A former asset manager for the Cook County Land Bank Authority was sentenced Friday to a year in prison for running a five-year scam in which he used straw buyers to secretly buy six abandoned homes from the agency so he could fix them up and resell or lease them at a profit.
Mustafaa Saleh, 37, resigned from the county government agency in June 2019 and pleaded guilty to wire fraud last March.
In May 2021, a federal grand jury subpoenaed records from the agency on 24 properties, including an abandoned hotel in Harvey and other properties overseen by Saleh, and land bank contractors he secretly owned.
As an asset manager for the land bank, Saleh knew that employees were barred from buying any of the agency’s properties and reselling them. So Saleh had phony buyers buy four homes in Chicago, one in Midlothian and one in Oak Lawn and rehabbed them with another company he secretly owned. Then, in his government post, he certified that the work had been done so the homes could be resold.
After subtracting the costs for buying and repairing the homes, prosecutors say Saleh, who was paid $75,000 in his county job, made $172,706 in profits on the homes. He must repay that amount as restitution.
“Mr. Saleh carried out a complex fraud over several years,” U.S. District Judge Andrea Wood said in sentencing him to a year and a day in prison. “It involved other people. It required setting up companies that weren’t what they seemed to be. This was not a crime that was an accident. Mr. Saleh understood exactly what he was doing.”
“I know what I did was wrong,” Saleh told the judge. “I know I tarnished the reputation of the CCLBA, and I’m sorry. ... I tarnished my reputation. I shamed myself. I can’t change the past, but I can change my future.”
The Cook County Board, led by President Toni Preckwinkle, established the land bank in January 2013 to redevelop houses and other abandoned property whose owners have stopped paying real estate taxes and let the buildings fall into disrepair, blighting neighborhoods on the South Side and the West Side and in nearby suburbs.
The land bank’s board, headed by Cook County Commissioner Bridget Gainer, takes ownership of a tax-delinquent property, then wipes out the unpaid taxes to make it cheaper for someone to buy it. Any buyer must agree to fix up the property. The aim is to improve neighborhoods and get the taxes once again coming in.
The land bank has been mired in controversy since June 2019, when the FBI raided the offices of then-Ald. Carrie Austin, after which the Chicago Sun-Times revealed her chief of staff Chester Wilson’s dealings with the land bank. Wilson owed more than $200,000 in property taxes and interest on a building he donated to the land bank, which wiped out the tax, then sold it to Wilson’s former partner for $40,000. Austin and Wilson have been charged with bribery.
The Sun-Times later reported that the land bank had sold two vacant lots to a drug dealer who was under federal indictment and rejected higher bidders when it sold an Oak Lawn home to the assistant of the land bank’s then-executive director Robert Rose Jr.
Saleh, a father of three from Woodridge, was charged in November 2022 as part of an ongoing investigation that includes an October indictment accusing Carl Fioravanti of falsifying records on the asbestos his company removed from the Harvey hotel. Fioravanti had been hired by KLF Enterprises, owned by James W. Bracken III, whom the land bank hired to demolish the former Holiday Inn.
The grand jury indicted Riverdale Mayor Lawrence Jackson in November, charging him with perjury and obstruction of justice related to a lawsuit filed over his decision to dump the suburb’s garbage-hauler in favor of Bracken’s company. Jackson said in a sworn deposition that he didn’t know Bracken, but investigators found Bracken helped run a trucking business Jackson and his wife owned.
The Sun-Times has reported that federal officials are examining Bracken’s ties to William M. Mahon, a former deputy commissioner in the city of Chicago Department of Streets and Sanitation who also was a board member of Washington Federal Bank for Savings, a crooked Bridgeport bank that federal regulators shut down in 2017 over a massive embezzlement scheme.
A longtime member of the Daley family’s 11th Ward Regular Democratic Organization, Mahon is one of 16 people indicted after the bank failure. Fourteen have been convicted. Mahon retired from City Hall and pleaded guilty in the bank collapse. He faces up to eight years in prison when he’s sentenced next month.
A year before the bank closed, Bracken listed Mahon as a reference to win a $61.7 million contract to lease dumpsters for City Hall’s street-sweeping program, which Mahon oversaw.
