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Regulators investigate local lender; Investors, area banks accuse Oak Brook's Commercial Loan of fraud.

Publication: Crain's Chicago Business
Publication Date: 31-MAY-04 		Format: Online - approximately 1338 words
Delivery: Immediate Online Access
Full Article Title: Regulators investigate local lender; Investors, area banks accuse Oak Brook's Commercial Loan of fraud.(Commercial Loan Corp.)(Harvard Savings Bank)(George Washington Savings Bank)

Article Excerpt
Byline: STEVE DANIELS and JULIE JOHNSSON

A federal grand jury and state and federal regulators are investigating a west suburban commercial lender accused in a civil lawsuit of defrauding 15 local lenders that bought more than $75 million in loans originated by the firm.

Oak Brook-based Commercial Loan Corp. (CLC) filed May 13 for Chapter 11 bankruptcy protection after federal bank regulators began an examination of the firm on April 19.

Two thrifts, Harvard Savings Bank in Harvard and George Washington Savings Bank in Oak Lawn, filed suit in state court in DuPage County May 10 against Commercial Loan and its owner, Peter Hueser, accusing them of diverting more than $18 million in loan proceeds and payments, mostly to an Ohio-based steel-can manufacturer.

The lawsuit alleges that Commercial Loan diverted funds in three ways: It received payments from borrowers and didn't always pass them along to the banks; it kept funds drawn down from banks that were meant for borrowers, and it sold pieces of loans to various banks that, in total, exceeded the value of the loans themselves.

"Harvard relied on CLC's and Hueser's misrepresentations by providing funding for the fictitious draw requests and purchasing participation interest in...

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