Ex-Ald. Patrick Daley Thompson accused of failing to pay restitution in tax case
Six months after his release from federal prison, former Chicago Ald. Patrick Daley Thompson could be in hot water again after court probation officials accused him of failing to pay restitution for his tax-related conviction.
Thompson, 54, the former 11th Ward alderman and scion of the Daley political dynasty, was sentenced to four months in prison in July 2022 for tax evasion and lying to banking regulators. He served his time at the minimum security facility in Oxford, Wisconsin, and was released five days before Christmas, records show.
As part of the sentence, Thompson was ordered to begin paying approximately $60,000 in restitution within 60 days of his release. He also was required to notify probation officials immediately of any significant change in his economic circumstances, court records show.
Last month, the U.S. probation office filed a sealed special report on Thompson’s supervised release status and asked for an “admonishment hearing” before U.S. District Judge Franklin Valderrama, court records show.
Although the report is under seal, Valderrama set a public hearing on the matter for Thursday to address “nonpayment on his restitution since March 2023 and employment status,” court records show.
It’s likely Thompson will at most face a tongue-lashing from the judge to abide by his supervised release conditions and possibly a warning that future violations could land him back behind bars.
Meanwhile, in arguing Thompson’s response should also be kept sealed, defense attorney Chris Gair stated Thompson has been working as a consultant and claimed that revealing the identities of his “client companies” in court records could damage his new livelihood.
“Mr. Thompson maintains the confidentiality of his consulting clients, and public identification of those clients — together with anticipated media attention — would jeopardize Mr. Thompson’s ability to earn a living,” Gair wrote in a motion last week.
Prosecutors have objected to the motion being kept under seal, saying the documents do not contain anything overtly sensitive and that there was “no justification” for hiding it from the public.
Gair could not immediately be reached for comment Monday.
Thompson, grandson of Richard J. Daley and nephew of Richard M. Daley, Chicago’s two longest-serving mayors, was convicted by a federal jury in February 2022 of two counts of lying to federal regulators about loans he had with the now-shuttered Washington Federal Bank for Savings in his family’s Bridgeport neighborhood.
The jury also found Thompson guilty on five counts of filing false tax returns that illegally claimed mortgage interest deductions he never paid.
Under state law, Thompson was forced to resign his seat on the Chicago City Council immediately after the conviction on felony charges. His license to practice law also was suspended by the Illinois Supreme Court following his conviction — a decision he is still trying to reverse.
At the sentencing hearing last year, Valderrama ordered Thompson to serve a year on supervised release, which is the federal equivalent of parole. Thompson agreed to work with the U.S. probation office on a payment plan for the restitution that would include garnishment of 10% of any earnings, court records show.
The charges against Thompson were an offshoot of a larger investigation into the collapse of Washington Federal, which uncovered a massive embezzlement scheme leading to charges against more than a dozen former bank officers, employees and customers.
Gair sought to pin blame for Thompson’s issues on both the bank and its former president, John Gembara, saying Thompson had nothing to do with generating the erroneous tax forms that wound up on his returns.
The defense team also portrayed Thompson as an honest but “frazzled” man, constantly torn between his duties as an alderman, commercial real estate lawyer and father, and admittedly Thompson lacked focus when it came to the minutiae of his taxes.
Gembara was found hanged in the home of a customer days before the bank was shuttered, and his death was ruled a suicide.
Thompson’s appeal of his conviction is pending before the 7th U.S. Circuit Court of Appeals.
