Man Who Lives In Mansion May Have Bilked Housing Group

FORT LAUDERDALE, Fla. - A man charged with defrauding the Chicago Housing Authority out of more than $12 million is living in a sprawling Florida waterfront mansion valued at $5.2 million.

Joseph Polichemi, 62, and his wife, Catherine, have lived in the modern, Spanish-style home on exclusive Idlewyld Island since 1993 when the home was built, according to family members and friends.

Earlier that year more than $12 million in Chicago Housing Authority pension funds were wired to a bank account in Luxembourg controlled by Polichemi, said FBI Agent James Applebaum.

Federal agents have traced only $4 million.

In testimony during Polichemi's bond hearing yesterday in U.S. District Court in Fort Lauderdale, Applebaum said the home was purchased on Aug. 17, 1993, by a corporation called Doanjo Ltd.

The same day, $1.8 million was wired from a Polichemi bank account in Europe to Polichemi's personal account at NationsBank in Fort Lauderdale, Applebaum said.

Polichemi's house, named "Villa Amore," is the third most valuable house in the county, according to county tax assessments.

Polichemi was arrested on wire fraud charges by FBI agents Monday in Fort Lauderdale, shortly after being questioned by lawyers for the Securities and Exchange Commission.

They had questioned him in connection with a SEC civil suit filed in June alleging misappropriation of millions of dollars from the Chicago Housing Authority. The SEC says as much as $19 million from Authority pension funds was fraudlently invested by John Lauer, then the Authority's pension and benefit manager; Lyle Neal of High Hat, Ky., and Polichemi.

Polichemi's attorney declined to answer questions about his client's assets.

Polichemi is president of Copol Investments Ltd., a British Virgin Islands investment firm with offices in London, on Tortola Island in the Caribbean and Guernsey in the British Channel Islands.