08/26/2007

News / Feds: Scams netted millions. Former publisher allegedly stiffed real estate investors

The vacant building on U.S. 30 in Chicago Heights was boarded up and covered in graffiti.

But in fall 2005, Lee Anglin was able to convince an investor in Naples, Fla., to wire him $67,000 so he could buy the building, rehab it and sell it for a big profit.

The account at Palos Bank and Trust where the money was wired actually was the business checking account for a restaurant Anglin co-owned in Palos Hills and at the time had a balance of just $121, federal authorities said.

The Florida investor was one of nearly 60 people the government alleges were scammed by Anglin over four years in an elaborate real estate fraud. Anglin allegedly took in more than $9 million from investors across the country, some of whom lost hundreds of thousands of dollars.

Anglin was supposed to invest that money in real estate deals, which, he told unsuspecting investors, would bring them guaranteed returns of nearly 25 percent, according to the U.S. attorney's office. Instead, Anglin used the money to buy cars, pay doctor's bills and loan money to restaurants he owned or managed and converted a "substantial" portion of investors' money to cash, according to the government.

Anglin grew up in Chicago and has a home in Frankfort, but since spring has been held in the federal Metropolitan Correctional Center in downtown Chicago, awaiting trial on charges of mail and wire fraud. He recently dismissed his lawyers and is representing himself.

Anglin sold buildings in suburbs such as Chicago Heights, Calumet City and Lansing several times to multiple investors -- some properties he didn't own, and in some cases the properties didn't exist, according to prosecutors.

The investor from Florida, for instance, wired Anglin nearly $200,000 to invest in distressed properties Anglin supposedly owned in Frankfort and Tinley Park. But agencies in Will and Cook counties couldn't find any records corresponding to the street addresses Anglin gave the investor, according to a sworn affidavit filed in connection with the case.

Anglin is just 37, but he has a long history of stiffing people to whom he owes money.

Extracting blood from a stone was a piece of cake compared with getting Anglin to pay if he owed you money, some of his acquaintances told Chicago Reader columnist Michael Miner, who wrote a lengthy profile of Anglin in 2000. Debts as measly as $100 were impossible to collect, Miner wrote.

In the mid-1990s, when he published community papers in the Chicago area, staffers walked out on Anglin because they weren't getting paid, according to newspaper reports at the time. An 11-year-old paperboy in Indiana who was owed $60 by Anglin climbed on the roof of his home in protest. Checks that he and other carriers got from Anglin bounced.

But Anglin also has a philanthropic side, as evidenced by a large contribution he made in the spring of 2004 to the Frankfort Falcons youth football organization, which was raising money for a new stadium.

Anglin now is a defendant in many lawsuits pending in Cook County Circuit Court, seeking payment of hundreds of thousands of dollars. Among the lawsuits is one filed earlier this year by Founders Bank and Trust in Worth, which seeks more than $31,000 from Anglin. An attorney representing the bank did not respond to a phone call or an e-mail seeking comment.

Illinois Attorney General Lisa Madigan sued Anglin in late April, alleging that he underpaid employees of various businesses he operated by more than $43,000. A former employee who lives in Oak Forest is owed more than $34,000, according to the complaint.

Columnist to real estate magnate

A decade ago, Anglin was a local version of William Randolph Hearst. He operated weekly newspapers, including the Calumet Herald and Hegewisch News, on the Southeast Side. On the Southwest Side, he briefly published the Midway Times, and he also had papers in northwest Indiana. He wrote a column, Anglin's Angles, and ran for 10th Ward alderman and state representative, supporting development of a land-based casino at the former U.S. Steel South Works site.

Along the way, Anglin made a few enemies.

A former business associate was charged in 1996 with attacking Anglin with an ax while wearing a woman's wig and makeup. In April 2000, Anglin was shot at outside his office on Ridge Road in Homewood, but the shooter eventually was acquitted of attempted murder.

