CHICAGO — Chicago Ald. Patrick Daley Thompson was convicted by a federal jury Monday of filing false tax returns and lying to federal regulators about a line of credit he had with a failed Bridgeport bank.
After a weeklong trial, the jury deliberated about 4 1/2 hours before finding Thompson guilty of two counts of making false statements with the intent of influencing debt collection efforts and five counts of filing tax returns that falsely claimed mortgage-interest deductions.
Thompson, dressed in a dark suit and red tie, sat quietly at the defense table as he waited for the jury to enter the courtroom, appearing to rub his right temple with his hand. He stood when the verdict was announced, keeping his hands folded in front of him and showing no outward reaction.
In the overflow room next door, several members of Thompson’s family wept at the verdict, some standing and holding hands. In the hallway outside the courtroom, the alderman’s daughter could be heard crying as she hugged a supporter.
The counts of lying carry up to 30 years in prison, while the tax charges each carry a maximum of three years behind bars. Thompson could also be eligible for probation.
Under state law, Thompson must immediately resign his seat in the City Council due to the conviction on felony charges. Mayor Lori Lightfoot will have 60 days to appoint someone to fill the post for the rest of Thompson’s term.
In their closing arguments Monday, prosecutors told the jury Thompson is a sophisticated lawyer who decided to lie to federal regulators about the line of credit to get out of paying back the full amount of his debt.
Thompson’s attorney, meanwhile, began his closing by emphasizing a certain political surname and saying prosecutors were bent on finally nailing a Daley.
“It shows you just how desperate the government is to convict Patrick Daley Thompson,” attorney Chris Gair say, raising his voice an octave as he said the Daley name. “This case is full to the brim and overflowing with reasonable doubt.”
Thompson, 52, the grandson and nephew of Chicago’s two longest-serving mayors, is charged with falsely claiming mortgage interest deductions on his tax returns and repeatedly lying about lines of credit he received from Washington Federal Bank for Savings, which was shut down by federal regulators in late 2017.
After about three hours of closing arguments in U.S. District Judge Franklin Valderrama’s courtroom, the jury of eight women and four men began deliberating at about 12:45 p.m.
In her closing remarks to the jury, Assistant U.S. Attorney Michelle Petersen told the jury that Thompson knew exactly what he was doing when he tried to hide the full $269,000 in principal and interest he owed.
“When he saw the opportunity to lie, to deceive, to pay less than what he owed, he took it,” Petersen said. She said he told his lies in a way that gave him “plausible deniability” when caught.
When Washington Federal failed, Thompson came up with a plan to deceive his new lender, Planet Home Lending, by telling them he only borrowed $110,000 and feign ignorance on the rest, Petersen said.
She played a recording of the call the jury heard last week, noting how Thompson was clearly pressing Planet Home to accept his word on what he owed so they wouldn’t find the other loans he received.
“He’s urging them to resolve this quickly,” the prosecutor said. “He knows if he can get them to hurry up they might not dig any deeper.”
After receivers for the FDIC confronted Thompson with evidence that he’d taken advances of $20,000 and $89,000 from Washington Federal in 2013 and 2014, the alderman acted surprised, Petersen said.
“That’s part of the act, ladies and gentlemen,” Petersen said. “Lie until you get caught, and when you get caught, act surprised, act confused.”
Petersen wrapped up her remarks with the day in December 2018 when federal agents confronted Thompson at his Bridgeport home and served him with a subpoena as part of an official criminal investigation into Washington Federal’s collapse.
Thompson, a commercial real estate lawyer at a major Chicago firm, undoubtedly knew the subpoena was serious business and that he could be in trouble.
“They’re asking because you’re in tax trouble, and he knew it. He absolutely knew it,” Petersen said. She said he took a few days and hatched a plan to call his accountant and play dumb. He later filed amended tax returns that no longer included the false mortgage interest payments.
Gair, however, said there was absolutely no evidence of a scheme on Thompson’s part and accused Petersen of making it up out of whole cloth.
“There is a wide gulf, a chasm between lying and making a mistake,” Gair said. “We all make mistakes. If it were a federal crime to make a mistake then we’d all be guilty.”
Gair said the case comes down to an honorable man “who made a mistake and got a whopping $3,000 a year less on taxes due and owed.”
“And when he found out about it, he fixed it,” Gair said. He also reminded jury that even the FDIC receiver who contacted Thompson about his debt after Washington Federal was taken over testified at trial last week that he didn’t think the alderman “realized how much he’d borrowed.”
“So what are we doing here?” Gair shouted in court. “Not guilty! Reasonable doubt!”
Gair has sought to pin the blame on the bank and its former president, John Gembara, saying Thompson had nothing to do with generating the erroneous tax forms that wound up on his returns. Gembara was found hanged in the home of a customer days before the bank was shuttered, and his death was ruled a suicide.
The defense team has also portrayed Thompson as an honest but “frazzled” man, constantly torn between his duties as alderman, commercial real estate lawyer and father, and admittedly lacking when it came to focusing on the minutiae of his taxes.
In rebuttal, Assistant U.S. Attorney Brian Netols seized on Gair’s accusation that Thompson was targeted because he’s a Daley relative.
“Nobody targeted this defendant. He did what he did,” Netols said. “He committed all the conduct that he’s charged with before we even interviewed him for the first time. ... No one is so big, no one is so important, that they can’t be held responsible for their criminal conduct.”
Netols says Thompson is arguing that everything is someone else’s fault, from the bank to his accountant, and including even the voters, who “are at fault because they elected him.”
