Illinois mayor settles muni bond fraud charges: SEC

Reuters News
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Posted: May 19, 2016 7:09 PM

WASHINGTON (Reuters) - The mayor of Harvey, Illinois, has agreed to pay $10,000 and never participate in a municipal bond offering again as part of settling fraud charges, the Securities and Exchange Commission said on Thursday.

Harvey officials had sold bonds to build a hotel, but then allegedly diverted at least $1.7 million from the sale proceeds to payroll and other operational costs. The SEC says that Mayor Eric Kellogg signed off on important documents used to sell the bonds, committing fraud.

The regulator added that Kellogg settled the charges without admitting or denying the allegations.

(Reporting by Lisa Lambert; Editing by Chris Reese)