counterfeit checks, with face values totaling more than $1 million, presented them to various banks to be cashed, usually in amounts of approximately $2,500, and kept and shared the proceeds.

Defendant LATRESE LESHORE, 30, of Chicago, through her employment processing individuals’ health insurance applications and payments, allegedly stole bank customers’ authentic checks and account information by making copies at work, and providing them to a codefendant in exchange for cash, knowing that the victims’ accounts would be compromised.

The indictment alleges that Pearson, Kotlicky and Jackson then used the stolen checks and account information to create counterfeit checks. Pearson and Kotlicky then made and caused others to falsely make changes to the bank customers’ account information so that they could monitor the customers’ accounts, intercept bank employees’ questions about account activity, and prevent immediate detection of the alleged scheme.

Pearson, Kotlicky, Jackson, STACEY SANDERS, 38, of Chicago, and DEANGRIA WELLS, 27, of Chicago, allegedly recruited runners to take the counterfeit checks to branches of American Chartered Bank, Chase Bank, Citibank, Fifth Third Bank, First Midwest Bank, BMO Harris Bank, and U.S. Bank to be cashed. Those same defendants then allegedly collected proceeds of the cashed counterfeit checks from runners, paid the runners a fee for cashing the checks, and distributed the remaining proceeds to Pearson.

Also indicted were: ROGER ELAM, 48; his sister, ROSIE ELAM, 59; LYNADA MAHONE, 34, (Antione Mahone’s cousin); TOVISE STONE, 34; and STARLINDA STUBBS, 21, all of Chicago.

All 12 defendants face at least one or more counts of bank fraud. In addition, Pearson, Kotlicky, Jackson, Sanders, and Leshore were each charged with one count of aggravated identity theft, and Kotlicky alone was charged with one count of passing $80 in counterfeit currency. The indictment also seeks forfeiture of approximately $1 million from Pearson and Kotlicky.

Each count of bank fraud carries a maximum penalty of 30 years in prison and a $1 million fine. Aggravated identity theft carries a mandatory consecutive sentence of two years in prison and a maximum $250,000 fine, and passing counterfeit currency carries a maximum of 20 years in prison and a $250,000 fine. If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory United States Sentencing Guidelines.

The government is being represented by Assistant U.S. Attorney Julie Porter.

The public is reminded that an indictment is not evidence of guilt. The defendants are presumed innocent and are entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.

Indictment

ROCKFORD — A Rockford, Ill. woman pleaded guilty today in federal court before U.S. District Judge Frederick J. Kapala to having embezzled almost $200,000 from a local labor union. GRACE RATHKE, 57, Rockford, pleaded guilty to embezzling monies and funds belonging to Local 32 of the Laborers International Union of North America.

Rathke had been indicted on August 2, 2011, and charged with embezzling approximately $200,000 from Local 32. According to the written plea agreement, Rathke admitted that beginning in November of 2004 and continuing until March 2009, she had embezzled over $190,000 from Local 32, including $1,352 on September 25, 2006. In her plea agreement, Rathke admitted that she had been the office manager of Local 32. Members and apprentices of Local 32 had paid their dues and initiation fees to Local 32. As the office manager, Rathke was to enter the amounts received in the records of Local 32 and deposit the funds in the bank account of Local 32. In November of 2004, she began to secretly embezzle dues and fees from Local 32 and to use those monies for her own purposes. In so doing, Rathke failed to credit union members and apprentices with paying their dues and fees.

The guilty plea was announced by Gary S. Shapiro, Acting United States Attorney for the Northern District of Illinois, and James Vanderberg, Special Agent-In-Charge of the Chicago office of the United States Department of Labor, Office of Inspector General, Office of Fraud and Labor Racketeering Investigations, and Mary Kebisek, District Director of the Chicago office of the United States Department of Labor – Office of Labor-Management Standards.

Sentencing has been set for April 9, 2013, at 2:30 p.m. before Judge Kapala. Rathke faces a maximum sentence of 5 years in prison to be followed by up to 3 years on supervised release. Rathke may also be sentenced to pay a fine of up to $250,000 and must be sentenced to pay restitution of over $190,000 to Local 32.

The government has been represented by Assistants U.S. Attorney John G. McKenzie and Monica V. Mallory.

Plea Agreement