A federal grand jury indicted two Chicago-area community thrifts this month, charging that they stole customers' money to make political donations and other payments.

South Chicago Bank, Chicago, and Advance Bank, Lansing, Ill., were both named as defendants in a case pending in U.S. District Court for the Northern District of Illinois. The 14 criminal counts include multiple charges of mail fraud and making false statements to bank regulators, said U.S. Attorney Scott R. Lassar.

Advance Bank, a $308 million-asset thrift, was also charged with stealing $472,000 from the Resolution Trust Corp. and trying to steal $7.3 million more. South Chicago Bank, a $212 million-asset thrift, is also charged with stealing money it owed correspondent banks.

The thrifts, which are both subsidiaries of Homewood, Ill.-based Advance Bancorp, said they are victims of a disgruntled former officer who agreed to testify against them as part of a plea agreement.

The federal government charged that for at least 12 years the two thrifts, acting through three unnamed officers, "allegedly stole, embezzled, and misapplied" an unknown amount from Christmas club accounts, inactive accounts, Social Security funds, and safe deposit boxes, Mr. Lassar said.

The institutions allegedly used the stolen money to buy tickets to political and community functions, make political campaign contributions, and fund other activities that the three bankers selected, he said.

Donald E. Donley, secretary for Advance Bancorp, said the company is "disturbed" by the charges. The thrifts "consider themselves to be victims in this matter," he said, because they reported one officer's "unusual transactions" to state and federal regulators in 1991 and later cooperated with investigators.

Assistant U.S. Attorney Randall Samborn said the three officers allegedly involved in the fraud were not named in the indictment because they were not charged. He noted, however, that the investigation is continuing. Mr. Samborn would not comment on whether the officer turned in in 1991 would testify against the bank.

Jeffrey C. Gerrish, a lawyer who specializes in banks at Gerrish & McCreary in Memphis, said it is unusual for the federal government to charge banks rather than individuals in a fraud case.

But Mr. Samborn noted that in 1996 Capitol Bank and Trust in Chicago was charged with bribery and pleaded guilty to paying kickbacks to labor union organizers in exchange for managing the unions' pension accounts.

Mr. Samborn would not say why Advance Bank and South Chicago Bank were charged instead of the three officers referred to in the indictment. He said, however, that the U.S. attorney's office typically charges corporations with crimes if they have benefited from the alleged criminal activity, if high-ranking executives are involved, and if the banks do not cooperate with investigators.

If convicted on all counts, Advance Bank faces a maximum penalty of 25 years' probation and $5 million of fines, and South Chicago faces a maximum penalty of 45 years' probation and $9 million of fines. If the banks get probation, their actions would be under supervision by the federal court for specified periods.

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