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John Thomas leaves Dirksen Federal Building after being indicted for allegedly stealing $370000 from Village Riverdale tax increment financing funds

John Thomas leaves the Dirksen Federal Building after being indicted for allegedly stealing $370,000 from the Village of Riverdale in tax increment financing funds connected to the development of Riverdale Marina. | Richard A. Chapman/Sun-Times

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 Indictment of John Thomas

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Updated: May 20, 2014 6:08AM



Smooth-talking felon John Thomas once said the thing he loved about Chicago was, it was “the most forgiving” place for a convicted crook.

He’d better hope so.

The 51-year-old real estate developer — who got a second chance at life and dodged a prison term by wearing a wire against disgraced political fundraiser Tony Rezko as well as former Ald. Ike Carothers — has been up to his old tricks, federal prosecutors say.

Arrested at dawn on Good Friday at his downtown condo, Thomas stole $370,000 from the south suburban village of Riverdale that was meant for the development of Riverdale Marina, a federal indictment alleges.

But that was just the beginning of Thomas’s latest scams, according to prosecutors who painted him as a compulsive con artist who recently even tried to rip off his former attorney by paying him with fake Babe Ruth baseballs.

Thomas — who pleaded not guilty to the Riverdale plot Friday — had been convicted of a billboard business fraud in New York, but was spared prison time in 2010 after he cooperated with the government for more than a decade, playing a key role in bringing down Rezko.

Despite his shady past, and a string of controversial failed real estate deals, he was able in February 2012 to convince the Riverdale Village Board that he was the man to redevelop the blighted Riverdale Marina with the help of $900,000 in tax-increment financing funds.

In a passionate speech, he vowed no crime would occur on his watch, choking up as he told residents: “I have a 5-year-old daughter and I want my daughter to come here. I want my family to come here.”

Days after securing the funds, he was lining his pockets, the indictment unsealed Friday alleges. A cast of politically-connected felons also benefitted, sources say.

Thomas’s landlord Raghu Nayak — the convicted healthcare fraudster and political fundraiser who allegedly offered former Gov. Rod Blagojevich a $1.5 million bribe to appoint Jesse Jackson Jr. to the Senate — allegedly got $8,250 in rent he was owed, disguised as payment for “plumbing work” at the marina that he never did.

And Regina Evans — the former Country Club Hills Police Chief, convicted of state grant fraud and linked to several other scams — and her husband both got jobs at the marina, sources say.

Using fake invoices, Thomas stole more than a third of the TIF money he had access to, using it to pay legal fees, personal loans, and other personal expenses including his rent, the feds allege.

Assistant U.S. Attorney Sunil Harjani on Friday urged U.S. District Judge James Zagel to keep Thomas locked up, calling him a “threat to the public” who perpetrated five more scams even after he was first confronted by the government about the marina. Those scams included filing false documents to obtain loans, and the Babe Ruth baseball swindle, Harjani alleged.

But Thomas’s current attorney, Larry Beaumont, said Thomas had been “negotiating” with prosecutors for months without attempting to flee or cover his tracks.

And Zagel eventually allowed Thomas to go home on bond, once Thomas turned over his cell phone and laptop and vowed to have no contact with the outside world while under around-the-clock house arrest.

Thomas’s wife, who vouched for him, told the judge she’d have “no problem” reporting him if he violates the terms of his bond.

News of Thomas’s arrest was welcomed by Riverdale Mayor Lawrence L. Jackson, who alleged his predecessors had “full knowledge of Mr. Thomas’ background and analysis of his financial affairs, (but) made irresponsible decisions to advance their own personal interest.”

Former Mayor Deyon Dean, whose administration presided over the marina fiasco but also sued Thomas in 2012, accusing him of fraud, denied that. “We tried to work with Mr. Thomas in good faith,” he said. “He was a convicted felon, but he had purchased a business, and we thought we could move forward with him.”

The usually silver-tongued Thomas — who faces up to 20 years in prison if convicted on each of three counts of wire fraud — had little to say for himself as he left court Friday, calling the case against him “bulls---.”

But in a 2008 interview with the Sun-Times, Thomas said his life had become “frantic” as he amassed hundreds of hours of recorded conversations for federal investigators while trying to maintain his real estate business.

For a time, Thomas helped investigators build a record of repeat visits by then-Gov. Rod Blagojevich to the old offices of Rezko and former business partner Daniel Mahru’s Rezmar Corp.

Thomas said that he was grateful that hard work had allowed him to rebuild his name in Chicago.

During that interview, he handed a reporter his business card. Written on the back, in eight languages, were the words: “When life hands you lemons, make lemonade.”



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