A north suburban lawyer, described by his neighbors as a religious man and devoted father, was ordered jailed by a U.S. District Court judge Tuesday when he appeared for arraignment on charges that he bilked 17 clients of $570,000.
James J. Hardy, who has law offices at 3217 Lake Ave., Wilmette, was indicted for a second time Monday on charges that he fraudulently pocketed proceeds from settlements in four wrongful death cases, eight auto accidents, a dog bite case and the sale of four homes.
Hardy, 46, father of nine children, was locked up after a federal prosecutor contended that there was a strong likelihood that Hardy would continue to cheat clients if he were allowed to post bond.
Judge Nicholas Bua sent Hardy to the Metropolitan Correctional Center at the request of Assistant U.S. Atty. Joseph Hartzler. Bua also scheduled a hearing for Thursday to determine whether Hardy should remain in custody under provisions of the federal Bail Reform Act of 1984.
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One of Hardy`s neighbors in an exclusive section of Northfield said Tuesday she did not think it was appropriate for Hardy to be locked up so quickly. ”It`s an absolute tragedy,” said the woman, who declined to be named.
”I think we better reexamine the judicial system” if Hardy gets a lengthy prison term,” she said.
Asking that Hardy be kept in custody, prosecutor Hartzler told Bua on Tuesday, ”Your honor, the government has every reason to believe that if Mr. Hardy is allowed to remain free, he will cheat other innocent victims.”
Under the Bail Reform Act, a federal judge is empowered to jail defendants immediately if the government asserts that the defendant poses a danger to society if he is allowed to remain free. To win his freedom, the defendant must request a hearing and convince the judge that no such danger exists.
Hartzler said he and a federal agent met with Hardy on Dec. 13, 1985, and told him that he was under investigation in connection with the theft of a $70,000 settlement belonging to the parents of a 15-year-old-boy who was electrocuted. The prosecutor said Hardy broke down in tears and confessed to having pocketed the $70,000.
Yet, three days later, the prosecutor charged, Hardy allegedly pocketed $15,000 belonging to an elderly woman confined to a nursing home in Phoenix.
”Three days after we talked to him, he forged a $15,000 check belonging to a 78-year-old woman confined to a nursing home and cashed the check, all without the knowledge of the victim,” Hartzler told the judge.
Tuesday`s hearing began as a routine arraignment with Hardy pleading not guilty to five counts of mail fraud contained in a federal indictment returned Monday.
Hartzler told Bua that he and Hardy`s attorney, Darrell McGowen, expected Hardy to plead guilty to the charges and that there would be no trial.
Bua set Monday for a hearing, but Hardy said he faces a drunken-driving charge in Cook County Circuit Court that day, and asked for another date. Hartzler then asked that Hardy be locked up.
Hardy, 2319 Pebble Fork Lane, Northfield, was indicted the first time, in March, on charges he took the $70,000 death settlement belonging to the parents of a Palatine boy who had been electrocuted.
Later, other former clients of Hardy came forward, telling the government that they believed that Hardy had defrauded them. The government investigated their claims and reindicted Hardy on Monday on charges that he bilked the Palatine parents and 16 others of more than $500,000.
Hardy, his wife and nine children live in a large, two-story brick home on a private road in Northfield, a road which winds through an exclusive area containing only seven homes. All the homes are on one-acre lots or larger;
some of the homes have swimming pools or tennis courts in back.
Hardy`s yard had a red swing set, a tree with a wooden swing, a hammock between two trees, a picnic table and an outdoor grill.
Neighbors said the youngest Hardy children are in elementary school and the oldest attend Brigham Young University in Utah. One neighbor said the children did not play on Sunday because of their Mormon faith.
Neighbors said the Hardys were believed to adhere to the spartan principles of their faith, including spurning caffeine and alcohol.
They expressed shock at the fraud charges against Hardy.
”Jim and the family are a lovely, nice family,” said one neighbor, who also declined to be named. ”Like everyone else, I was quite surprised. It`s just really a shame. I feel so much for his wife and for Jim.”
But the neighbors admitted there has been talk since Hardy`s first indictment that he was in financial trouble. Some said they could see how a man could get in such trouble living in an expensive area with nine children. Neighbors also said the Hardys had recently sold their home but had not yet moved out.
The neighbor who objected to Hardy`s jailing Tuesday said the Hardys were ”one of the finest families I`ve ever had the pleasure of living next to. If I could, I would intentionally live next door to them. They have wonderful, loving children.”
In one of the wrongful death cases, Hardy is accused of pocketing the entire $140,000 he collected from the Milwaukee Road on behalf of an Elgin woman whose son was killed by a freight train in June, 1979.
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On three occasions, the indictment charged, Hardy defrauded three persons out of thousands of dollars while representing them in the sales of their homes. In one instance, Hardy is accused of pocketing $21,249 belonging to a Winnetka couple, telling them that the funds were used to pay off a fictitious lien the State of Illinois had on their home.
Hardy typically would settle the personal-injury claims without his clients` knowledge and then hold them at bay, telling them, for years in some cases, that their lawsuits still were pending in Cook County Circuit Court, the indictment charged.
Among these cases, Hardy was accused of pocketing a $20,000 settlement check from a homeowner whose dog had bitten an 8-year-old neighbor girl in the face and then sent the victim`s father, whom he was representing, 11 letters advising him of the case status.