Former Cook County Land Bank manager charged with using straw purchasers to enrich himself, defraud system meant to help blighted communities – Chicago Tribune

A former manager at the Cook County Land Bank Authority has been hit with a federal charge alleging he used straw buyers to fraudulently purchase and resell blighted properties and secretly set up a property management company that raked in more than a million dollars in ill-gotten maintenance fees.

Mustafaa Saleh, 36, of Chicago was charged in a criminal information made public Tuesday with one count of wire fraud, which carries a maximum sentence of 20 years in federal prison.

An arraignment date has not been set, but defendants charged by way of information, as opposed to a grand jury indictment, typically intend to plead guilty. A lawyer for Saleh could not immediately be reached.

The charge comes nearly a year and a half after the Tribune first reported in June 2021 that Saleh had been named in a subpoena sent by prosecutors to the Land Bank Authority asking for records as part of an ongoing criminal investigation into the program, which was formed to promote economic development in blighted communities that’s also been the subject of controversy.

The investigation into other aspects of the Land Bank Authority is ongoing, a source familiar with the case said.

The subpoena sent May 21, 2021, requested records involving the sale of 24 properties by the land bank as well as emails and other records relating to Saleh, a $75,000-a-year senior asset manager for the Cook County Land Bank Authority responsible for overseeing all property acquisitions and holdings for the agency. County records show Saleh left the agency in 2019.

Land Bank Authority employees are prohibited from purchasing a property from the agency unless it would be used for the employee’s primary residence.

Over a five-year period beginning in 2016, Saleh used straw buyers to purchase six properties from the agency on Saleh’s behalf, then redeveloped, resold, or otherwise used the properties for Saleh’s financial benefit. The properties were located in Chicago and the nearby suburbs of Oak Lawn and Midlothian, the information stated.

The information also alleged Saleh formed a property maintenance company, Evergreen Property Services, and directed another individual to pose as its owner. Over the next three years, he caused Land Bank Authority to contract with Evergreen and pay more than $1 million for property maintenance services.

At the time of the Tribune’s report on the subpoena, Cook County Commissioner Bridget Gainer, D-Chicago, who is the land bank’s chairwoman, characterized the criminal investigation as a “document request” but declined further comment. A Land bank spokeswoman said the agency is cooperating with investigators.

“It’s news to me,” Cook County Board President Toni Preckwinkle said when asked about the subpoena.

Records show that in September 2020, a year after Saleh left the Land Bank, he appeared at the agency’s monthly meeting to report that he had surpassed the one-year period prohibiting former employees from purchasing properties from the agency.

“You’re correct in that the county rule is one year and that’s really all we can say today,” Chairman Peter Friedman said, according to minutes of the meeting.

“I just wanted to note that for the record and what I would do naturally is I would like to move forward and I will begin applying for properties; but, again, I just wanted that on public record,” Saleh said, according to the minutes.

Meanwhile, the federal subpoena sought all documents records, memos, notes and correspondence, including but not limited to email communications, pertaining to any properties obtained and sold by the Cook County Land Bank Authority involving Saleh.

Prosecutors also sought “any and all correspondence” related to Saleh’s resignation.

In addition to Saleh, the subpoena requests records on a company called Dynamic Developers. State records show Saleh is the founder and president of Dynamic Developers Inc.

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According to the biography he had on the Land Bank’s website, before working at his county post, Saleh had previously worked as a portfolio manager for Galaxy Properties “where he oversaw residential and commercial assets” and “managed property maintenance, facility projects, and new construction projects.”

When he filed for bankruptcy in 2015, however, Saleh didn’t mention any work for a Galaxy Properties. Instead, he said in the sworn paperwork that he was a sales manager at Galaxy Furniture, a discount furniture store on the 3400 block of West Montrose Avenue, where he earned about $2,600 a month.

Saleh, who said he’d previously worked as a taxi driver, listed more than $3,000 in back taxes owed to the IRS as well as tens of thousands of dollars in outstanding student loans and credit card debt. The bankruptcy was discharged several months later, records show.

The charges against Saleh come just weeks after Preckwinkle selected Jessica Caffrey, the former deputy chief of the county’s Bureau of Asset Management, to be the new executive director of the Land Bank Authority — the third leader for the agency in the past two years.

The Land Bank Authority, which was established in 2015, has received plaudits for the work it does to restore properties in distressed neighborhoods by acquiring vacant, abandoned, foreclosed and tax-delinquent properties to prepare for sale to rehabbers and developers.

But it has also been the source of scrutiny and controversy. The Land Bank has been the subject of Sun-Times investigations probing its deals, prompting Preckwinkle to commission an outside audit that determined the agency needs to do more to avoid conflicts and ensure it’s selling land to qualified buyers.

It was also criticized by Cook County Treasurer Maria Pappas for taking properties off the market, slowing potential development in blighted areas.

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