The lawyer and developer at the center of a embezzlement scandal at a bankrupt bank in Bridgeport has a long, tangled history with City Hall and major political actors, according to city files and court documents.
Chicago attorney and developer Robert M. Kowalski is accused of embezzling at least $ 31 million from the Washington Federal Bank for Savings, which had operated in the Daley family’s political fief for generations.
Under Mayor Richard M. Daley, Kowalski was allowed to buy part of a park in Chicago to expand the courtyard of a house he was building in Little Italy.
Daley’s son Patrick struck a deal to buy a three-bedroom apartment from Kowalski while Kowalski urged city officials to approve a drive-through facility for the bank. The deal later failed.
And Kowalski hired the law firm Ald. Edward M. Burke battles property valuations for a building in the Fulton Market neighborhood. Prosecutors allege the construction was part of a plan to steal money from the bank of Kowalski’s longtime friend, John F. Gembara. Gembara was found dead in a customer’s bedroom 12 days before the bank closed in December 2017.
Former city council law firm, Klafter & Burke, Kowalski has received two separate tax cuts totaling $ 14,266.
“If Klafter & Burke hadn’t helped, I would never have been able to own this building for so long,” wrote Kowalski in a two-page letter he sent from his cell in the Metropolitan Correctional Center. While Burke has been separately charged with political corruption, he has not faced any allegations of misconduct related to the Fulton Market building.
Ashlee Rezin / Sun Times file
Kowalski, 59, is unavailable to speak about his town hall deals.
He has been in solitary confinement for weeks, furiously trying to persuade a federal appeals court to restore his loan, while pleading with the Illinois Supreme Court to overturn an order in February suspending his lawyer license on charges of embezzlement and bankruptcy fraud did what led to the collapse of the bank.
It was an unusual decision by the Supreme Court that usually disciplines attorneys only after they have been convicted of a crime.
Kowalski filed a petition with the Supreme Court asking why they didn’t also suspend the legal licenses of two Chicago city councilors going before a federal court – Ald. Patrick Daley Thompson, a nephew and grandson of the city’s longest-serving mayors, accused of lying to regulators about his loans from the bankrupt bank, and Burke, who is accused of soliciting legal work from companies applying for city permits.
“This court is not allowed to play political favorites among lawyers under the law. Because of the public trust placed in them, the lay judges are clearly a greater threat to the community than Robert ever did, ”Kowalski wrote to the Supreme Court in May, referring to himself in the third person.
It’s unclear whether the Supreme Court is considering suspending Burke or Thompson. Burke’s wife, Anne B. Burke, presides over the Illinois Supreme Court. She abstained from the vote on Kowalski’s suspension. She didn’t reveal why or if it had anything to do with her husband’s legal work on the Fulton Market building.
So far, 11 people – Kowalski, his sister, Jan Kowalski, Thompson, five bank officials, and three contractors – have been charged in connection with the Washington Federal collapse. More people are expected to be charged in the coming weeks.
After the dismissal of a senior bank official in 2017, federal regulators discovered a year-long embezzlement plan at the neighborhood bank founded by Polish immigrants in 1913. Early investors included Joseph Gembara, whose son Emil Gembara and grandson John Gembara would eventually run the bank.
The bank’s chief suspended John Gembara on November 28, 2017. Five days later, he was found dead in a chair with a rope around his neck in the Park Ridge bedroom of Marek Matczuk, a contractor charged with embezzlement. Gembara’s death has been classified as a suicide, although his widow and others have questioned whether he was murdered.
The state insurance program known as the Federal Deposit Insurance Corporation has allocated approximately $ 90 million to cover the bank’s losses while investigators try to get millions back from Kowalski and others.
Kowalski claims he is innocent. “I couldn’t legally have conspired with this banker,” he told District Court judge Virginia Kendall last month. “I was his lawyer. I was his bank’s lawyer. “
Kowalski has asked the judge to order the exhumation of Gembara’s body and also suspects a foul play.
“Please exhume this man, something is wrong. He didn’t die of suicide. I’ve known him for more than 30 years. He was a good man to some extent. And there is an inherent fraud and an inherent murder that is at the center of this case, Judge, ”Gembara said.
While the Kowalski case has moved into the public spotlight, he has been a behind the scenes player at City Hall for years.
Unplanned plot of land bought from the town hall
Kowalski was 30 years old in May 1992 when he made a deal with the Daley government and paid $ 15,924 for a vacant lot on Lock Street’s 3000 block, according to documents signed by City Hall’s asset manager Cosmo Briatta . Briatta is the brother-in-law of the Mayor’s brother, Cook County Commissioner John P. Daley.
