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Press Release

Chicago Investment Advisor Convicted Of Defrauding Suburban Bank And Two Clients Of More Than $3.2 Million

For Immediate Release
U.S. Attorney's Office, Northern District of Illinois

CHICAGO ― A Chicago investment advisor was convicted today of federal bank fraud charges for engaging in a scheme to defraud Oak Brook-based Leaders Bank and two of his clients of more than $3.2 million and ultimately causing the bank to lose more than $2.7 million.  The defendant, ROBERT J. LUNN, was found guilty of five counts of bank fraud by a federal jury that began deliberating yesterday following a trial that began Oct. 7.

Lunn, 64, of Chicago, who did business as Lunn Partners, LLC, an investment advisory business, remains free on bond pending sentencing, which was set for Jan. 21, 2015, by U.S. District Judge Charles Norgle.  Lunn faces a maximum sentence of 30 years in prison and a $1 million fine on each count, or an alternate fine totaling twice the fraud loss or twice the gain, whichever is greater, as well as mandatory restitution.  The court may also order forfeiture of any fraud proceeds.

According to the evidence at trial, Lunn fraudulently obtained a $1.32 million line of credit from the bank for his business, as well as separate loans of $1.4 million and $500,000 purportedly on behalf of two clients.  Lunn made a series of misrepresentations to Leaders Bank about his own assets, the purpose of the loans, and the knowing authorization of clients purportedly seeking the financing.  Instead, Lunn used substantially all of the fraudulently obtained funds for his own benefit, including mortgage payments and approximately $1.4 million in payments to other investment clients.

Lunn initially obtained a business line of credit from Leaders Bank for $480,000 in May 2001.  He increased the credit line twice in early 2004, first to $1.2 million and later to $1.32 million, all after he submitted personal financial statements to the bank falsely stating that he owned millions of dollars of stock in Morgan Stanley and Lehman Brothers.  In September 2002, Lunn arranged for an unsecured bank loan of $1.4 million, purportedly for the benefit of former Chicago Bulls star Scottie Pippen, a client at the time, after falsely representing the proceeds of the loan would be used by Pippen to finance the purchase of an interest in an airplane.  In June 2004, Lunn arranged a bank loan for $500,000 for the benefit of another former client, Robert Geras, a retired venture capitalist, without Geras’ knowledge or authorization, after submitting a net worth report for Geras and stating that Geras wanted short-term financing for a business investment.

The guilty verdict was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois, and Robert J. Holley, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation.  They thanked the U.S. Securities and Exchange Commission’s Chicago Regional Office for its cooperation and participation in the prosecution.  

The government is being represented by Assistant U.S. Attorney Kenneth Yeadon and Special Assistant U.S. Attorney Rich Stoltz, a senior attorney with the SEC.

Updated July 23, 2015