Dolton administrator charged with bankruptcy fraud, denied working for village, feds allege
Keith Freeman, the Dolton village administrator and a manager for Thornton Township, has been charged with bankruptcy fraud, according to a federal indictment, the U.S. attorney’s office in Chicago said Tuesday.
It’s alleged the 45-year-old Orland Park resident made false statements in his bankruptcy petition filed earlier this year to conceal from creditors his assets and sources of income and a significant claim against him.
The indictment against Freeman, Dolton’s top appointed official under Mayor Tiffany Henyard, comes as Henyard herself is under federal scrutiny, with investigators questioning people both inside and outside of the village, according to a federal law enforcement source.
Henyard has not been charged with any wrongdoing, but trustees who are at odds with the mayor have hired Lori Lightfoot, Chicago’s former mayor, to act as a special investigator to examine spending by Henyard as well as a village-financed trip to Las Vegas, purportedly made to bring commercial business to the village.
The indictment alleges that during a meeting with his creditors, while Freeman was under oath, he falsely represented he was not an employee of Dolton and that he did not receive payment from Dolton, according to a news release from the U.S. attorney.
He is charged with one count of bankruptcy fraud and, if convicted, could be sentenced to up to five years in a federal prison, according to the news release.
Arraignment has not yet been scheduled.
Freeman earns some $100,000 a year from his Dolton job, and underreported his income in his 2022 federal tax return, according to the indictment.
He filed for Chapter 7 bankruptcy Jan. 3 of this year, and the filing included information about all of his assets and sources of income, as well as any claims against him, according to the news release.
The indictment alleges Freeman made several materially false statements and omissions in the document, including knowingly underreporting income he derived from his employment as both Dolton village administrator and the municipality manager for Thornton Township, as well as fees he received from his private consulting business.
Freeman also allegedly concealed that Robbins, where he was village administrator from 2017 to 2021, filed a claim against him related to about $90,396 that Freeman received in excess of his authorized salary while he was a village employee, according to the indictment.
Freeman also furnished the Chapter 7 trustee with a purported copy of his 2022 individual income tax return, which represented that his total income from employment was $45,186. The indictment states that Freeman knew he had not filed an income tax return for that year, and that his actual income, which included a $100,000 salary for the Dolton position alone, substantially exceeded that amount.
It was further part of the scheme that on Jan. 30, 2024, while testifying under oath at a meeting of creditors, Freeman falsely represented that he was not a Dolton employee and that he did not receive payment from Dolton, the indictment states. The following month, Freeman allegedly caused his pay from Dolton to be directly deposited into a recently opened bank account that he had not disclosed to the creditors or the Chapter 7 trustee.
Freeman did not immediately respond to a request for comment Tuesday.
A public relations firm working for Dolton said it is aware of the indictment but that “as this is an ongoing investigation we will refrain from making any further comments at this time.”
According to the indictment, Freeman earns about $70,000 from his township job and also received a little more than $24,000 in consulting fees working for a Chicago-area business that financed the lease and/or purchase of firefighting vehicles and other equipment to municipalities.
Freeman’s bankruptcy filing showed assets of about $5,200 and debts of about $174,700, although the indictment charges that the total debts he listed was not accurate because it did not include a claim Robbins had filed against Freeman for alleged unauthorized payments to him.
In a filing in his bankruptcy proceedings, Freeman reported monthly income of about $7,100, although, including money he earned from Dolton and the township, the actual amount was closer to $15,000 each month, according to the indictment.
The indictment alleges that while, for 2023, Freeman reported income of about $99,600, although his annual income for that year was closer to $200,000.
It’s alleged that just days before a February meeting with his creditors, Freeman tried to shield his income by having pay he received from Dolton directed to the bank account of a business he was sole owner of, Government Staffing Advisors Inc., which had been incorporated in July 2023.
In his bankruptcy filing, Freeman said he does not own any property, such as real estate or vehicles, and had $175 in a checking account and his total personal property was valued at $5,200.
Unlike a Chapter 11 bankruptcy filing, Freeman, filing under Chapter 7 of the federal bankruptcy code, indicates that no assets will be available to pay to creditors once the case is concluded.
In his bankruptcy filing, Freeman indicates he owes the Illinois Department of Revenue tax debt of $4,900, and the Internal Revenue Service almost $16,000.
The filing shows that American Express is owed $11,800 while Capital One is owed $25,000.
He also has an unpaid cell phone bill of a bit more than $3,300, according to the filing.
The document shows that two high-end vehicles — a 2018 Maserati and 2019 Lincoln — with a total value of more than $49,000, have been taken back by creditors.
