Podcast: Play in new window | Download (Duration: 12:08 — 16.7MB)
In 2008, Satish Gabhawala ran a motel off the interstate in Harvey, Illinois. The motel had a 24-hour diner and was used primarily by truckers. But Gabhawala had a vision: he was going to transform the motel into a Holiday Inn and conference center.
There was just one problem: Gabhawala didn’t have the money. So he contacted an advisor, who convinced the city of Harvey to raise $14 million from bond issuances to back the project. Harvey had been in decline for years, so this was an opportunity to turn things around and generate some tax revenue.
But 5 years later, the hotel still wasn’t finished. All the city had to show for its money was a gutted building, full of exposed wires. People began asking questions. Where had the $14 million gone?
The SEC then launched a bombshell, charging the city of Harvey with fraud. They found out what happened to that money, and it wasn’t good. Millions of dollars had been misappropriated, and the city’s comptroller got rich in the process. It was a complete mess. And before it was all over, someone would end up dead.