Bassam Hajyousif, 44, of Oak Park, entered a plea of guilty today in U.S. District Court for defrauding a bank of approximately $48.8 million dollars.
A co-defendant, Romel Esmail, is a fugitive and is believed to be living outside the United States.
Hajyousif and Esmail were accused of defrauding CIB Bank, formerly of Hillside, for two failed condominium conversion projects in Chicago's Loop between 1999 and 2003.
According to Hajyousif's guilty plea, he and Esmail used CIB Bank to lend them funds to purchase and convert two properties—at 6 N. Michigan Ave. and 59 E. Van Buren—by falsely representing their sale price, their equity in the projects, and how the loan would be used, according to a press release from the U.S. Department of Justice.
The buildings were to be converted from offices to condominiums.
Hajyousif admitted that he and Esmail submitted a fraudulent purchase agreement, contract and closing statement showing an inflated purchase price of more than $17 million for the building on Michigan Avenue for a loan of $13 million after the bank told them they would only loan the men 70 percent of the purchase price.
After the property was purchased, they applied for a $30 million construction loan. The bank instead extended $8.5 million in "mezzanine loans" to pay for expenses before the construction loan could be approved.
Hajyousif admitted that the men instead used these funds on unrelated costs and expenses, including the purchase of a building at 59 E. Van Buren. They also used the money to fund Esmail’s purchase of a car and jewelry, to make deposits into a brokerage account in Esmail’s name and to purchase stock of CIB Marine Bancshares by an entity they both controlled.
Between June and August of 2000, the men applied for another $8 million loan from CIB to purchase the property on East Van Buren by falsely representing the purchase price at $13 million.
In 2001, they obtained the construction loan from the bank, which would eventually total $48.3 million, to complete construction and repay loans. Between June 2001 and September 2003, Hajyousif and Esmail obtained 14 separate “draws” from the bank by submitting false owner records and contractor statements.
CIB Bank eventually lost about $500,000 on the loan for the East Van Buren building and the entire $48.3 million loan for the building at 6 N. Michigan Ave.
Hajyousif currently remains free on bond as he awaits a sentencing hearing scheduled for Feb. 20, 2013.
Bank fraud carries a maximum penalty of 30 years in prison and a $1 million fine, however, according to Hajyousif's plea agreement, the government will request a sentence of 81 months in prison based on Hajyousif's continued cooperation.