Unsealed records reveal new details about Illinois appellate judge’s alleged role in decades-old fraud scheme
Two decades ago, dozens of Black lawyers flooded the courtroom of Cook County’s chief criminal judge in solidarity over what they called prosecutors’ racist treatment of a little-known real estate lawyer from Chicago’s South Side named Carl Anthony Walker.
Coming to bear that day was the full political force of the nation’s oldest association of Black lawyers — a roster of prominent figures including several who would go on to become judges and high-ranking public officials.
The remarkable show of support came in protest over an early morning May 2003 raid of Walker’s downtown law office, where the FBI and prosecutors from the office of then-Cook County State’s Attorney Richard Devine seized boxes of records in a search for evidence against Walker and one of his real estate clients — a man later convicted in a massive mortgage fraud scheme that decimated neighborhoods on Chicago’s South and West sides.
Walker’s lawyer, William Hooks, who would later become a judge, stood before then-presiding criminal court Judge Paul Biebel and called Devine racist. No white lawyer or law firm would be subjected to such an invasion, Hooks argued.
Biebel, who had initially approved the search warrant, relented. He ordered two bankers boxes of Walker’s seized files and all three of his computers returned. Walker was never charged, although his client was later convicted of mortgage swindles bilking more than $20 million from banks and lenders.
Chicago Defender
On Jan. 22, 2004, the Chicago Defender published a page 2 story about the search of Walker’s office.
Buoyed by his court victory, Walker waged an unsuccessful campaign to disbar and sanction those in Devine’s office who he argued had unfairly targeted him because he is Black.
Then Walker won a largely self-funded judicial election in a South Side subcircuit.
Today, Walker is a respected justice on the 1st District Appellate Court, where every appeal of a Cook County case is first heard and decided. He is running unopposed in the March primary election for a 10-year term on the court.
He is known for his expertise in judicial ethics and for his skepticism of a Cook County law enforcement community with a history of sometimes heinous misconduct.
But now, 20 years later, the same courtroom drama that helped elevate his profile in 2003 has reemerged in a case on appeal before the very court on which he sits.
In late October, the special prosecutor reviewing convictions tainted by allegations of Chicago police torture by infamous Cmdr. Jon Burge asked for Walker to be disqualified from hearing one of the high-profile criminal appeals.
Burge and his associates were found by multiple authorities to have tortured people into confessions, and more than 100 people — mostly Black men — have accused them of abuse since the 1970s. Civil judgments and legal settlements in those cases have cost Chicago taxpayers more than $100 million.
Robert Milan, the special prosecutor assigned to dozens of those cases, on Oct. 25 filed a 154-page motion to have Walker tossed from one of those appeals — a move experts described as extremely rare.
Milan, who was first assistant state’s attorney under Devine when the raid on Walker’s office was conducted, argued in court documents Walker has a “deep-seated bias” against him personally and other state’s attorneys who played a role in the search.
“Justice Walker’s participation in this matter implicates serious due process concerns,” Milan wrote in his motion. “The People of the State of Illinois respectfully request that the Honorable Carl A. Walker be disqualified from participating in this case and that the matter be reassigned to a new panel of justices.”
Milan’s request remains under consideration by Walker and his appellate court colleagues — and the stakes are high.
Hanging in the balance is the potential freedom of Abdul Malik Muhammad, sentenced to 50 years in prison for a 1999 gang-related murder. Muhammad claims he was threatened by police during his interrogation, and in 2017 added allegations of physical abuse by police.
Milan — whose job as special prosecutor is to reinvestigate Burge cases and advise the trial court which convictions should be upheld and which vacated — says in court filings the evidence against Muhammad is overwhelming.
Muhammad’s legal team has for three years unsuccessfully sought to have Milan himself replaced, arguing in court documents his role as a supervisor in the State’s Attorney’s Office during the 1999 murder investigation makes it impossible for Milan to fairly decide the merits of Muhammad’s case.
The claims and counterclaims underscore a criminal justice system tainted by political and personal infighting, judge and lawyer shopping, and racial tensions stretching to the highest levels of the judiciary.
A three-month Injustice Watch investigation — including the review of thousands of pages of Cook County court records previously sealed without a public judicial order — raises new questions about the extent of Walker’s legal work in land deals later proven to be fraudulent, and what some ethics experts say are his potential failures to follow disclosure rules as he now asks voters for a 10-year term on the bench.
