Chicago attorney on trial in Bridgeport bank failure represents himself, begins with talk of a ‘pink elephant,’ dead bank CEO – Chicago Tribune newstrendslive

Chicago attorney and real estate developer Robert Kowalski was just a few minutes into his opening statement in his federal fraud trial Tuesday when he started talking about pink elephants.

Kowalski, who has made the risky move to represent himself, told the jury the “pink elephant” in the courtroom was John Gembara, the now-deceased president of Washington Federal Bank for Savings, who was found dead in the home of a customer just days before the bank was taken over by federal regulators.

It was Gembara, his longtime friend, who embezzled millions from the small Bridgeport bank, Kowalski said, a scheme that allegedly involved years of bad loans, shifting collateral, forged signatures, and even cash buried by one of his customers somewhere in the Cayman Islands.

“He didn’t start out to be a bad man, but his plan was terrible,” Kowalski said. “It wasn’t George Bailey in ‘It’s a Wonderful Life.’ ”

But when Kowalski repeatedly tried to insinuate that Gembara’s death — which was ruled a suicide — might have been the result of foul play, prosecutors objected and U.S. District Judge Virginia Kendall cut him off.

“The facts show that something else was going on,” Kowalski protested before the judge told him to move on. “There were multiple ligature marks on this man’s neck.”

Kowalski is among 14 defendants charged in an alleged multiyear embezzlement scheme that preceded the failure of Washington Federal, a family-run institution that had been a mainstay in the city’s Bridgeport neighborhood for more than a century.

Kowalski, who was a large debtor of the bank when it was closed by regulators in December 2017, was charged with embezzling more than $8 million from the bank with the help of Gembara, as well as bankruptcy and income tax fraud for allegedly lying about and concealing assets and income.

The sprawling investigation has already led to one other high-profile trial. Patrick Daley Thompson, the then-11th Ward alderman and scion of the Daley political dynasty, was convicted last year of two counts of lying to federal regulators about loans he had with Washington Federal and falsely claiming mortgage interest deductions on his tax returns.

Thompson, who by law was forced to step down immediately after his conviction, was sentenced to four months in prison and released in December.

Kowalski’s trial, meanwhile, comes after years of bizarre pretrial hearings that saw him locked up for violating his bond and filing dozens of motions alleging investigators were hiding evidence and colluding with the judge to railroad him.

In one handwritten motion last year, Kowalski, 60, asked Kendall to recuse herself in part because she allegedly engaged in “barrista duties” at a status hearing, inviting prosecutors “to share carmel Macciatos (sic)” with her in court while he was at the defense table.

“Notably, shackled attorney Kowalski was not extended an invitation to partake of Judge Kendall’s tasty largesse,” he wrote. “The defendant stood chained amidst all the fanfare and festive slurping.”

Kendall denied the request, calling his story “fanciful” and saying if she’s been biased toward anyone, it was him.

“Mr. Kowalski should spend less time fabricating facts to put in motions to delay his trial and more time preparing for his defense,” Kendall wrote.

Prosecutors in their opening statement Tuesday said that Kowalski used his friendship with Gembara to turn Washington Federal into his own piggy bank, getting collateral-free loans to bankroll his real estate developments and using letters of credit from the bank to fool other creditors.

Assistant U.S. Attorney Jeremy Daniel said the case isn’t so much about the bank’s ultimate failure, but about Kowalski’s “pockets and how he lined them.”

“If his account’s overdrawn, call Gembara. Need more money? Call Gembara,” Daniel said. “Where did the money go? Out of the bank to benefit the defendant.”

Daniel said that two of the bank’s former employees, including former loan officer Alicia Mandujano, will testify that Gemara ordered them to forge signatures and doctor other paperwork to hide Kowalski’s outstanding loans.

Mandujano is among eight people who have pleaded guilty to roles in the scheme. Several others are awaiting trial, including William Mahon, a then-top official with the city’s Streets and Sanitation Department charged with willfully filing false tax returns and failing to disclose a $130,000 personal loan he’d received directly from Gembara.

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Police records show Gembara, 56, was found dead on Dec. 3, 2017, in the Park Ridge home of a bank customer where he had been staying. An autopsy report showed Gembara was found seated in a chair in his bedroom with a rope tied to the banister and around his neck. His death was ruled a suicide by the Cook County medical examiner’s office.

Kowalski was free on bond in 2020 when prosecutors accused him of improperly sending police and autopsy records to Gembara’s widow and suggesting the suicide ruling was a cover-up.

Kowalski said at the time he has always been suspicious of the circumstances surrounding Gembara’s death and sent the information — obtained via open records requests of Park Ridge police — to the woman in an effort at “transparency and closure.”

“I wanted more information,” Kowalski said. “Him dying while sitting in a chair has always rankled me. It didn’t make sense.”

But Kendall said Kowalski committed “witness tampering” by bringing his far-flung theories to the woman, who was potentially a witness in the investigation, and ordered Kowalski jailed for violating the terms of his release.

“The most salacious detail about the case is that a president of the bank committed suicide,” the judge said at the time. “You are trying hard to find out something about this suicide and turn it into a murder.”

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