(MCT) — A Chicago investment adviser who once represented former Chicago Bulls player Scottie Pippen was indicted on federal charges, accused of defrauding a suburban bank and two of his clients of more than $3.2 million, the U.S. Attorney’s office announced today.
Robert Lunn, 62, was charged with five counts of bank fraud in an indictment returned by a federal grand jury Wednesday.
Prosecutors allege he fraudulently obtained a $1.32 million business loan from Oak Brook-based Leaders Bank as well as separate loans of $1.4 million and $500,000 that he said were for two clients.
Lunn allegedly misrepresented to Leaders Bank the purpose of the loans for himself and his clients as well as the nature of his investment portfolio, according to the prosecutors.
When Lunn first received a line of credit from Leaders Bank for $480,000 in May 2001 he said he owned millions of dollars worth of shares from the Morgan Stanley and Lehman Brothers, according to the indictment.
Lunn later increased his line of credit twice in early 2004, to $1.32 million, the indictment said.
The indictment alleges that Lunn arranged an unsecured bank loan of $1.4 million for a client in 2002, claiming the the client wanted short-term financing to invest in an airplane.
Lunn also arranged a $500,000 loan from the same bank in 2004 for another client without that client’s knowledge or authorization, the indictment said.
Lunn is accused of using most of the money for his own benefit, making mortgage payments as well as paying $1.4 million to other investmment clients, according to the U.S. Attorney.
Neither Lunn nor Leaders Bank representatives could be reached for comment.
Prosectutors said the bank lost more than $2.7 million as a result of Lunn’s actions and are seeking to recover at least that amount.
Pippen won an $11.8 million judgment in 2004 against Lunn, claiming the adviser steered his money into dubious investments including real estate and an airplane deal, according to court papers.
Each bank fraud count carries a maximum penalty of 30 years in prison, a $1 million fine, and mandatory restitution, according to the office.