Adding insult to injury, a Cary financial broker under indictment in a $2 million swindle was indicted Thursday on charges of bouncing checks.
David E. Freitag, 37, who is being held in lieu of $1 million bond in McHenry County Jail, was accused by a county grand jury of bouncing $35,862 in checks while out of jail, on furlough to sell his house.
The checks were allegedly written in June and July at a Crystal Lake area auto dealership, where Freitag was trying to buy three cars worth a total of $88,000.
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The second indictment means Freitag, the father of three young children, now faces up to 28 years in prison.
He faces up to 25 years on charges of securities fraud, theft by deception and financial exploitation of the elderly in a scam that involved victims spread throughout McHenry, Kane, Lake, DuPage and Cook Counties.
Thursday’s indictment for deceptive practices carries a maximum sentence of 1 to 3 years in prison.
The bad check charge came because Freitag allegedly bounced a check for $25,862 on June 29, and another for $10,000 on July 6, on an account with a balance of negative $101 at a Rolling Meadows bank.
Freitag had opened the account with $100 on Feb. 22 and closed it on April 1, authorities said.
Freitag tried to buy the cars from the Jim M’Lady dealership at 5656 Northwest Hwy., near Crystal Lake, for himself, his wife, Donna, and another undisclosed relative, prosecutors said.
The purchases were stopped in mid-stream when a clerk at M’Lady’s bank, Harris Bank in Cary, spotted the delinquent checks on an internal bank wire.
The clerk recognized Freitag’s name because the suspect formerly had an account there, and she had helped compile documents that were subpoenaed by prosecutors in the earlier indictment.
The Harris Bank clerk called M’Lady while Freitag, who had already taken possession of a 1996 Nissan minivan after writing the first check for full payment, was back at the dealership to complete the purchase of a 1996 Maxima worth $28,000 and talk of buying a 1996 Honda, M’Lady and prosecutors have said.
The securities scam, which ran from 1991 to 1995, was a “Ponzi scheme” in which Freitag allegedly paid early investors with money he received from later investors.
Freitag promised investors, some of whom were relatives, yields of up to 20 percent, authorities said. The defendant has sold his $400,000 Cary home, and is in bankruptcy proceedings in Rockford federal court.