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Two Indicted for Loan FraudCHICAGO (UPI) — A federal and a city government employe were indicted Monday on charges of securing fraudulent flood relief loans totaling $14,900 two years ago. A federal grand jury indicted the two—Small Business Ad-;| ministration employe Jerry P. Callahan Jr., 48 and former Calumet City employe Herbert A. Young, 36 — on 12 counts, including bribery, submitting false loan applications, submitting false inspection reports and obstruction of justice.U.S. Attorney James Thompson said the indictments were the fourth and fifth in an alleged scheme uncovered during nearly a year of federal investigations, jj Already under federal indictment were Calumet CityPolice Chief Robert Rajewski, currently on leave, and Steven H. Ostrowsky, a South Side auto parts dealer.James P. Konos, Dolton, was convicted for submitting false statements to the SBA and placed on two years’ probation.1 Young and Callahan were accused of arranging fraudu-I lent loans after Cook and DuPage counties were declared a disaster area in 1972. Torrential rains lashed the two counties Aug. 25 and 26 of that year.The indictment charged that the two men aided and abetted in the submission of the false loan applications and that Callahan accepted $1,000 brides for each of the three loans. Under a now extinct SBA loan program, the loans were considered “cancellable,” and therefore did not have to be repaid.
Newspaper Details
Galesburg Register Mail
Galesburg, Illinois, US
Tue, Jul 16, 1974
Page 2
Full Page
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IN, USA 06 Jan 2020
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