Bridgeport bank failure: Feds have evidence of income-tax fraud, sources say

When federal regulators shut down a century-old bank in Bridgeport in December 2017 amid an investigation of massive fraud and its president’s suspicious death, they scrambled to find another bank to step in.

They needed one that could manage $140 million in savings and checking accounts from the tiny but clout-heavy Washington Federal Bank for Savings and reassure the closed bank’s 4,000 customers their money was safe.

Up stepped Royal Savings Bank, another small bank, based on Chicago’s Southeast Side.

Royal took over the Washington Federal deposits even as federal investigators were working to untangle what they later determined was $82.6 million in fraudulent or questionable loans made under Washington Federal president John F. Gembara — who was found dead in a bank customer’s bedroom in Park Ridge, with a rope around his neck, shortly before the bank was shut down.

Read more: https://chicago.suntimes.com/2020/3/13/21175717/bridgeport-bank-failure-washington-federal-bank-savings-tax-fraud-11th-ward-democratic-party