Walker declined to discuss the details of Milan’s pending motion, citing ethical obligations.
“Much as I would like to set the record straight regarding the incomplete and inaccurate understanding of the facts asserted in these questions, my ability to do so is constrained by my ethical responsibilities and duty as a judge to refrain from commenting on matters relating to pending or impending proceedings,” he wrote in a Dec. 8 one-page response to Injustice Watch inquiries.
However, in a brief interview before Milan’s motion was filed, Walker described himself as a victim of overzealous prosecutors two decades ago.
“I did nothing wrong. And I’ve never done anything wrong,” Walker told Injustice Watch on Oct. 3. “If they had evidence to charge, I’m certain they would have. It doesn’t take a lot of evidence to charge someone.
“That was a situation where I was actually a victim,” he said. “The Cook County State’s Attorney’s Office, rather than simply asking for files from me, they conducted a search warrant on my office. … What they should have done is simply issued a subpoena asking for the information, and as a lawyer, I would have certainly turned over everything that they asked for.”
A justice ‘greatly admired’
Born and raised in Chicago’s Englewood community, Walker, now 60, graduated from Chicago Vocational High School. He earned an undergraduate degree in accounting from the University of Illinois at Urbana-Champaign, worked as a certified public accountant, and graduated from the University of Iowa College of Law at age 29.
As a private lawyer, his practice focused on real estate, but he also handled probate, criminal, and personal injury cases. He worked part time as a hearing officer for the City of Chicago.
After he became a judge in 2006, Walker consistently earned top bar association ratings and oversaw cases sparking national media coverage.
Appellate Justice Carl A. Walker
Walker is a member of the Illinois Judicial Ethics Committee that last year helped revamp the Illinois Code of Judicial Conduct to strengthen rules about the Statements of Economic Interest required of all judges.
“He is a go-to person on ethics. His integrity is beyond reproach,” said fellow appellate court Justice Michael Hyman, who also sits on the three-judge panel Milan is seeking to disqualify.
Chicago lawyer Steven Pflaum, who chairs the ethics committee, was emphatic about Walker’s importance to the committee.
“He is a very hardworking and important member in terms of his substantive contributions,” Pflaum said. “He is greatly admired by the appellate bar. … His views carry a lot of weight.”
One potential blemish in Walker’s distinguished career began in the early summer of 2002, when the Chicago Police Financial Crimes Investigations Unit got tips about two real estate deals involving one of Walker’s clients — Kenneth Steward.
The investigation revealed that Steward masterminded a mortgage fraud scheme involving some 200 Chicago homes on the city’s South and West sides that cost lenders more than $20 million, records show. Steward is currently serving a 17-year federal prison sentence and then is set to serve two consecutive seven-year state prison sentences. He did not respond to a letter seeking comment.
Court and property records show Steward deployed professionals from the legal, banking and real estate industries while using straw buyers and forged documents at closings.
Steward’s crew left in its wake empty houses that blighted neighborhoods by becoming havens for criminals and dragging down nearby property values.
And the frauds sharply curtailed bank lending in those historically disadvantaged Black neighborhoods, prosecutors wrote in one court document.
“Obviously, the losses experienced by the lenders decreased the level of funding available to potential homebuyers of African American descent. Moreover, the individual victims of the mortgage fraud scheme, most if not all of whom were also of African American descent, suffered harassment and ruined credit ratings as a result of the mortgage fraud scheme,” prosecutors wrote.
By 2003, investigators were also focused on Walker, who acted as Steward’s attorney on at least 29 fraudulent real estate transactions in 2000 and 2001, according to the search warrant application prepared by county prosecutors and federal agents.
Two decades later, thousands of pages of records in Steward’s case files had been inexplicably sealed. Records in another file related to the search of Walker’s offices also were sealed.
Unsealing the records
Injustice Watch filed motions before two Cook County judges to unseal both files, although some records in the criminal case remain missing.
A review of the released files — as well as civil lawsuits filed by victims of Steward’s schemes, closing statements from mortgage deals, and testimony from straw buyers — reveals new details on Walker’s alleged involvement in the fraud ring.
