In a lifetime of wheeling and dealing, former Cosmopolitan National Bank chairman James Wells never encountered a deal he didn`t like-even a bad one, according to those who knew him.
”He was a wild man. He`d buy anything anywhere. He was the kind of guy who wouldn`t say no to anything,” said real estate attorney Herbert Silton, who represented Wells on several deals.
Imprisoned as a flight risk since November on a federal bank fraud charge, Wells, 61, was indicted last week as part of a wide-ranging, ongoing federal investigation into his operations at the bank.
The indictment accused Wells of causing the bank to extend $2.3 million in unsound loans to former State Treasurer Jerome Cosentino, federal income-tax evasion, bank fraud and making a false statement to obtain a passport. Cosentino also was indicted.
Wells gained control of Cosmopolitan in 1986. He outmaneuvered and outbid competitors for the bank, which cost Wells and a group of investors $27.5 million.
For Wells, the multimillion dollar purchase of the bank was one of those investments he couldn`t refuse. Critics contended he paid more for the bank than it was worth.
Almost immediately after taking over the financial institution, he began gambling with his own personal investment, as well as the $83 million in assets of the bank, by extending risky loans to borrowers whom others deemed unworthy of credit, court records show.
By the time Wells was ousted by federal regulators in 1990 for allegedly converting more than $142,000 on the remodeling of a restaurant he owned, the bank had $9.5 million in bad loans on its books and was headed toward insolvency.
”Jim Wells could have been one of the finest bankers in Illinois,” said Michael Cione, a businessman and bank customer who dined with Wells.
Instead, the bank changed his personality, Cione said. Wells became a man who his business acquaintances said had a knack for knifing them in the back. ”Almost everyone disliked him over the way he treated people and his business activities,” testified FBI agent Anthony D`Angelo, relating interviews he conducted with acquaintances of Wells. ”I would have to say a lot of these people were his friends.”
Wells was a flashy and flamboyant entrepreneur-boisterous, brash and autocratic, friends and acquaintances say.
Wells was once asked to describe the job duties of one of his top managers. He replied: ”To do what he was told.”
Even before buying the bank, as the owner of his own trucking firm, he was the limo-driven executive with tailored French-cuffed shirts and a diamond pinky ring.
In a 1982 court case, he once described his jet-setting lifestyle. ”I spend December and January in Sarasota. I spend February in Hawaii. . . . Then I usually go to Europe one or two times in there for 10 days.”
For Wells, business deals were done over fancy meals at some of Chicago`s most exclusive restaurants where chefs prepared special meals for him and his guests.
At his business office over the deli that was part of his former wife`s inheritance, he affixed larger than life-sized posters of himself amid a gallery of sports celebrities, stars and politicians.
To his high school buddies at Oak Park-River Forest High School, who testified on his behalf at a January detention hearing, Wells was a fun-loving gentleman who is innocent of the charges.
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”I know his character. In my opinion, he`s being detained for no reason,” said Eugene Fowler, who had known Wells since age 10.
From his youngest days, Wells was interested in politics.
In 1968, Wells was the vice president of the Young Democratic Clubs of Illinois.
In 1979, he made his only bid for public office, seeking the 44th Ward City Council seat of retiring Ald. Dick Simpson.
His campaign style was typical Wells. Wearing fancy clothes and a pinky ring, he traveled to and from campaign stops in a stretch limo, protected by two bodyguards.
One of his four opponents in the race recalled Wells pulling up to a working-class tavern, jumping out of the limo, and walking into the bar followed by his bodyguards, asking for votes.
”He just didn`t fit in,” said the opponent.
Wells campaigned with the promise to bring the ward back to the
”tradition of Charlie Weber,” an infamous alderman known for protecting organized crime gambling dens in the ward.
Two days before the election, police bomb and arson units rushed to Wells` campaign headquarters after campaign workers had discovered a bomb.
Federal authorities have been told within the last year that the bomb was a campaign publicity stunt, a last-ditch effort to generate votes for Wells, according to court testimony.
The stunt didn`t work. Wells garnered only a handful of votes.
A year after his defeat at the polls, Wells turned again to the man who had planted the bomb in his campaign headquarters, according to court testimony.
The ensuing fire at a warehouse at 3615 S. Iron St. owned by Wells and an associate was said to be the second largest in Chicago history. It would make Wells more than $800,000 from just two of four insurance claims, according to court records. Wells had purchased the aging warehouse in November 1979, for just $16,000, records show, and he had paid the alleged arsonist just $7,000, according to court testimony.
By 1982, Wells testified his businesses had expanded. He now controlled more than a dozen firms, including several trucking outfits.
Wells would begin amassing property in the neighborhood surrounding the bank, hoping to cash in on the area`s resurgence.
Much of the property was abandoned land or crumbling buildings, some purchased for back taxes at county sales. He bragged to friends that he was burning buildings in the neighborhood that he had purchased to collect insurance, according to court testimony.
When Wells gained control of the bank, he immediately began courting his political friends and his old-time business associates to drum up new business for the bank and boost its deposit of government funds.
The bank formed its own political action committee to dole out campaign donations to favored candidates and extended loans to several political figures on real estate deals as well as the controversial loans of more than $2.3 million to Cosentino.
Cosentino was indicted on check-kiting charges and will plead guilty, according to his attorney.
Ironically, it was Wells` love of good food that led to his downfall.
The grand opening of the Le Coq Au Vin, one of three restaurants Wells owned at 1400 N. Lake Shore Drive, lasted five nights.
Federal banking regulators discovered that Wells had diverted $230,000 from the bank to remodel the restaurant complex where the bank had leased space for a branch facility.
The discovery sparked the federal investigation that led to his being charged in November, when he was arrested by the FBI on a federal bank fraud charge. At the time of his arrest, authorities contended he had assembled cash and phony identification and passports and was preparing to flee the country. Wells` fall from fame and fortune has been rapid. Since his arrest, U.S. marshals have replaced the bodyguards and chauffeurs who once escorted him. Wells now hobbles to courtroom appearances, suffering from complications of diabetes and heart disease. And instead of custom-made suits, he now appears in drab prison coveralls.