Advertisement

Naperville businessman guilty in $1.9 million fraud case

A Naperville businessman is scheduled to surrender next month and begin serving a three-year federal prison term, after admitting he stole more than $1.8 million from the insurance company for which he worked.

John M. Davis lives on the 11600 block of Century Circle, in the Century Trace area of Plainfield near Naperville’s far southwest side. He worked from the INSCO/DICO office at 3027 S. Route 59, in the English Rows Towne Center in Naperville.

Davis pleaded guilty in November in U.S. District Court in Chicago to a total of nine counts of mail fraud, wire fraud and misappropriation of money and premiums from an insurance company.

Judge Harry D. Leinenweber on June 26 sentenced Davis to three years in prison, and ordered him to make $1,873,391 restitution to Developers Surety & Indemnity Co., for which he worked as a regional manager.

A 24-page sentencing memorandum obtained by The Sun indicated the intricate scam began in April 2009 and lasted until September 2011. Davis during that period “secretly wrote 12 unauthorized construction insurance bonds in the name of his employer, (bonds) which had a face value of approximately $56 million,” the memorandum declared.

Davis made it appear Developers Surety “had issued and guaranteed the bonds, which was not true,” the memorandum continued. Seven construction companies and 11 project owners paid premiums of approximately $475,352 to purchase those bonds, with Davis taking that money and depositing it into his personal accounts at several banks in Naperville.

He lied when he told the construction company and project owners he had the authority to issue the bonds, according to the memorandum. “Davis knew (Developers Surety) had not agreed to be bound, because Davis had not informed (them) about the bonds.”

Davis has been involved in several high-profile, local construction projects. He wrote the bonds for the Bolingbrook police station and the Metra Railway 80th Avenue commuter train depot in southwest suburban Tinley Park.

He also wrote the bonds for an $11 million construction project in California and a $4.5 million project in Oklahoma City.

Developers Surety “issued a unique number for every bond,” the memorandum continued. “In order to make the 12 worthless bonds look legitimate, Davis used fake bond numbers,” most of which “had previously been used on other, unrelated bonds.”

“Davis made it difficult to trace the insurance premiums that he stole. Specifically, he directed most of the contractors to make their checks payable to (him), which they did.” That money then wound up in personal accounts Davis had at five Naperville-area banks.

Federal authorities said Davis forged power of attorney forms for each of the bonds, and drafted phony commitment letters, consent forms and invoices, among other crimes.

Developers Surety ultimately had to pay $1.4 million to cover all of the claims, with the bulk of that money going toward the Tinley Park project.

Authorities said Davis bought at least four luxury cars with the money. He also took his family to Walt Disney World in Orlando, Fla., and used some of the money to refurbish his house.

Davis, who is reportedly in his mid-40s, had no prior criminal record. He is expected to enter prison on or before Aug. 12, according to the U.S. attorney’s office.

0 Comments

Advertisement
Advertisement
Advertisement
Advertisement
Advertisement
  • Advertisement
  • Advertisement
  • Advertisement
  • Advertisement
  • Advertisement
  • Advertisement
Advertisement

Modal