Chicago Police lieutenant resigns after feds indict him - Chicago News and Weather | FOX 32 News

Chicago Police lieutenant resigns after feds indict him

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CHICAGO (Sun-Times Media Wire) -

A Chicago Police lieutenant resigned Friday after he was charged by federal prosecutors with participating in a mortgage fraud scheme involving a motley crew of characters with links to several high-profile crimes.

Erroll Davis — a 52-year-old former member of the Chicago Police's Marine Unit — is accused of teaming up with bank owner Robert Michael to help disgraced former Country Club Hills Police Chief Regina Evans fraudulently obtain a $650,000 loan, the Chicago Sun-Times is reporting.

He has yet to appear in court but ended his 27-year police career Friday after his federal indictment was announced, Chicago Police spokesman Adam Collins said.

The 12-page indictment suggests he kept intriguing company.

Michael, 62, is the brother and long-time business partner of George Michael, an eccentric Lake Bluff multimillionaire who is expected to be the key government witness in the grisly upcoming trial of alleged extortion plotter Steven Mandell.

And Evans is awaiting sentencing after pleading guilty to federal charges of obstruction of justice and witness tampering in connection with a $1.25 million state grant-fraud scheme.

According to the new charges against Erroll Davis and Robert Michael, they joined forces in 2008 to get around lending regulations, falsifying loan documents so that Evans would qualify for a loan from Michael's bank, Citizens Bank, which has since failed.

Davis allegedly lied on his tax return as part of the complex scam, which involved him posing as the buyer of an apartment building connected to the South Side's historic Regal Theater, which Evans then owned.

Though Evans hasn't been charged in the case and is referred to only as "Individual A" in court papers, the indictment alleges she was a knowing participant in the fraud and that it was set up to help her settle a $240,000 debt she owed Michael.

The new allegations are likely to be used against her when she's sentenced next month for the state grant fraud in Springfield.

Michael was freed on bond Friday after pleading not guilty during a brief court appearance.

The former bank owner — who identified himself in court as a former Chicago Police Sergeant — filled out forms for the judge indicating he lives with his mother and cannot afford to hire his own attorney.

Both his and his brother George's involvement in the banking industry have been attracting federal attention for more than a decade. Two years ago they were kicked out of the banking industry for good by regulators.

Perhaps feeling the heat of that federal attention, George Michael last year wore a wire for the FBI, helping agents build a case against notorious former death row resident Steven Mandell.

George Michael — who isn't accused in the new mortgage fraud plot — secretly taped Mandell as he allegedly plotted to torture and kill an unnamed businessman in a purpose-built killing chamber.

Offered the chance to comment on his brother's arrest Friday, he sent a one-word email to the Sun-Times.

"Geez," it read.

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