Photo by David Jackson
Decades-old court records involving the fraud allegations against a former client of Carl Walker.
At the time, Walker adamantly denied any wrongdoing in the fraud case, saying in a sworn statement after the 2003 search of his office he had no knowledge of or involvement in handling transactions for Steward that later proved fraudulent.
Prosecutors alleged Walker exposed his complicity in the fraud schemes when he warned two people to remain silent after they complained to him their credit had been ruined, according to court records.
One whistleblower, whose identity was used in a fraud scheme, told authorities she telephoned Walker when she was pursued by creditors, according to the application on which Biebel relied to approve the warrant to search Walker’s offices.
The woman, who asked not to be named in this report, told investigators Walker “told her that she was a ‘straw buyer’ and could be in trouble if she continued to complain.”
In a second case, Steward sold a distressed South Side building to Fritz Fox, then sold the same building to a second straw buyer without Fox’s knowledge, the unsealed records show.
When Fox confronted Walker about the theft of his identity, Walker warned Fox he could get in trouble for being a straw buyer, according to the account of prosecutors.
Walker’s statements in both cases were incriminating, prosecutors wrote in court documents, because they showed he knew the transactions were illegal. By admonishing both the whistleblower and Fox to remain silent, he demonstrated his desire to shield the scheme from detection, prosecutors wrote.
“The affidavit contains direct evidence to support the conclusion that Carl Walker knowingly participated in a criminal enterprise and profited from it,” prosecutors wrote. “Carl Walker took steps to conceal the discovery of the existence of the scheme by intimidating a witness into remaining silent.”
Fox told Injustice Watch he felt Walker was as much to blame as Steward.
“Ken Steward and Carl Walker are the same. I wish I had never met them,” Fox said. “It’s been a wretched experience, and I just don’t want to relive it any more.”
The unsealed files connect with civil lawsuits and property records to portray Walker’s alleged involvement with Steward’s fraudulent transactions.
In one example, Walker served as the attorney for a Steward company in a $60,000 purchase of a century-old brick two-flat in 2000. Walker also was listed as the vice president of the same Steward company when it sold that West Cullerton Street building to a straw buyer for $136,000 weeks later, according to court records.
Steward arranged for the straw buyer to get a $108,000 mortgage from CitiFinancial, then sell the home to another straw buyer in a transaction handled by Walker, court records indicate.
Citi’s $108,000 mortgage wasn’t repaid. Instead, the money was diverted to a company created by the Steward fraud ring, called Tristar Equity Fund, court records show.
According to the civil court statements of the title insurance company, Law Title Insurance Co. – Naperville, Walker knew CitiFinancial held a legitimate mortgage and should have been paid off, but “Walker caused” the diversion of that money to Tristar Equity Fund.
Steward was convicted of using bogus appraisals to inflate the market value of properties and giving straw buyers forged pay stubs and bank statements to make them seem credit-worthy.
Each of the straw buyers was paid about $1,000 by Steward, and Walker was paid $650 to $975 per closing as Steward’s attorney, court records show.
In other instances, Walker also represented alleged straw buyers and sellers, court records show.
Mike T. Edwards alleged in a handwritten court motion that Steward recruited him at church and “explained that the property would be rehabbed, flipped & sold.”
“At closing they provided Carl A. Walker as my attorney. I had no doubt that I was in good hands,” Edwards wrote. “Walker … acted as my legal representation.”
Law Title said in civil court pleadings Walker also was paid to serve as a title agent, meaning he reviewed title searches and surveys, authorized payoff checks, and ensured documents were in order.
“No one knew more about the various closings than Walker,” Law Title wrote in one civil court filing.
At the time, Walker denied being a title examiner in suspect deals and disputed he played these multifaceted roles in a signed April 2004 affidavit submitted to Biebel.
“I did not review any of the buyer’s documents prior to, during or subsequent to the closings of the properties [listed] in the complaint for the search warrant,” Walker wrote in his affidavit. “I had no discussions, directly or indirectly, with the appraisers regarding the value of properties. … I had no discussions, directly or indirectly, with the loan officers regarding the buyer’s credit worthiness to purchase the properties. … [And] as the attorney for the seller, I did not review the buyers’ loan documents.”
