Fil-Am Chicago judge found guilty of $1.4M mail, bank fraud scheme

by Joseph G. Lariosa

CHICAGO (JGL) – Jessica Arong O’Brien, the first Filipino American Cook County elected judge, was found guilty on two counts of mail, and bank fraud involving $1.4M scheme on Thursday, Feb. 15, at the Northern District Court of Illinois. A 12-person jury, dominated by women, handed the verdict after deliberating for four hours in two days Wednesday (3 p.m. to 5 p.m.) and then on Thursday (9:15 a.m. to 11:30 a.m.)

Sentencing is set for July 6, 2018. Conviction of either count carries a penalty of not more than 30 years and a fine of not more than $1-M.

O’Brien’s lawyer, Ricardo Meza, said after the verdict he is going to file a motion for a new trial without elaborating.

O’Brien, 50, was stunned by the verdict as she bowed while her husband, Judge Brendan A. O’Brien also of Cook County, and their daughter, Samantha Theresa, 20, and other supporters were motionless as Judge Durkin announced the jury’s findings after a six-day trial.

Two days before the verdict, O’Brien filed a motion for judgment acquittal, saying the “Government failed to present sufficient evidence to sustain a conviction of either the mail fraud or bank fraud charges.”

Although Judge Thomas M. Durkin reserved his “decision until the close of evidence” on the motion, he declined to make a ruling and let the jury decide on the motion for judgment acquittal.

Both charges relate to the same four transactions, which the government has alleged is a scheme to defraud lenders, dating from 2004 and 2007. The charges stemmed from two investment properties which O’Brien purchased and later sold long before she became a Cook County judge.

In 2004, when O’Brien purchased 625 W. 46th St. Chicago property, the Government said she overstated her income, failed to disclose a liability, and misrepresented her intention to live in the property as her primary residence.

In 2005, the Government also alleged that she misrepresented she was employed only by O’Brien Realty, LLC. She was actually employed by both O’Brien Realty and the Illinois Department of Revenue (IDOR), and that she overstated her income on the application.

In her 2006 application for Commercial Line of Credit, the Government alleged that she misstated O’Brien Realty’s annual revenue and profit.

The following year, when the 625 W. 46th St. and 823 W. 54th St., Chicago properties were sold, the government alleged that she, along with co-defendant Maria Bartko and an unindicted “straw buyer” Christopher Kwan, agreed to conceal Bartko as a buyer on loan documentation submitted to lenders. O’Brien also failed to disclose checks written by her to Bartko in connection with the sale of the properties. O’Brien also falsely represented that Kwan intended to live in the properties as his primary residence and falsely overstated his income.

In her motion for judgment acquittal, O’Brien argued that in order for a defendant to be convicted of mail fraud, the Government must prove: “(1) a scheme to defraud; (2) an intent to defraud; and (3) use of the mails or wires in furtherance of the scheme.”

O’Brien added that in order for a defendant to be convicted of bank fraud, the Government must prove (1) that the defendant knowingly executed or attempted to execute a scheme to defraud a financial institution; (2) that the defendant did so with the intent to defraud; and (3) that the financial institution was insured by the FDIC (Federal Deposit and Insurance Corporation).

To prove intent to defraud in both mail and bank frauds, O’Brien said that the Government must prove a “willful act by the defendant with the specific intent to deceive or cheat, usually for the purpose of getting financial gain for one’s self or causing financial loss to another.”

O’Brien said that in both mail and bank frauds on loan applications, her “signature appears exactly the same in multiple exhibits, evidencing that she did not sign the applications but rather the applications were copied with her signature already on them.”

“No scheme” 

According to O’Brien, “evidence” reveals that “there was no scheme between Bartko and Ms. O’Brien.” Bartko was O’Brien’s real estate partner when they refinanced their mortgage and commercial loans from lenders between 2004 to 2007 when O’Brien was not yet a Cook County judge. Bartko had earlier pleaded guilty in a plea agreement but did not testify during O’Brien’s trial. She is awaiting sentencing.

O’Brien added there was no scheme at all based on “duplicity” ground since each of the four transactions are “separate transactions which do not relate to one another and the only common denominator is O’Brien’s ownership of the properties. This is not enough for a rational juror to conclude that any scheme even existed.”

Had the four transactions were deemed separate, the case would have been dismissed on statutory limitation grounds as they were filed after five years of the occurrence.

Her lawyer argued that when she filed the loan applications, they were just mistakes that “do not rise to the level of specific intent which the Government is required to prove. When reporting her income and financial affairs none of it was intentional. Mistakes are not fraud. Whatever Jessica did, it was always done in good faith. If she made a mistake, she’s no different than anyone else.”

Jessica made $325K from scheme 

The Government said that in all the transactions, O’Brien made of at least $325,000. She also caused losses to lenders after the straw purchaser (Kwan) defaulted on payments and the properties wound up in foreclosure. Assistant U.S. Attorney Matthew Madden said, “She used lies to buy and sell these properties.”

Meza said the Government overstated the loss.

In 1989, bank fraud violation (18 U.S.C Sec. 1344) imposes “not more than $10,000 or imprisonment of not more than five years or both.” In 1990, imprisonment was raised to 20 years “with the unspecified amount” and/or both and the statute of limitation was pegged at five years.

But on May 20, 2009 when President Obama signed the Fraud Enforcement and Recovery Act of 2009 (FERA) if the violation “affects a financial institution,” then the punishment is raised to a fine of not more than $1-M and/or up to a 30 year prison sentence and the statute of limitation was extended to 10 years. A “financial institution” under the law is like a bank guaranteed by the Federal Deposit Insurance Corporation.

O’Brien was born in Cebu City in the Philippines and immigrated to the United States after high school. She received her Bachelor of Science in Hotel & Administration and a minor in Financial Management from Boston University. She took up advanced training in culinary arts education at Ecole Hoteliere de Lausanne, Switzerland and received her intensive Diploma from the original Cordon Bleu Cookery School in London.

In 1998, she earned her JD/LL.M degrees (Taxation) from The John Marshall Law School in Chicago with the distinction as the first student to complete both degrees in just three years. In 2002, she received her second LL.M. degree (Employee benefits) with honors from the same school also.

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