The men were charged Tuesday in what U.S. Attorney Patrick J. Fitzgerald called one of Chicago's largest financial fraud cases.
Some 10,000 accounts at the Independent Trust Corp., known as "Intrust," were skimmed of $50 million and about $30 million was stolen from escrow accounts with the Intercounty Title Co. of Illinois, the 17-count indictment said.
The money was used to keep the floundering title company afloat as well as hire the men's friends and relatives, pay off personal credit cards and even renovate a golf course, the indictment said.
"They stole $80 million, driven by pure greed," Fitzgerald said at a news conference.
For years before Intrust collapsed in 2000, state regulators had expressed concern about the practice of transferring money from the trust accounts to the title company, federal officials said.
Prosecutors said Intrust officials lied to the regulators, in one case claiming in writing that a trust account that contained $45,000 actually had assets worth $55 million.
Laurence W. Capriotti, 58, of Frankfort, and Jack L. Hargrove, 62, of Fort Lauderdale, Fla., controlled both Intrust and Intercounty and served as directors of both, federal officials said.
Also charged with fraud were Intercounty executives Michel D. Thyfault, 56, of LaGrange; James R. Wallwin, 53, of Darien; and George J. Stimac, 41, of Chicago.
Wallwin and Stimac were cooperating and were expected to plead guilty, prosecutors said. Thyfault's attorney, Aldo Botti, said he was disappointed in the indictment because his client is "a highly ethical, professional family man."
Hargrove's attorney, Marc Martin, said his client intended to plead innocent. Capriotti attorney Jeffrey Steinback did not immediately return a message seeking comment.
The trust account holders got to keep about 92 percent of their holdings, prosecutors said. They said a civil court decision has spread the loss among account holders.
The $30 million in Intercounty escrowed funds were covered by a title reinsurance company, Fidelity National Title Insurance Co. of New York, federal officials said.
The financial woes at Intercounty began in the early 1980s with a sour investment in the junk bond market that left a $10 million shortfall, the indictment said.
Intercounty's problems worsened because of a title-insurance price war, officials said. They said the company lost more than $6 million in 1987 and its annual deficit grew to $20 million after 1990.