Ex-township officials took out a secret loan to help youth. It didn’t.

Former East St. Louis Township Supervisor Oliver Hamilton and his sister, June Hamilton Dean, borrowed $200,000 from a local bank without board approval to fund a summer jobs program for disadvantaged youth, but the money largely was used for township payroll and expenses, including thousands of dollars illegally charged by Hamilton on a taxpayer-supported credit card.

The money was transferred from a youth employment business checking account that could be accessed only by Hamilton and his sister, who was then a $33,000-a-year financial consultant for the township. She also had check-signing authority and a township credit card.

Overall, nearly $800,000 in state grants and unsanctioned loans that were meant for the jobs program ended up paying the township’s payroll and expenses, including Hamilton’s monthly credit cards bills for personal purchases. Hamilton is serving five years in federal prison for wire fraud involving at least $40,000 in illegal credit card spending.

Hamilton Dean, 55, of Swansea, was charged Wednesday with felony loan fraud. She could not be reached for comment. Her attorney, Justin Kuehn, declined to comment.

Two years of bank statements reviewed by the BND revealed the township received $634,800 in youth employment grants from the Illinois Department of Natural Resources in 2013 and 2014. Bank records from the youth fund checking account showed just $232,644 was used for the program.

Another $300,000 was borrowed from a $1.2 million certificate of deposit, including the $200,000 loan signed for by Hamilton and Hamilton-Dean, according to records obtained by the News-Democrat under the Freedom of Information Act. Transfers were made from one account to another by Hamilton, who simply called First Illinois Bank to make the request.

“I had no idea this was going on,” township Trustee Edith Moore said. “They didn’t bring this to us.”

Another township trustee, Troy Mosley, agreed. “I didn’t hear a thing about it.”

The summer youth jobs program began with the $200,000 loan from the township’s CD signed July 2, 2013, by Hamilton and Hamilton Dean, a few weeks before receiving the expected IDNR grant. In the loan documents, the Hamiltons attested that their trustee board had approved the loan the day before, but the board, which usually breaks for the summer, didn’t meet July 1 or any other day in July or August 2013, according to the township’s minutes.

The 2013 IDNR grant revenue for $174,000 was received by the township three weeks later, but the loan was not repaid.

In 2014, the youth program was renewed when Hamilton transferred another $100,000 from the township’s CD into the summer youth program account. It’s not known why the original $200,000 required a loan arrangement instead of just a transfer.

IDNR’s Youth Recreation Corps’ grants restricted use of the money solely to paying youth workers ages 14 to 18 a wage of $9 a hour, and young adults $12 an hour to supervise them. The purpose of the grant is to “further recreation and conservation.”

However, Hamilton Dean was paid $2,500 in 2013 from the youth account as a “grant writer,” according to canceled checks.

“A grant writer would not be eligible,” because they would not be getting paid to work in the program or to supervise others, according to Ed Cross, IDNR spokesman. Unlike many grant procedures, the IDNR process only required filling out a form supplied by the state.

In a written response, Cross said the township received “clear instructions” that current township employees could not be paid from the grant.

In 2014, Hamilton-Dean received a check for $6,912 marked “Youth Fund” with no explanation. The check was drawn from the general fund checking account.

In 2013, the township received $174,000 from the state to run the program. The next year, it received $460,800. Township bank records showed youth workers were paid $129,784 in 2013 and $102,860 in 2014. Among the workers receiving checks were Hamilton Dean’s daughters, who worked as supervisors in the program. In 2013, Remy Dean, then 24, was paid one check of $726. In 2014, Rully Dean, then 21, received three checks for a total of $1,407.

A required outcome report to IDNR detailing how the grants were used stated the youth workers were sent to several East St. Louis businesses, including Hamilton Construction. The report also stated that workers would be mowing and landscaping at the township office on State Street, work that already was being paid by the township through a contract with Padrone Construction, an unregistered company owned by the manager of Hamilton’s unlicensed boarding house.

Under the terms of the grants, the township was supposed to return any unused money to the state.

Bank records showed that $311,118 was transferred from the youth fund checking account to the township’s general fund, where it was available to pay any expense. In 2013, $70,000 was transferred. In 2014, $150,000 was transferred. In 2015, after the program was scrapped by the state, $91,118 was transferred from the youth employment account to the general fund. Most transfers were done by a phone call to the bank from Oliver Hamilton.

The township repaid $28,000 to IDNR from the 2013 grant, and $15,000 from the 2014 grant but still owes $121,000 for that grant, according to an IDNR document.

Current Supervisor Alvin Parks, who took office this year, said he had no knowledge of the balance owed to IDNR. In May, Parks and longtime township consultant George Laktzian signed over $200,000 from the certificate of deposit to repay the original $200,000 loan taken out by Hamilton and Hamilton Dean.

An investigation last year by the News-Democrat showed Hamilton spent $230,000 over four years on a township credit card on such things as trips to Las Vegas with his wife, tens of thousands of dollars in building supplies, construction equipment and tires for a tractor owned by Hamilton Construction, gasoline and car washes for his personal truck and donations to friends and political allies. Hamilton Dean also used a township credit card to make questionable purchases, including dinners, a trip to Chicago and a honey baked ham just before Christmas. She was not charged.

This story was originally published October 25, 2017 at 11:01 AM with the headline "Ex-township officials took out a secret loan to help youth. It didn’t.."