In defending their search of Walker’s office, prosecutors offered their description of Walker’s alleged role in the fraud scheme.
“Bribery, forgery, the use of straw buyers, property ‘flips,’ identity theft and the diversion of mortgage payoff funds were all common elements in a typical Ken Steward Cell mortgage fraud transaction,” prosecutors told the judge.
Walker’s role, they said, “certainly identified him as a possible suspect. Also, it cannot be denied that the documents sought in the search warrant were instrumentalities of a crime. Moreover, the complaint for search warrant contained information that was directly incriminating as to Mr. Walker.”
‘I don’t want to relive all of this’
Injustice Watch first discovered details of the fraud allegations and the 2003 search of Walker’s office while doing routine research in early September for an upcoming judicial election guide.
Separately on Sept. 28, Milan was questioned by Walker in oral arguments in the Muhammad case. Then came Milan’s motion to disqualify Walker on Oct. 25.
In a brief interview with Injustice Watch on Oct. 3, Walker insisted he took no part in the Steward mortgage fraud ring.
“I don’t want to keep discussing this, because I don’t want to relive all of this, because that is behind me,” Walker told Injustice Watch about the allegations. “And I did nothing wrong. There was no wrongdoing whatsoever. So I’m not going to go back and forth. I don’t want to relive it. That’s 20 years ago.”
Convinced that Walker played a role in the fraud scheme, two prosecutors supervised by Milan took the extraordinary step of driving to Biebel’s home on a Saturday in May 2003 to get approval for the search warrant of Walker’s downtown office.
Prosecutors John Mahoney and Fred Sheppard knew their request was fraught with legal complications and controversy, records show.
Cook County Judge John Mahoney
In approving the warrant, Biebel insisted prosecutors follow a checklist of precautions to preserve the “sanctity” of the lawyer’s privileged relationship to his clients, records show.
Federal agents were already conducting their own probes of Steward’s mortgage fraud ring, and the search of Walker’s office would be led by a team of FBI and federal agents from Ohio, Minnesota and Indiana.
The files would be taken directly to Biebel’s chambers to ensure the seized materials didn’t contain irrelevant or protected work products.
Two days later, at 6:30 on a Monday morning, agents swarmed Walker’s office, unplugged computers, pulled open cabinet drawers, and took photographs of the premises. When Walker arrived three hours later, he was met by agents in FBI windbreakers.
The case reverberated through the Cook County Bar Association, the nation’s oldest society of African American lawyers and judges, where Walker has served as a director and treasurer. Scores of Black lawyers lined the courtroom gallery when Hooks, Walker’s attorney, demanded the return of his law files before Biebel.
“The Cook County Bar Association is now combating what it perceives to be racism by the Office of the Cook County State’s Attorney in causing the issuance of a search warrant to search a Black lawyer’s office,” Hooks said in a January 2004 press release as the court drama began.
“This despicable action by the State’s Attorney violates the sacred confidential relationship between an attorney and his client, and most inappropriately assumes that the Black lawyer is engaged in a criminal conspiracy with his client by mere representation of his client.”
Walker’s attorneys portrayed a brave solo practitioner who stood up for the entire legal profession when he challenged the search and called out racism in the State’s Attorney’s Office, according to court records and news coverage from the time by the Chicago Defender.
“You don’t go into our lawyers’ offices with search warrants,” Hooks said during the controversy. “This is not Alabama.”
“He wouldn’t have done that to a large politically connected law firm,” Hooks said of Devine at a news conference.
Cook County Judge William H. Hooks
In a statement to the Chicago Tribune at the time, Devine’s spokesman said Hooks’ allegations were “ridiculous.”
In a June 2004 hearing before Biebel, then-prosecutor Mahoney explained why his office executed the unannounced search instead of issuing a subpoena to Walker.
“Given the level of Mr. Walker’s involvement on 29 different occasions, participating in real estate transactions where various lenders were burned to the tune of $9.6 million, we were not comfortable requesting Mr. Walker simply give us incriminating documents,” Mahoney said.
“I will say that the level of activity that Mr. Walker conducted in harmony with his clients, who are now sitting in Cook County Jail, is definitely relevant to our choice to use a search warrant as opposed to a grand jury subpoena,” he said. “The facts as outlined in the affidavit for the search warrant gave us more than ample cause to not trust Mr. Walker’s motive, and this court agreed.”
