Keith Freeman, a former administrator for both Dolton and Thornton Township, has pleaded guilty to federal bankruptcy fraud and filing a false tax return after gaining COVID-19 relief funds through the U.S. Small Business Administration.
Freeman, who worked under Tiffany Henyard when she was Dolton mayor and Thornton Township supervisor, entered the guilty pleas Monday, almost two years after he was first charged with bankruptcy fraud. Freeman could not be reached Thursday for comment.
The agreement states Freeman received $254,700 in federal government pandemic funds after entering false information on three applications for Economic Injury Disaster Loans between June 2020 and February 2021. The applications were submitted on behalf of companies he was associated with, including Colab Leaders and Heirs 2 Heaven.
The COVID-19 Economic Injury Disaster Loans were intended to provide funding for small businesses to recover from the economic effects of the pandemic, according to the U.S. Small Business Administration. The two types of funding were loan funds used for working capital and other normal operating expenses, expected to be repaid, and advances provided to applicants who met certain requirements that did not need to be repaid.
On the loan applications, Freeman falsely represented the “existence and nature” of the purported businesses, the number of people employed through the businesses, their incomes and payroll expenses, and how they would use the government funding, according to the plea agreement.
Freeman also made false representations in a January 2024 Chapter 7 bankruptcy filing to conceal from creditors his assets, sources of income and a significant claim against him, the agreement states. This includes falsely representing his number of bank accounts and concealing an account into which his salary as Thornton Township administrator was deposited, the agreement states.
While testifying under oath, Freeman also disclosed only his employment with the township, falsely stating that he was not also working as administrator of Dolton, according to the plea agreement. It states that in filings, Freeman said his monthly income was about $7,200 when it was actually about $15,000, the agreement states.
Freeman listed false monthly and yearly incomes in other filings as well, the agreement states.
The filing a false tax return charge stems from Freeman underreporting his income on tax returns for 2019 and 2020, according to the plea agreement. For 2020, Freeman listed his income for that year as $50,300, failing to disclose an additional $254,500 received, some of which was gained as part of a COVID-19 pandemic relief program.
Freeman failed to file his taxes for 2021, 2022 and 2023, according to the agreement. In his bankruptcy filings, he submitted false documentation as a purported copy of his 2022 tax return, it states.
The agreement says federal government losses through Freeman’s 2019 through 2023 tax return issues totaled about $281,000 and state government losses totaled $16,600.
In 2023, Freeman also set up a business, Government Staffing Advisors, Inc., that served no legitimate purpose but was used to conceal income he received as Thornton Township administrator from the federal government, the agreement states.
The bankruptcy fraud charge carries a maximum sentence of five years in prison and a fine of up to $250,000. The filing a false tax return charge carries a maximum sentence of three years in prison and a fine of up to $250,000.
However, the plea agreement states that in part due to his cooperation during the investigation, Freeman is expected to serve between 30 and 37 months in prison and pay $552,278 in restitution, the amount lost by state and federal governments as a result of the fraud.
Freeman was fired from his township administrator position in July 2024 due to poor attendance. He was reportedly warned about his “failure to consistently show up to work” without notifying his supervisor.
Another Dolton administrator who worked closely with Henyard, former police Chief Lewis Lacey, made a plea deal on federal bankruptcy charges in November.
Henyard was under federal investigation for alleged corruption in her previous roles as Dolton mayor and Thornton Township supervisor, but no charges have been filed.
Dolton filed a lawsuit last month against Fifth Third Bank for allegedly allowing Henyard to sign 251 fraudulent checks totaling $1.9 million that led the village to incur multiple debts, taking on interest payments from those debts, and to miss out on investments.
ostevens@chicagotribune.com