Kowalski and his brother William received a $ 65,000 loan from Washington Federal, built a house, and sold it eight months later for $ 128,000.
On city and bank papers, the Kowalskis recorded their address in a Bridgeport warehouse that had a mortgage from Michael DiFoggio. DiFoggio was a plumbing company that later worked on projects funded by Washington Federal, including buildings owned by Kowalski and others indicted in the bank’s collapse.
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Michael DiFoggio leaves the Dirksen federal building in July 2012.Sun Times file
DiFoggio is closely associated with the neighborhood. His father founded the Old Neighborhood Italian American Club with gang boss Angelo “The Hook” LaPietra. DiFoggio later became an FBI mole and helped federal prosecutors convict former Cook County Commissioner Joseph Mario Moreno and the former Ald. Ambrosio Medrano in 2013.
A few weeks after those convictions, DiFoggio was found dead from a gunshot wound to the head in his plumbing office near Sox Park. His death was counted as a suicide.
Adding to a side courtyard
Kowalski made another deal with Daley’s City Hall in December 1995 and bought a piece of Garibaldi Park in Little Italy to expand the side courtyard of a two-story house he was building on the 1500 block on Polk Street. The house was around the corner from Oscar D’Angelo, a buddy of Daley’s and the unofficial mayor of the neighborhood, who campaigned for the park.
City Hall owned 1.7 acres of Garibaldi Park and agreed to trade it for a tiny 7.5-foot by 25-foot portion of the park to the park district. City hall then sold that strip of land to Kowalski for $ 4,900, according to documents signed by Briatta.
Take care of the mayor’s son
Kowalski, who calls himself “Bob the Builder,” bought a three-bedroom apartment in Little Italy in the fall of 1997 for $ 200,000. He made a deal to sell it to Mayor Daley’s son Patrick, but it fell apart in late 1999 after D »Angelo tied up a hoist from the nearby University of Illinois in Chicago to help Kowalski clean up the building. Neighbors complained, Daley’s son canceled his purchase agreement for the building, and a rift developed between the mayor and D’Angelo.
“That story still hurts,” wrote Kowalski in a letter to the Sun-Times.
Kowalski said Gembara’s bank would lend money to the mayor’s son to buy the building.
Daley and his son, who were not accused of wrongdoing, were unavailable for comment.
Kowalski eventually converted the building into three condominiums and sold them for $ 1.1 million.
Pushing for a bank drive-thru
While rehabilitating the three-room apartment for Daley’s son, Kowalski also served as an attorney for Washington Federal, who wanted to open a thoroughfare in the bank’s office at 2869 S. Archer.
The bank’s neighbors and then Ald. James Balcer (11th) opposed the plan because it would have turned a one-way street into a two-way street. Kowalski appealed to the city’s Board of Appeal, but dropped the case in December 1999 for no reason. The move took place shortly after the mayor’s son terminated his contract with Kowalski.
Instead, Gembara bought the building next to the bank and commissioned Kowalski’s brother to demolish it in 2001 so they could build an annex with a passage that would not disrupt the flow of traffic.
Listing for Fulton Market District
Kowalski, his brother, and Gembara used a Bridgeview Bank trust in October 2004 to pay $ 6 million for 13 lots in one square block on Halsted and Lake Streets, the heart of what is now the bustling Fulton Market District, the company said Accusation.
As part of a complicated plan, the indictment states that Robert Kowalski and Gembara used the property to embezzle Washington Federal funds.
Kowalski used Burke’s law firm to appeal property taxes on the historic building at 845 W. Fulton Market in 2007 and 2008.
Burke and his criminal defense attorney Joe Duffy returned no messages.
Kowalski and his partners lost the property on Fulton Market in 2013 after Bridgeview Bank sold their defaulted loans to a wealthy commodities trader, Don R. Wilson, who foreclosed on the loans and now owns the property. Kowalski received $ 1 million from Wilson’s company to purchase other properties that he allegedly failed to disclose in his ongoing bankruptcy proceedings, according to the indictment.
Kowalski’s brother William was not charged. He is named but referred to as “Person C” in the indictment, who reportedly received money from the loans Bridgeview Bank made on the Fulton Market property. The Kowalski and Gembara brothers also owned a yacht called the Expelliarmus, which federal authorities say was bought by the bank with stolen money. Expelliarmus is the name of the spell from the Harry Potter books that forces an opponent to drop his wand.