In court papers, prosecutors alleged Walker “was not charged because of statute of limitations constraints,” although they did not specify which part of the criminal code he may have violated.
As Hooks attacked the search warrant, courtroom conflicts became vehement and personal. Hooks demanded the prosecutors be disbarred for misconduct and asked Biebel to empanel a special grand jury to investigate their behavior, according to transcripts of the proceedings.
Gesturing toward prosecutor Mahoney at one point, Hooks told the court: “This gentleman deserves a special grand jury, his supervisors deserve a special grand jury.”
Hooks referenced Walker’s supporters in the courtroom and said: “The next lawyer or the next citizen that doesn’t have 150 African American lawyers show up here — because this is a rare occasion, this is a rare occasion that the Cook County Bar decided to come forward — he [Mahoney] won’t be able to smirk and get away with it.”
Mahoney pushed back.
“It’s beneath the dignity of the court for everybody here to have to sit here and listen to the bombast and the rhetoric that continually spews from Mr. Hooks’ mouth,” Mahoney told Biebel. “It’s been going on now for a year and a half, we haven’t said anything. Mr. Hooks thinks that he can bully the court, bully us, threaten us, threaten everybody with [Attorney Registration and Disciplinary Commission] complaints, which he’s filed.”
“The only thing that they had going for them is bluster and bombast and accusations and crap and that’s what their entire argument is based on and so be it, judge,” Mahoney said.
Photo courtesy of Robert Milan
Special Prosecutor Robert Milan
The contentious rhetoric reached such a level, records show, that Milan at one point was called to Biebel’s chambers to ratchet down the tension. Biebel admonished all the attorneys — including Milan — to show more respect and decorum in the courtroom, according to a subsequent affidavit by Milan.
After months of hearings, no sanctions were imposed on the prosecutors. Mahoney is currently a circuit court judge, and Sheppard is an assistant U.S. attorney in California.
But Biebel did back off his initial support of the search. Investigators in court described Walker as a “possible subject” and “person of interest” in their investigation, but those incriminating descriptions were not included in the initial search warrant application.
“This is no semantic game. The terms ‘suspect’ and ‘target’ possess meaning in the context of a law office search,” Biebel wrote in a 51-page ruling. “The state’s failure to use these labels makes the search of a law office less reasonable.”
Biebel also cited technical flaws in the execution of the search itself. The investigators did not immediately return to Walker photographs they took of his law office or initially disclose they even took them, for example.
“Upon further reflection, the court believes the government’s unsupervised control of both [Walker’s] computers and a copy of [Walker’s] hard drive does not adequately protect the privacy interests of [his] clients,” Biebel wrote.
With the search warrant vacated, Cook County prosecutors backed off from charging Walker because any subsequent judge would challenge the evidence based on Biebel’s decision to vacate the search warrant, according to one former prosecutor who took part in the discussions.
Within the State’s Attorney’s Office, this decision was approved by then-State’s Attorney Devine, according to that person.
Devine, Hooks, Mahoney, Sheppard, Milan, and Biebel did not respond to requests for comment.
Lawsuits raise questions about disclosures
Walker spent his first five years on the bench, from 2006 until 2011, responding as a defendant or as a subpoenaed witness to civil court allegations of fraud and breach of fiduciary duty flowing from his handling of mortgages that proved fraudulent, records show.
In one civil case, Law Title alleged Walker approved forged documents and accepted straw purchasers at closings where mortgage proceeds were diverted to Steward’s phony companies.
“Steward or Walker orchestrated every move involving the closings and made all important decisions,” Law Title alleged in that civil lawsuit.
Walker denied the allegations and resolved Law Title’s claims under confidential terms in 2011. Asked about the terms of his settlement, Walker told Injustice Watch: “I did not remember.”
Asked by Injustice Watch if he paid monetary damages, Walker said: “I did not pay a single dime. No, I did not.”
Walker gave a deposition in the civil case against him, but declined Injustice Watch permission to obtain a transcript.
In two other civil lawsuits pending while he was a judge, Walker was subpoenaed as a witness, but he successfully fought those subpoenas.
As a judge, Walker is required to file annual ethics disclosures listing any pending cases in which he is a party or has a financial stake.
