A prominent Chicago real estate developer whose projects included Block 37 and the Streets of Woodfield was sentenced Monday to three years in federal prison and ordered to pay a $250,000 fine for bank fraud.
Larry Freed, 54, president of Joseph Freed and Associates, was convicted last year on fraud charges related to a $105 million line of credit for city and suburban developments obtained in part with collateral previously pledged to another bank.
Freed, through his attorney, requested to serve his sentence at the minimum-security federal prison camp in Duluth, Minn. He was ordered to report to prison Jan. 9.
"I want to say how profoundly sorry I am for my actions. I have caused my family, employees and friends to suffer and for that I am most regretful," Freed told U.S. District Judge Robert Dow before the sentence was imposed Monday in federal court in Chicago.
Joseph Freed and Associates became of the largest privately owned shopping center developers after Freed joined the family business in 1986. Notable projects included restoring the former Carson Pirie Scott department store on State Street, the Streets of Woodfield in Schaumburg and Block 37, which the firm gained control of in 2007.
The primary Block 37 lender foreclosed on the mixed-use property in 2009.
At the center of the fraud was a 2006 line of credit with a consortium of banks that used tax increment financing notes issued four years earlier by the city of Chicago for the redevelopment of a Goldblatt's department store in the Uptown neighborhood.
Freed's firm had already committed the TIF note as collateral to Cole Taylor Bank and failed to disclose that in subsequent negotiations with creditors, including Bank of America and Cole Taylor.
At the February 2016 trial, Freed was convicted on three counts of bank fraud, one count of mail fraud and four counts of making a false statement to a financial institution.
In September, Caroline Walters, a vice president at Joseph Freed and Associates, was sentenced to six months in federal prison and ordered to pay restitution of $575,759 to Bank of America, which Freed paid in December.
"If Mr. Freed had made different decisions, Ms. Walters would not have gone to jail," Dow said during the sentencing hearing Monday.
Freed will have two years of supervised release after serving his prison sentence. In addition to the $250,000 fine, Freed must pay for his cost of incarceration.
"I have let so many people down, and now my life's work has been destroyed," Freed said at sentencing.