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Chicago Businessman Charged in Financial Crimes Investigation
at Goose Island Window Manufacturing Plant

The owner and operator of a shuttered Chicago window manufacturing plant, the company whose abrupt closure last December resulted in a high profile worker sit-in on Chicago’s Goose Island, has been charged in a financial crimes investigation alleging he engaged in a conspiracy to defraud the workers as well as the company’s creditors, Cook County State’s Attorney Anita Alvarez announced today. 

The operator of Republic Window & Doors took part in a continuing financial crimes enterprise, according to Cook County financial crimes prosecutors, who along with Chicago Police financial crimes detectives have been conducting a joint investigation into the operations of Republic since last January. 

Richard B. Gillman, 57, of Chicago, was arrested Wednesday and charged with Organizing a Continuing Financial Crimes Enterprise (a Class X felony).  Gillman was Republic’s Chief Executive Officer and majority owner.  Prosecutors allege that Gillman, along with others, conspired to steal funds from the financially failing company in its waning months of operation and engaged in a scheme to secretly hijack Republic’s manufacturing equipment to a new company that had been acquired in Iowa.  

“Gillman and others knew this company was headed for closure and instead of fulfilling their legal obligations to their creditors and their moral obligations to their employees, they devised a scheme to benefit themselves,” Alvarez said.  “Their greed even extended to using the failing company’s money to pay off the leases of two luxury vehicles.” 

Chicago Police Superintendent Jody Weis said the Chicago Police Financial Crimes Unit initiated the investigation at the request of Bank of America, a Republic creditor.

“This investigation has revealed a callous corporate culture.  Through their blatant mismanagement, the subjects in this investigation cost over 200 Chicagoans their jobs and financial security,” Weis said.  “These families were victimized by corporate greed and ignorance of fiduciary responsibility, the impact of which is far reaching.”

Before its sudden closure on December 5, 2008, Republic was a manufacturer of custom-crafted vinyl windows for new construction homebuilders, home improvement dealers and direct commercial accounts.  In 1998 the company moved its plant from a location on Diversey Avenue in Chicago to a newly constructed factory located at 1333 N. Hickory Avenue on Goose Island along the Chicago River. 

According to information presented by prosecutors in court today, Republic had experienced a sustained trend of reduced operating revenues and increased operating expenses for the last several years.  By mid-2008, Republic was in arrears on payments to creditors and the company’s insolvency was imminent.  At the time of its closing, Republic was more than $ 10 million dollars in debt to its creditors which included Bank of America, JP Morgan Chase Bank, and General Electric Capital Corporation.

Anticipating the economic demise of Republic, prosecutors allege that Gillman and others formulated and executed a scheme to defraud Republic’s debtors and its employees.  In order to facilitate the scheme, prosecutors said that two shell corporations were set up to launder more than $200,000 that was stolen from Republic accounts.  These funds were used to pay for the transportation of collateralized manufacturing equipment and to assist in the execution of the overall scheme. 

A total of 10 semi-trailer trucks were loaded with equipment from Republic in the waning weeks of operation. Three of those trailers were ultimately shipped to the location in Red Oak, Iowa, and seven were placed in storage at a trucking company in Chicago. 

Gillman is also alleged to have stolen office equipment and even pre-paid the leases on his and another company manager’s personal luxury automobiles through September of 2009 using company funds.

On Dec. 5, 2008, the Republic plant was closed with little warning to employees.  As of that date the company’s wage earners were owed money for hours they worked but for which they were unpaid, as well as for accrued vacation time and other benefits.  The workers staged a sit-in that captured national attention at a time when the nation was experiencing a dramatic economic decline.

Alvarez and Weis said the investigation remains ongoing.