An heir to a powerful Chicago political family went before the Supreme Court this week to challenge his conviction for bank fraud.
Patrick Daley Thompson, a former city alderman, was sentenced to four months in prison for lying about his taxes and making false statements to bank regulators. He is the grandson of former Democratic party boss and mayor Richard J. Daley, who was the mayor of Chicago from 1955 to 1976.
The case pivots on what counts as a "false" statement under a federal law that makes it illegal to influence regulators like the Federal Deposit Insurance Corporation.
In 2017, the FDIC shut down an insolvent Chicago bank with ties to Thompson, Washington Federal, and hired a loan servicer to collect the money owed. Multiple people tied to the bank were charged in an embezzlement conspiracy.
Thompson had taken out three separate loans totaling $219,000 plus interest, but the bank never demanded repayment, and Thompson only made one payment of $389.58 on the initial $110,000 loan. Prosecutors claimed during Thompson's trial that the bank gave him favorable treatment, something his lawyers denied.
When the FDIC tried to collect Thompson's debts, he claimed that he borrowed $110,000, and he disputed the full $219,000 amount.
Eventually, he settled with the government and paid the $219,000 principal - only to be charged later with making false statements.
Lower courts have split on how to interpret the law at issue, which makes it a crime to make "false" statements to influence the FDIC and other regulators.
Thompson's lawyers argue his statements may have been misleading, but they were not false in the literal sense, and therefore not criminal.
Thompson never said he owed $110,000, but rather that he borrowed that amount, which is literally true, but misleading.
"These statements were not false. He did borrow $110,000 and he did dispute owing $269,000. The first statement was misleading because it omitted important contextual information—that he later borrowed an additional $20,000 and $89,000," his lawyers wrote.
Congress has taken care to distinguish between false and misleading statements, and if they meant to criminalize misleading statements here, they would have done so explicitly, according to Thompson.
During Thompson's trial in 2022, his lawyers said he is often "frazzled" when handling his finances, but the judge rejected his request for probation. His convictions cost him his law license and position as a city alderman.
“The last four years have been a nightmare for me,” Thompson said. “For that, I’m sorry. Those mistakes have cost me dearly.”