Starting in 2006, he listed the Law Title case in which he was named a defendant, but not the two cases in which he was subpoenaed as a witness.
Four ethics experts who reviewed Walker’s disclosure statements at Injustice Watch’s request had differing views on Walker’s legal responsibility to disclose those cases.
“I probably would have advised Judge Walker to include these cases on his disclosure form,” said Steven Lubet, Northwestern University Law School professor emeritus and co-author of the book “Judicial Conduct and Ethics.”
Lubet noted a discrepancy between Rule 2.11 of the Illinois Judicial Code of Conduct, which requires a judge to be disqualified from any proceeding where he or she “is likely to be a material witness in the proceeding,” and ethics disclosure laws requiring judges to report only cases to which they are a party or have a financial stake.
DePaul College of Law professor emeritus Jeffrey Shaman said Walker was squarely within the requirements of Illinois law when he omitted the cases in which he was a potential witness.
“If he was merely a subpoena witness and not a plaintiff or defendant, I do not see how he had a personal financial interest in the cases,” Shaman said. “I don’t know of any law or regulation that would require” him to disclose.
Two other experts agreed Walker should have submitted more complete disclosures of cases where he was a participant.
In his written statement to Injustice Watch, Walker said his disclosures followed the law.
“As the name suggests, the ‘Annual Statement of Economic Interest’ focuses on judges’ economic interests,” he wrote. “It asks judges to identify cases in which they are a party but does not ask them to identify cases in which they are witnesses.”
In the past 50 years, only four Illinois judges have been sanctioned for filing false or incomplete ethics statements, Injustice Watch found in a review of records from the Illinois Judicial Inquiry Board. Those four judges were all briefly suspended without pay.
Competing bias claims in torture appeal
Walker was named to a three-judge panel hearing oral arguments on Muhammad’s appeal in September, a move Milan said took him by surprise.
“Had such a notice been provided, the People would have certainly filed a motion seeking Justice Walker’s recusal prior to the oral arguments,” Milan wrote.
Milan said during the oral argument Walker peppered his co-counsel with questions about Milan’s role as a supervisor in Devine’s office at the time of Muhammad’s interrogation and conviction and how that might conflict with Milan’s role as special prosecutor now.
Milan noted that in contesting the search of his law office two decades ago, Walker accused assistant state’s attorneys and their supervisors of fraud, obstruction of justice, and misconduct, and unsuccessfully sought a special grand jury to prosecute them.
Those “vociferous accusations of gross misconduct … are evidence of his deep-seated bias,” Milan wrote.
Muhammad’s appellate attorney, H. Candace Gorman, responded with a court motion calling Milan’s effort to disqualify Walker “specious.”
“Mr. Muhammad can only speculate that Mr. Milan raised the issue of disqualification after determining from the oral argument that the appeal was not looking favorable for him,” Gorman wrote.
Image courtesy of Muhammad’s attorney, H. Candace Gorman
Abdul Malik Muhammad
Neither Milan nor Gorman would comment for this report.
At play in the Muhammad case is Walker’s reputation as a justice whose interpretation of the law frequently favors criminal defendants.
Injustice Watch identified five appellate court rulings in which Walker took positions that favored criminal defendants but later were overturned by the Illinois Supreme Court on substantive grounds. In a sixth case, Walker wrote a dissenting opinion that favored the defendant — and saw his minority view upheld 7-to-0 by the state Supreme Court.
But a judge’s reversal record is only a tiny slice of all the cases they’ve decided.
“My decisions have been dictated solely by the law and evidence presented in the case,” Walker said in his written response to Injustice Watch. “During my nearly 18 years as a judge, those decisions have sometimes favored the State and sometimes the defendants.
“The cases that you mentioned represent a small portion of the criminal cases that I have handled over the years and are neither representative of my rulings nor suggestive of bias in favor of or against any party.”
In his Oct. 3 interview, Walker said his own experiences with law enforcement in the 2003 raid had no influence on his court decisions.
“Absolutely not. Not at all,” Walker told Injustice Watch. “Not in any way, shape or form. No. I have family members in law enforcement. Why would I be against law enforcement?
“We need law enforcement just to serve and protect us,” he said. “No, I have no problem with law enforcement.”
