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WJBD - Local News - No FBI Investigation in Klassic Kollections II Case

No FBI Investigation in Klassic Kollections II Case

By Bruce Kropp, WJBD News

Salem City Manager Bill Gruen says the FBI has found no violation of federal law to warrant an investigation into Klassic Kollections II that abruptly left Salem last year without repaying $450,000 in low interest loans and providing promised jobs.  City Councilman Dave Black had requested the FBI be given the information because some of the same principals had been involved in earlier leaving a Missouri City under the same circumstances.   

Gruen reports the FBI did not expound on their decision not to take the case.  The city has now provided the information to the Illinois Attorney General's office to see if any state law violations can be found.  Meanwhile, Gruen says other efforts are continuing to try and recover the money.  "We're looking at the assets that they geared and pledged as part of the loan application and tracking down where that stuff is and whether the value's there where we can look at attaching to that to try to make the revolving loan fund and the TIFF fund whole with the money that went out", said Gruen.  

In June of 2011, the city approved a half-million dollar three percent low interest loan package for Klassic Kollections II.  It included $300,000 from the city's low interest revolving loan fund and $200,000 in loan money from the tax increment financing district that serves the west side industrial park area.  In return, Klassic Kollections II had promised to provide 140 to 180 jobs by the end of their second year of operation.  The company had abandoned it's leased plant in the west side industrial park before finishing their first year of operation.   

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