April 14--The former president of a financially strapped suburban water district pleaded not guilty Tuesday in Chicago to federal fraud charges alleging he stole more than $33,000 from the district's coffers for his personal use.
Mark McDonald paused for a moment when the judge asked him if he understood the charges in the 19-count indictment.
"I hear 'em, but I don't understand 'em," said McDonald, 57, wearing a gray University of Illinois sweatshirt and jeans.
That led U.S. Magistrate Judge Young Kim to call a recess, but after conferring with his lawyer outside the courtroom, McDonald said he understood after all.
The indictment, which was unsealed Tuesday, includes 15 counts of fraud, three counts of filing false tax returns and one count of making a false statement to a law enforcement officer.
From 2007 to 2010, McDonald was the president of the Moecherville Water District -- one of the smallest in the state, serving a working-class neighborhood east of downtown Aurora.
A front-page Tribune story in 2011 highlighted the district's financial plight after it failed to make a single payment on a $3 million loan from the U.S. Department of Agriculture to rebuild the water system. As a result, the district had become the first in Illinois to go into foreclosure in more than 30 years.
According to the criminal charges, McDonald was in charge of the district's operating funds, responsible for depositing checks and money orders from water customers and issuing checks to pay for expenses.
On 15 occasions in 2010, McDonald withdrew funds either directly from the operating account or took money from customers and used it for his personal use, according to the indictment. The thefts ranged from $500 to about $7,400 at a time, the charges alleged.
When he was confronted in 2013 by federal agents about a cash withdrawal he'd made for $6,600, McDonald lied by saying he had returned the money to a safe in the district's Aurora office, the charges alleged.
The Aurora man had no comment Tuesday as he left the Dirksen U.S. Courthouse. His attorney, Phillip Oliver, said there was "no merit" to the allegations.
McDonald, a handyman elected by homeowners as the water district president, said in an interview for the Tribune story in 2011 that all of the missing cash was used for district expenses.
He acknowledged hiring his girlfriend as an administrative director and her daughter as an administrative assistant. The two staffed an office open 25 hours a week for residents to pay their bills.
A federal monitor's report at the time stated both the number of employees and the wages that were paid out under McDonald's leadership were "considered to be EXTREMELY high" for a district of that size. The report said the three made a combined $111,000 a year -- $45,000 for McDonald, $36,000 for the girlfriend and $30,000 for her daughter -- along with full health insurance costing the district $2,000 a month.
McDonald countered that together they made only $77,000 and had full health insurance for just one month.
"It was a seven-days-a-week job," he said at the time.
"I was there all the time. I got a whole pile of (expletive) dumped on my lap," McDonald said. "I didn't even know what I was doing. I didn't have a clue. But we managed to figure it out."
McDonald said he tried to do the best he could.
"They can say whatever they want, I really don't care," McDonald said then of the federal government. "They can accuse me of whatever they want, but everybody in the community knows. They'll back us up 100 percent."
Each fraud count carries a maximum penalty of 5 years in prison if convicted.
jmeisner@tribpub.com
