Oak Brook Couple Indicted on Bankruptcy Fraud Charges

Chicago, IL — A couple who defaulted on $40 million in loans have been indicted for hiding cash and assets from creditors.

Pethinaidu Veluchamy and his wife, Parameswari Veluchamy, both of Oak Brook, owned First Mutual Bancorp of Illinois Inc., a holding company for Mutual Bank.

They defaulted on personal and corporate loans in June 2009, and federal regulators shut down Mutual Bank a month later, according to U.S. Attorney's Office, Northern District of Illinois, citing the indictment.

The indictment states the Veluchamys hid millions of dollars in assets from before Mutual Bank was shut down until at least November 2015. They're accused of "falsifying documents, moving money into domestic and foreign bank accounts and directing employees to destroy financial records," the USAO reports.

Pethinaidu Veluchamy and Parameswari Veluchamy also moved almost $8.5 million cash to one of their adult children and more than $10.1 million to the other adult child, the indictment states.

During a 2011 deposition for a different case, Pethinaidu Veluchamy claimed some of the money transferred to his children were indemnity obligations for their investments in First Mutual Bancorp. When a document he used to support his claim was called into question, he said the computer he used to make the document had crashed in a snowstorm, according to the indictment.

Pethinaidu Veluchamy, 70, is charged in the indictment with four counts of bank fraud, two counts of destroying records to obstruct a bankruptcy proceeding, two counts of making a false statement under oath in a bankruptcy proceeding and one count of making a false statement in an application for a U.S. passport.

The charges state he "caused his relatives to obtain legal judgments against him for loans for which he knew he was not personally liable, so that he could later assert those liens as superior to a bank creditor’s anticipated judgments," the USAO reports.

Parameswari Veluchamy, 65, is charged in the indictment with four counts of bank fraud, two counts of destroying records to obstruct a bankruptcy proceeding, one count of making a false statement under oath in a bankruptcy proceeding, and one count of making a false statement in an application for a U.S. passport.

According to the USAO, the maximum sentences for each charge include:

• Up to 30 years in prison and a $1 million fine for each count of bank fraud
• Up to 20 years in prison for destroying records to obstruct bankruptcy proceeding
• Up to 5 years in prison for making a false statement under oath in a bankruptcy proceeding
• Up to 10 years in prison for making a false statement in an application for a U.S. passport

Arraignments in federal court in Chicago have not been scheduled yet.