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A well-known neighborhood bank catering to the Korean American community in Chicago has been the center of power and corruption since it opened more than twenty years ago, a Rebel Pundit analysis has found.

Foster Bank, which opened in 1989, has become one of the most recognizable financial institutions on the North side of the City of Chicago, along with branches in the north suburbs like Niles.

While it outwardly appears to be a nice community bank, several of its principals have been involved with crimes, and the bank has been cited on a number of occasions for unsafe banking practices.

The main principal at Foster Bank is Kun Chae (KC) Bae, and he’s gained so much respect that a portion of North Kedzie Avenue and West Foster Avenue has been renamed Kun Chae Bae.

But Bae has run afoul of the law for more than twenty years. In the early 1990s, he went to jail after he was accused by the Food and Drug Administration of mislabeling drugs.

“PBI purchased this facility from MY-K Laboratories soon after MY-K and its owner K. C. Bae were accused of paying illegal gratuities and producing controlled substances. Bae has been convicted in Maryland, but, the committee said, he ‘walked away from MY-K with $20 mil. and received a three month sentence and a $25,000 fine. ‘However, the subcommittee added, ‘the Justice Department in Chicago still has K. C. Bae under investigation for some of the gross manufacturing deficiencies.’”

Bae was also the owner of the iconic Purple Hotel on Touhy Avenue when a series of poor financial decision forced it into foreclosure and the property had to be demolished.

When operational, the hotel was a well-known meeting place for disgraced political insiders like former President Obama confidante Tony Rezko and Stuart Levine, the political insider whose testimony helped to convict former Illinois Governor Rod Blagojevich.

One other important player in the Foster Bank hierarchy is Paul Park. Park is a political insider whose political contributions go back to 1994 and include: Illinois Governor Pat Quinn, Former Illinois Governor Rod Blagojevich, Cook County Board President Toni Preckwinkle, Cook County State’s Attorney Anita Alvarez, and a series of Democrat organizations.

Along with his positions at Foster Bank, Park is currently a member of the Illinois Department of Professional and Financial Responsibility’s (IDPFR) Real Estate Administration and Disciplinary Board, and has been since 2004.

These appointments are made by the Governor of Illinois and Park’s role on the committee corresponds to donations made to current Illinois Governor Pat Quinn and former Illinois Governor Rod Blagojevich, raising the specter that the appointments were made as part of a so-called pay to play scheme.

Furthermore, because the IDPFR decides issues of banking in Illinois, Park’s appointment to their real estate disciplinary board carries with it the potential of a conflict of interest.

A phone call to the IDPFR’s media relations department was left unreturned and an email to Mario Pantoja, IDPFR’s director of consumer services was also left unreturned.

Emails to John Gay, Rudi Hancock, and David Sinclair, all three members of Governor Quinn’s team responsible for the IDPFR were also left unreturned.

Park’s daughter, Linda Park, was quoted in a 2004 Chicago Tribune article on a Tax Incremental Financing deal approved by 40th Ward Alderman Patrick O’Connor for a project purportedly done by a company called JJJ Properties.

In the article, Linda Park is referred to as JJJ Properties’ Project Manager.

“JJJ Properties Inc., a Chicago-based commercial and residential development company, is building the project at 5978 N. Lincoln. The developer bought a former Japanese restaurant in August 2002, according to Linda Park, project manager at JJJ Properties. “

This title is dubious in light our August 2014 report by Rebel Pundit, which showed the TIF was questionable and JJJ Properties was nothing more than a shell company created to receive the TIF.

A call to Paul Park’s residence was left unreturned.

More troubling is a series of citations from the Federal Deposit Insurance Commission (FDIC) and the aforementioned IDPFR for unsafe banking practices against Foster Bank. In 2006, Foster Bank was cited by the US Department of Treasury Financial Crimes Enforcement Network for a series of financial violations which dated back to the early 1990s.

“Foster failed to implement an adequate Bank Secrecy Act compliance program, including an anti-money laundering program with internal controls, independent testing and other measures to detect and report potential money laundering, terrorist financing and other suspicious activity.” The report stated. “This failure led, in turn, to the Bank’s failure to timely file suspicious activity reports, including at least one report concerning a money transmitter business responsible for wiring millions of dollars from primarily cash deposits to beneficiaries in Pakistan, India, and the United Arab Emirates.”

In another part of the report, the specifics of their lack of oversight were exposed.

(F)rom April 1999 through August 2002, one customer who operated a sportswear business purchased approximately $674,390 in cashier’s checks, all individually purchased below the $3,000 Bank Secrecy Act record-keeping threshold for monetary instrument transactions. Concurrently, from April 1999 through August 2002, the same customer engaged in a pattern of structured transactions involving over $6,199,616 in cash deposits in amounts under $10,000 per deposit. Ultimately, in December 2002, the Bank discovered that this customer had conducted nearly $10 million in cash transactions between April 1999 and November 2002.

Even more troubling is the fact that since 1999 the lead in house counsel for Foster Bank was 40th Ward Alderman Patrick O’Connor. Though O’Connor has properly listed his work at the bank on all election filings, he’s downplayed if not hidden his role at the bank from his constituents, with almost no stories about his role there to be found.

As the lead in house counsel, a part of his duties should have been to make sure the bank was in compliance with such things as the Bank Secrecy Act, which the Department of Treasury said the bank violated repeatedly in their report.

A call to Alderman O’Connor’s office was left unreturned.

Despite already being cited for egregious violations of the Bank Secrecy Act, Foster Bank was again cited in 2012, this time by the FDIC and IPFDR, for unsafe banking practices.

Though that order was formally entered on May 16, 2012, and called on Foster Bank to totally reorganize its board and banking practices, the same order was terminated on February 21, 2014, and the matter was deemed closed.

The two signatories of both orders were Anthony Lowe, the Chicago Regional Director of the FDIC and Manny Flores, the head of the IDPFR, and Park’s superior at the IDPFR.

Prior to heading the IDPFR, Flores was a colleague of O’Connor’s, serving as the 1st Ward Alderman, serving from 2003 until January 2010, when he was appointed head of the IDPFR.

In the interim, Foster Bank was merged into to the publicly traded BBCN Bancorp in April 2013,.

Lajuan Williams-Young, a spokesperson with FDIC declined to comment saying instead, “The FDIC does not comment on consent orders,” and suggested questions be directed to Foster Bank.

The investor relations specialist at BBCN is Angie Yang, who also didn’t respond for comment.

One Response

  1. harry britt

    yes we are voting against our own interest we constantly vote the same people into the positions and the only time we see them is some one with a name dies they come to the funeral.i live in houston red state texas my grandparents would ride us through a real bad part of town iwas a kid late sixties i can go thru there today and it still looks the same shelia jackson lee and al green are the two they send to washington for our districts they are just like the president cheer leading for illegal undocumented immigrants what ever while we beg some must go to labor halls just to try to get a days work the democrats do nothing for us but say get in line and vote get you some food stamps we want more than food stamps it did me some good to see that video because i was a little worried the demos would lose the senate but hell we arent going to get anything out of it any way we need new black leadership thats not owned buy the elite.

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