Robert Krilich, a prominent developer of real estate projects throughout the Chicago area, was indicted by a federal grand jury Thursday on 19 felony counts ranging from racketeering and bribery to bank fraud and filing false income-tax returns.
Krilich, 64, who has built residential and commercial developments in Cook, DuPage and Lake Counties, was charged with bribing city officials in suburban Oakbrook Terrace by arranging a phony hole-in-one in a golf game.
He was also charged with illegally using for personal purposes money that was earmarked for development, such as spending $70,000 toward the purchase of a $5.5 million oceangoing yacht.
The government also says that Krilich, who received an 18-month sentence for tax fraud in 1971, filed false income-tax returns from 1987 through 1990.
Not only does Krilich face what could be a long prison sentence, the government is also seeking property and money from him. The indictment calls for Krilich to forfeit $15 million-allegedly the proceeds of his illegal activities-as well as a golf course in Naperville that the government says was the site of one of the bribes.
William Branon, head of the FBI’s Chicago office, said in a prepared statement that the indictment demonstrates the FBI’s interest in “not only corrupt public officials but also those who choose to defy our system of government for their own monetary gain.”
Krilich, of Oakbrook Terrace, could not be reached for comment Thursday. One of his attorneys, Jeffrey Steinback, said the builder “intends to fight these charges vigorously.” Krilich is confident “that he will be vindicated at the conclusion of this matter,” Steinback said.
Among Krilich’s many projects have been the Lawrencewood Shopping Center and the Greenwood Estates subdivision in Niles, the Four Seasons of Sullivan Lake apartments in Lakemoor and the partially completed Royce Renaissance Center in Oakbrook Terrace.
The charges come after a three-year federal investigation into the relationship between developers and officials in Oakbrook Terrace.
Krilich is the first private citizen indicted in the investigation, but the charges are hardly a surprise.
Nicolae Ionescu, the city’s engineer, has pleaded guilty to charges that he accepted bribes from Krilich’s company in exchange for helping the company resolve a dispute with the U.S. Environmental Protection Agency. Ionescu, who is cooperating with federal investigators, is awaiting sentencing.
And in February, former Oakbrook Terrace Mayor Richard F. Sarallo was indicted on charges of racketeering and extortion. The government alleged that Sarallo accepted bribes from Krilich’s company for his help in zoning and bond matters. Sarallo has pleaded innocent and is awaiting trial.
The indictment handed down Thursday provides new details of how the government investigators believe Krilich bought the cooperation of top Oakbrook Terrace officials, including Sarallo.
In the spring of 1984, Krilich sought approval for revenue bonds to finance Royce Renaissance. With its towering 27-story apartment buildings and townhouses on 75 acres, the project would double Oakbrook Terrace’s population of 2,000.
According to the indictment, Sarallo solicited a $40,000 bribe in April 1985 in return for helping obtain city approval.
The government alleges that Krilich and an unnamed associate hatched a scheme under which one of Sarallo’s sons would “be declared the `winner’ of a staged hole-in-one golf contest.”
On June 19, 1985, Krilich held the tournament at Country Lakes Golf Club in Naperville, which he owns. It was ostensibly a charity outing, but investigators allege that it provided the means to buy Sarallo’s cooperation.
According to the indictment, Krilich obtained insurance that would reimburse Krilich in the event a participant won the hole-in-one prize, a 1931 Cadillac.
Sarallo and his son, Andrew, who was an Oakbrook Terrace employee, attended the tournament, the Tribune has reported.
Both have denied any wrongdoing in connection with the shot, and Andrew has not been named in any indictment. In an interview with the Tribune in 1992 about the incident, the elder Sarallo said his son made the shot.
But the government alleges that “Krilich, the mayor’s son, and employees of the Krilich group falsely claimed the mayor’s son scored a hole-in-one.”
After delivery of the automobile, according to the indictment, the former mayor told a Krilich representative that he wanted the cash instead of the car.
Two months later, according to the government, the city authorized the development bonds for Krilich.
The bonds were issued Dec. 31, 1985, and Jan. 6, 1986. Krilich, who had collected from the insurance company, ordered a check for $40,000 made out to the mayor’s son, according to prosecutors.
In January 1989, Sarallo allegedly demanded from Krilich $25,000 to support the remarketing of the bonds and received it.
According to the government, Krilich used the proceeds from bond sales for illegal purposes, including bribing public officials.
In 14 instances, according to the government, Krilich raided bank accounts earmarked for bond sale proceeds and used those funds for his own purposes.
In one instance, the indictment said, he took $155,733 from a Tennessee bank and put it into one of his businesses. In another, he is accused of taking $70,000 from an account for a project in Lake County. While he told the bank the money was to pay a consultant, it was really used as a payment on his custom-built yacht, according to the indictment.