Anglin's newspaper empire eventually fell into bankruptcy, and he apparently turned his focus to real estate. He formed companies including 4A Development Inc., Anglin Commercial Group, Anglin International Holdings Inc. and Anglin Real Estate and Development, operating them from offices in Harvey, Homewood, Palos Hills and most recently a strip mall on 94th Avenue in Orland Park. The businesses have since been dissolved, according to the Illinois secretary of state's office.

As part of the real estate investment scheme, Anglin ran ads in newspapers, including the Wall Street Journal, promising investors sky-high returns, according to court documents in his fraud case. He boasted to prospective investors he'd been involved in real estate for 15 years, earned an eight-figure income and ran businesses that were worth millions.

He allegedly told them he invested in distressed properties, and also built new homes and commercial buildings. There's no evidence he ever built anything.

Anglin told his pigeons that while he was wealthy, all his money was tied up in real estate, and he lacked the liquidity needed to pounce on some red-hot real estate deals, prosecutors said.

He allegedly would fax information about the properties and instructions on wiring money to a bank account. Prosecutors said Anglin maintained more than 30 bank accounts during the fraud scheme, which started in February 2002 and lasted through March 2006. Some of the accounts had just a few dollars in them, and others were overdrawn by thousands of dollars, according to the government.

Some of Anglin's investors did see money because Anglin's fraud was what's known as a Ponzi scheme -- returns are paid to earlier investors with money received from later ones, but eventually there's not enough money to keep the scam going, according to the government affidavit.

But some investors lost hundreds of thousands of dollars. An investor from New Jersey who paid Anglin more than $350,000 was, after filing a lawsuit in federal court, able to squeeze a whopping $484 from him.

The $200,000 shack

In one particularly clever ruse, Anglin allegedly conned a group of investors from New York into paying nearly $200,000 for a shabby-looking home in Lansing that Cook County says has an assessed value of about $9,100.

He's accused of urging them to quickly wire $72,150 to 4A Development's account because he had a buyer lined up for the property. They did, but Anglin called them back to say the transfer never went through, according to the affidavit.

It says that rather than wiring the money again, the investors instead were told to go to their bank and get a cashier's check for the amount. Anglin sent a purported senior vice president from 4A in a chauffeur-driven limousine to pick up the check, according to the document.

It says the investors later discovered that the wire transfer had gone through and demanded return of their overpayment. After Anglin sent a check for $52,150, they wanted to know where the remaining $20,000 was, the affidavit says.

Anglin then suggested that they return the $52,150, and he'd send them a check for the full amount. They complied, Anglin sent the check, but when they tried to deposit it they found that a stop-payment order had been placed on the check, according to the affidavit.

It says Anglin blamed an error by his accounting department and promised he'd wire the investors the money, but that never happened, according to the court document. At the time the wire transfer was deposited in 4A's bank account, the account was overdrawn by $23.72.

A fool for a client?

The sworn statement detailing key elements of the alleged real estate scam was filed with the court in March 2006, and Anglin was arrested that month. But it wasn't until last November that the government spelled out the criminal charges against him.

He was briefly free on bail, but prosecutors moved in April to revoke Anglin's bail because he had not been able to put up property needed to secure it. The government said Anglin also tested positive for cocaine use on two occasions, and Anglin's attorney at the time said his client was seeking outside help for his addiction.

Until last month, Anglin was represented by Chicago lawyers Beau Brindley and James Shapiro. They asked the judge for permission to withdraw, citing correspondence they received from Anglin, "the content of which makes it impossible" for them to represent their client, according to their motion. Brindley said he couldn't discuss the correspondence or Anglin's case, citing attorney-client privilege.

The judge this month approved Anglin's request to represent himself. In his motion, Anglin said he "wishes to have more control over his case and access to the courts," and that by representing himself he "will have a better understanding of the case and charges."

"The defendant believes as pro se he will have the ability to speed the process at a much quicker pace and to know the final consequences he is facing sooner," Anglin told the court.

Mike Nolan may be reached at mnolan@dailysouthtown.com or (708) 633-5952.

BY MIKE NOLAN Staff Writer
http://www.dailysouthtown.com/business/527370,826anglin.article

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