Former Ald. Patrick Daley Thompson, a member of Chicago’s most famous political family, has begun serving a four-month prison sentence for lying to banking regulators and filing false income tax returns in a case involving the failed Washington Federal Bank for Savings in Bridgeport.
The Bridgeport Democrat, who represented the 11th ward in the City Council, had been ordered by U.S. District Judge Franklin Valderrama to report to the federal Bureau of Prisons by this past Monday when he was sentenced in July.
Prison records confirm Thompson is now in custody at a medium-security facility in Oxford, Wis.
Thompson’s attorney, who couldn’t be reached for comment, has said Thompson hopes to complete his sentence by Christmas.
Oxford has long been the favored destination of Chicago politicians because of its more relaxed, minimum-security setting and proximity to the city. It is located about 230 miles north of Chicago.
From the outside, the building looks more like a suburban community center than a prison. There are tennis courts and areas for softball, volleyball and basketball nearby.
Former U.S. Rep. Dan Rostenkowski, who served a sentence there after pleading guilty to corruption charges in 1996, later referred to it as “the university.” Others have dubbed it “Club Fed,” although prison officials have disputed that moniker.
In February, a jury found Thompson guilty of two counts of lying to federal regulators and five counts of filing false income tax returns.
Thompson is the grandson of the late Mayor Richard J. Daley and nephew of former Mayor Richard M. Daley, Cook County Commissioner John Daley and William Daley, a former commerce secretary who also was chief of staff to President Barack Obama.
The case against Thompson stemmed from the continuing federal investigation of the failure of Washington Federal, which the government shut down in December 2017 for massive fraud days after the man who headed the bank and was its chief shareholder, John F. Gembara, was found dead in Park Ridge in the main bedroom of a bank customer’s $1 million home.
While investigators unraveled what they’ve described as a multimillion-dollar embezzlement scheme involving Gembara, they also discovered that Thompson got $110,000 from Washington Federal in November 2011, $20,000 in March 2013 and $89,000 in January 2014 — and made only one payment, of $389.58 in February 2012, toward repaying.
Thompson paid no interest but claimed deductions on his federal income taxes for mortgage interest purportedly paid to the bank for the years 2013 through 2017. He also lied in early 2018 about how much he borrowed when questioned by two contractors for the Federal Deposit Insurance Corp., which was trying to recover the money he borrowed.
Thompson ended up settling the debt with the FDIC in December 2018, records show, repaying just the principal amount he’d borrowed, $219,000. He also filed amended tax returns.
His lawyer blamed Thompson’s accountants at the firm Bansley & Kiener for the wrongly claimed deductions and argued that Thompson was too busy and frazzled to notice them.
In addition to his prison sentence, Thompson also was ordered to pay $8,395 in restitution to the IRS and $50,120 in restitution to the FDIC.
Thompson was the first Chicago City Council member in more than two decades to have gone to trial in a criminal case and the only member of the Daley family to have gone to trial on criminal charges. His cousin Richard J. “R.J.” Vanecko pleaded guilty in 2014 to involuntary manslaughter, admitting he threw a punch that caused David Koschman’s death a decade earlier.
Contributing: Jon Seidel
