Complaint Filed in Rezko Land Deal

Now that the election is over the authorities can get started investigating people connected to Barack Obama.

A former Illinois bank official, now claiming whistleblower status, says bank officials replaced a loan reappraisal that he prepared for a Chicago property that was purchased by the wife of now-convicted felon Tony Rezko, part of which was later sold to next-door neighbor Barack Obama.

In a complaint filed Thursday in the Circuit Court of Cook County, Kenneth J. Connor said that his reappraisal of Rita Rezko's property was replaced with a higher one and that he was fired when he questioned the document.

Mr. Connor, a real estate and commercial credit analyst at the Mutual Bank Corp. in Chicago, also noted in the complaint that the bank received a grand jury subpoena in October 2006 requiring it to produce information concerning Mrs. Rezko's purchase, including the bank's files on the property.

The complaint also said that the grand jury wanted information on Mrs. Rezko's checking account and loan file and that the Federal Deposit Insurance Corp. (FDIC) had audited the Rezko file - although Mr. Connor's lower reappraisal had been replaced with a higher amount.

"Connor's internal whistle-blowing activity at Mutual Bank implicates Mutual Bank and the potentially guilty officers thereof to prosecution under federal and Illinois statutes," said the complaint, filed by attorney Glenn R. Gaffney.

The complaint said Mutual Bank officials could be guilty of making false statements, willfully overvaluing property, bank fraud, witness retaliation, willful violation of a lawful subpoena, FDIC violations, and state banking regulations.

Appraisal fraud is a huge problem in the mortgage industry and has led to more than one bank failure. When I worked for the old Beverly Hills Savings it was determined after that bank was taken over by the FSLIC in 1985 that the company had loaned millions on apartment buildings and other structures whose values were grossly overinflated thanks to appraisal fraud.

This is quite a two-fer today in Illinois politics, with the complaint above and the arrest of Gov. Blago for trying to sell Obama's Senate seat.