Updated 11/29/12 - 5:49 p.m.
CHICAGO (CBS) – State Rep. La Shawn Ford has been indicted on federal bank fraud charges, accused of falsifying bank loans to get an additional $500,000 in credit for his real estate business, and then using the funds for personal and campaign expenses.
Ford, 40, has been charged with eight counts of bank fraud, and nine counts of submitting false information to a bank. The charges involve activity that allegedly occurred mostly before he first took office.
Ford has been in the Illinois House since 2007, and was re-elected to a new term earlier this month. He also operates Ford Desired Real Estate Inc., a commercial real estate firm based in Chicago.
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According to federal prosecutors, Ford had multiple loans with ShoreBank, including a $1 million line of credit, which was to be used only to buy and rehab property for his real estate company. In May 2006, he obtained a $500,000 increase and two-year extension on that line of credit by submitting false tax returns that inflated his personal and business income, prosecutors alleged.
Thursday evening, Ford insisted he is innocent, and said the indictment was nothing more than "a story" presented by federal prosecutors, not the truth.
Federal prosecutors said Ford applied seven times for advances from that line of credit between April 2006 and March 2007, obtaining a total of $373,500 in funds.
He allegedly told the bank he was going to use the money to rehab six different pieces of property on the West Side, but instead used the funds for personal and campaign expenses – including car loans, credit card bills, mortgage payments, expenses for his 2006 campaign, and checks to the Horseshoe Casino in Hammond, Ind.
Ford was combative at first when he found reporters waiting for him outside his West Side office on Thursday.
"Who are you guys? I've been trying to get you guys to come to this neighborhood to see how many people need jobs over here, and now everybody's here," Ford said.
At first, Ford tried to deflect questions about the indictment.
"You know how many people are unemployed on the West Side of Chicago? Do you know how many ex-offenders are on the West Side of Chicago that cannot get jobs? That's the story. I'm just one person," he said.
But Ford later said he's innocent, saying "no one can tell you anything different about La Shawn Ford, but that he's lived a life of integrity."
He said the allegations were just a "story" written by federal prosecutors.
"They're good writers," he said. "They're making up a story from what they assume happened."
Ford said he believes the charges are the result of federal authorities looking into the ShoreBank's failure, after it was forced to shut down in 2010, and was taken over by Urban Partnership Bank.
Each count of the indictment against Ford carries a maximum 30-year prison sentence and a $1 million fine. Prosecutors are also seeking a forfeiture of $832,000.
An arraignment date for Ford has not yet been scheduled.
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