That comment brought a loud objection from Gair, which Valderrama sustained.
Thompson is the first sitting Chicago alderman to face a federal jury since then-37th Ward Ald. Percy Giles was convicted in 1999 with taking bribes as part of the Operation Silver Shovel probe.
Unlike with Giles, the charges against Thompson have nothing to do with his position as an elected official, though his membership in one of Chicago’s most storied political dynasties has put a dash of pizazz into what otherwise was a routine tax case.
In the pantheon of big criminal cases brought in U.S. District Court, the charges against Thompson are fairly low-grade, with the total tax loss to the IRS estimated by government witnesses as about $15,500. Even if he’s convicted, there is a good chance Thompson would be in line for probation rather than any prison time.
But Thompson’s status as an elected official significantly ups the stakes for both sides.
An acquittal would be a stinging blow for the U.S. attorney’s office in a building where the office virtually never loses cases brought against politicians. Most end in guilty pleas before ever going to trial.
Meanwhile, a conviction on any of the seven felony counts in the indictment would force Thompson’s immediate resignation from the council. Mayor Lori Lightfoot would then get to choose his replacement for the rest of the term that ends in 2023.
Should that happen, Lightfoot would have a great deal of leeway on how to proceed with the selection, but would undoubtedly want to at least give the impression she’s taking community input.
The pick would take on even more importance because the incumbent gets a political advantage in name recognition and likely in fundraising and organizing when running for reelection to a full term next year. Lightfoot would also have a chance to potentially add a solid ally to the restive council, where Thompson has been something of a wild card.
If that scenario plays out, it could have a lasting effect. After Giles’ conviction, then-Mayor Richard M. Daley, who is Thompson’s uncle, appointed little-known city employee Emma Mitts to fill his seat. Mitts is now in her 23rd year on the council.
While the case is fraught with political ramifications, in court the evidence in Thompson’s trial was decidedly nonpolitical, though the jury is well aware of his status as an alderman.
Before they were even selected, the eight women and four men on the jury first had to answer a questionnaire that identified Thompson as a city official and probed their knowledge of the Daley family and its politics.
Those picked to serve on the jury included an IT professional, a customer service representative and part-time music teacher, an EMT, a sales associate at a furniture store, a high school teacher, a physical educational instructor, a rail car cleaner and a shipping manager at a dental center.
Over the course of four days of testimony, the jurors saw dozens of pages of Thompson’s tax and loan records and heard often-repetitive explanations of their meaning. At one point late in the week, after he apparently noticed attention waning, Valderrama had to remind certain members of the jury to pay attention to the evidence.
But the trial was not without its dramatic moments. During the second day of testimony, the judge threatened to hold a key government witness in contempt after he was overheard talking about his testimony with other upcoming witnesses during a lunch break — a flagrant violation of the court’s orders.
On Thursday, jurors for the only time in the trial got to hear Thompson’s voice when prosecutors played a recorded telephone call he had with a lender after the Federal Deposit Insurance Corp. takeover of Washington Federal where he disputed the amount they said he’d borrowed.
“I signed a promissory note ... for $100,000 in 2011,” Thompson said on the February 2018 call. “I have no idea where the 269 number comes from. ‘Cause this doesn’t match with anything that I have.’”
The call was played during the testimony of Jacob Evans, an FDIC special agent who confronted Thompson at his Bridgeport bungalow on the morning of Dec. 3, 2018, about 10 months after the alderman first disputed his debt with Planet Home Lending.
Evans told the jury it was cold when he and his partner arrived around 8:15 a.m. and saw Thompson’s car warming up in the driveway. He answered a knock at the door, and after they identified themselves, Thompson invited them into the immediate entryway, he said.
They talked about his loan with Washington Federal before they served him with a subpoena to testify before a federal grand jury probing the bank’s collapse, Evans said. A copy of the subpoena shown to the jury demanded tax, property and mortgage records pursuant to an official criminal investigation.
On cross-examination, Gair referred to the agents’ confrontation with Thompson as an “ambush interview” designed to catch the alderman off guard.
“That’s a pretty intimidating circumstance, to have two armed federal agents show up on your doorstep unannounced, isn’t it?” Gair asked.
On Friday, the defense called a series of character witnesses to bolster the argument that Thompson is a big thinker but prone to overextending himself between his aldermanic and professional duties.
Among them was Marc Davis, a longtime NBA referee who grew up with Thompson and his older brother on Chicago’s South Side, a partner in his law firm, a Catholic priest, and a colleague on the South Loop Chamber of Commerce.
Robert Gamrath, a colleague of Thompson’s at Burke, Warren, MacKay & Serritella PC, called Thompson a great strategic thinker who gets easily bogged down or distracted by details.
Gamrath said Thompson was also “probably the most overscheduled person I have ever met,” always running from meeting with police, business owners and constituents in his ward to attending committee meetings and City Council hearings downtown.
“Throw in on some days, (he) stops at a wake,” Gamrath said before prosecutors cut him off with an objection.
On cross-examination of each of the witnesses, prosecutors pointed out that none of them helped Thompson prepare his taxes or knew any details of the allegations against him.
Assistant U.S. Attorney Brian Netols asked Gamrath a series of rapid-fire questions about Thompson’s legal and political experience, noting that as a commercial real estate lawyer and an alderman, Thompson’s attention to “fine print” would be crucial.
“You know he’s on the Finance Committee, right?” Netols asked. “He makes decisions that affect all the pocketbooks of everyone in the city?”
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