He’s been kicked out of banking by federal regulators, accused of sexual harassment and caught pretending his lakefront mansion was an Armenian church to avoid paying property taxes.
But when Chicago real estate mogul George Michael takes the witness stand this week, he will be filling an unlikely new role: star witness.
Michael, 59, is the colorful lynchpin in one of the most bizarre cases to hit federal court in years.
Steve Mandell, a former Chicago cop and onetime death row inmate, is charged in a lurid plot to kidnap a suburban businessman, extort him of his cash and real estate, then kill him and chop his body into pieces.
Mandell also is accused of planning to kill another man in order to take over his financial interest in a lucrative, mob-connected strip club.
Michael, wearing an undercover wire for federal agents, helped nab Mandell, an elusive target once known as Steve Manning, who a decade ago won his freedom from death row and then remarkably won a federal lawsuit against the FBI for framing him. The stakes were enormously dangerous for Michael in his undercover work. Authorities have linked Mandell to as many as eight slayings dating to the 1980s and describe him as one of the most brutal underworld figures they’ve ever encountered.
Even after Mandell’s sensational arrest in October 2012 — as the kidnapping plot was allegedly being set into motion — the risks for Michael didn’t end, authorities have said. Last year, federal prosecutors alleged that Mandell had been caught trying to arrange Michael’s murder from his jail cell.
Mandell’s trial on kidnapping conspiracy, attempted extortion and murder-for-hire charges is set to begin Monday at the Dirksen U.S. Courthouse with jury selection.
Michael is expected to give testimony about the dozens of audio and video recordings made during the investigation. Agents tapped phone calls and planted bugs at his Northwest Side real estate office as well as at a rented storefront where Mandell and an associate planned to kill and dismember the businessman, a location they jokingly referred to as “Club Med.”
Mandell’s lawyers are sure to attack Michael’s credibility. In a recent ruling, U.S. District Judge Amy St. Eve, who will preside over the trial, said she would allow the defense considerable leeway on cross-examination, their best chance to try to portray Michael as a slippery businessman and accomplished liar.
While some topics are off the table — St. Eve, for example, ruled that questions about the 2001 sexual harassment suit would be too prejudicial — Mandell’s lawyers would appear to have plenty more to go after Michael on.
A 2010 ruling by a federal administrative law judge recommended that Michael and his brother, Robert, be kicked out of banking for violating regulations as co-owners of Citizens Bank and Trust. The judge in that case ruled that the Michaels had “a tendency … to engage in unsafe or unsound practices, and breach their fiduciary duties.”
Regulators later ousted the brothers, and the Federal Deposit Insurance Corp. took over the bank.
According to St. Eve’s ruling, Mandell’s attorneys can’t rehash the facts of the banking case, but they will be able to probe findings concerning Michael’s truthfulness.
Mandell’s attorneys also will be allowed to explore an accusation that Michael once paid a bribe, but the details were blacked out in St. Eve’s ruling.
The scam over his Armenian Church of Lake Bluff may prove to be the biggest blow to Michael’s credibility.
In 2008, Michael was granted an $80,000-a-year tax break on his 17-room mansion overlooking Lake Michigan by saying he held orthodox services on the home’s racquetball court because his wife was too ill to travel to their regular church in Chicago.
An appeals judge later ruled that the church was a sham. Michael had been ordained as a priest through a free online site called The Church of Spiritual Humanism, and documents he submitted purportedly showing a cross mounted on the exterior wall of the home had actually been doctored with a magic marker. Michael lost the tax break, and in 2010 Lake County billed him almost $250,000.
Michael filed for bankruptcy at about the same time. Though he still lives in the mansion, the bank that holds the $4 million mortgage note filed a motion to intervene last week that alleged Michael owes nearly $2 million in back payments.
But even if Mandell’s attorneys are able to score points in cross-examining Michael, the recordings he made of Mandell, using a hidden wire on his body and other listening devices concealed at his office and at Club Med, could prove devastating for the defense.
The recordings allegedly captured Mandell talking jovially about everything from the most effective methods of torture to the screams and pleadings that murder victims make before they die.
Prosecutors will play video from inside Club Med, where Michael — pretending to go along with the murder plot — oversaw the installation of restraints, an industrial-sized sink and other equipment needed to drain a body of blood.
Jurors will also see footage taken from an FBI aircraft that purportedly shows Mandell crouching under a car in a suburban mall parking lot and installing a tracking device on a car, prosecutors have said.
Other recordings allegedly depict Mandell talking with Michael about his desire to move in on Polekatz, a Bridgeview strip club that over the years has included several Chicago Outfit-connected figures as highly paid “consultants.”
According to one recording quoted in court filings, Mandell told Michael he’d decided to kill one of the consultants, former Franklin Park cop Anthony Quaranta, as well as Quaranta’s wife if necessary, then place a threatening phone call to another target’s wife to persuade him to walk away.
“Yeah, he’ll get the message,” Michael said to Mandell, according to the court records.
In some of the recordings excerpted in government filings, Mandell clearly feels comfortable around Michael.
Michael casually discussed the nuances of murder, referring to the soon-to-be-slain businessman as “Soupy Sales.”
The two chatted about who’s who in the Outfit, laugh about producing phony police identification and, ironically, ruminate whether the second would-be victim was cooperating with the FBI.
Some of the conversations captured an almost locker room quality of buddies shooting the breeze.
In one, Mandell referred to famed attorney F. Lee Bailey as he explained how it was best to lawyer up and not talk if the police came knocking. Michael laughed, but he seemed to catch himself when he realized Mandell could take that the wrong way.
“I’m sorry Steve, I have to laugh sometimes ’cause you’re so comical. … But don’t get me wrong. I mean, no disrespect,” Michael was quoted as saying.
jmeisner@tribune.com
