Evanston officials say they hope to recover most of the nearly $1.2 million in city funds put at risk by an alleged fraud involving the Illinois Metropolitan Investment Fund.
The fund, a short-term investment vehicle used by many local governments in the region, held nearly $37 million in Evanston funds when the trouble was discovered.
It involved allegedly bogus loan repurchase agreements recommended to IMET by Pennant Management of Milwaukee with First Farmers Financial, an Orlando, Fla., firm whose chief executive, Nikesh Patel, has been arrested on fraud charges.
In response IMET restricted its customers' access to a portion of their funds IMET held.
In Evanston's case, Assistant City Manager Marty Lyons says, that amounts to just under $1.19 million — or about 3.2 percent of the total funds the city had at IMET.
Lyons says IMET now expects to recover 60 to 70 percent of the $50.4 million it lost in the alleged fraud, A hotel chain owned by Patel is being sold and professional liability insurance of the entities involved may pay some of the rest. Other legal actions may make it possible to recover nearly the full amount.
Since the troubles were discovered, Evanston and many other government agencies have pulled most of their remaining funds out of IMET. In Evanston's case, Lyons said, the fund were moved to a state-run investment pool for local governments.
Lyons says the city's total funds at IMET, including the restricted amount, is now down to just under $3.8 million — or about 10 percent of what it had there previously.