Atul Bisaria, who formerly owned The Cornhusker hotel, among other lodging properties, has been indicted by a federal grand jury in Illinois on 10 counts of fraud and making false statements to lenders.  

Bisaria, 53, of Boca Raton, Fla., and Steve Lewis, 60, of Highland Beach, Fla., are accused of using about $9 million in bank loans to refinance and remodel hotels that Bisaria's Shubh Hotels owned in Cincinnati and Boca Raton, Fla., for purposes other than those the bank intended: to prop up Bisaria's failing lodging properties elsewhere. Lewis owns Contract Purchasing and Design, an interior design and remodeling company in Boca Raton.  

It's not clear from the indictments whether any of the money was used at or by The Cornhusker. Bisaria also owned hotels in Detroit and Pittsburgh, both of which he lost in the financial crisis after 2008. He was overdue with plans for renovations at The Cornhusker when Marriot International withdrew the brand's "flag" from it early this year. 

Acquired by Bisaria's Shubh Hotels in 2004, The Cornhusker was repossessed by auction in February to satisfy a $3.5 million debt. Since then, it has been taken over by a new joint venture of Marcus Hotels and Resorts and an affiliate of LEM Capital, a Philadelphia real estate investment firm that repossessed the hotel.

The indictment says Bisaria and Lewis created false invoices in the name of Lewis's remodeling firm and used false documentation of supplies to get money from the lenders that ended up in accounts they controlled at other banks. The indictment says they diverted more than $9 million that way. No particular loss to the banks is identified in the indictment.

Bisaria in 2007 borrowed scores of millions of dollars from Mutual Bank of Harvey, Ill., and from Broadway Bank, of Chicago. Burdened with bad loans, both banks later failed and were closed by Illinois and federal regulators.    Mutual Bank failed in 2009, and was taken over by United Central Bank of Garland, Texas. Broadway Bank failed in 2010, on the same day as six other Illinois banks, and was taken over by MB Financial Bank.   

Bisaria and Lewis are charged with five counts of wire fraud, each of which could be penalized by 30 years in prison and a $1 million fine -- the penalties for fraud against a financial institution are higher than those in other cases -- and five counts of making false statements to a bank, with the same penalties for each count, said Randall Samborn, an assistant U.S. attorney and public information officer for the U.S. attorney in the Northern District of Illinois.

In addition to the felony criminal penalties, Bisaria and Lewis are liable to forfeit property and cash derived from the alleged frauds, worth about $9 million.

Bisaria and Lewis could not be reached for comment. 

A Florida law firm, Weiss Serota, which represents United Central Bank, has been developing the case that Bisaria used the money from his alleged frauds to support his personal lifestyle, which includes a mansion in Boca Raton, and to prop up other failing hotels. 

Michael Popok, a partner in the firm, said Bisaria passed money back and forth between hotels, including The Cornhusker, as needed.  

Asked about Bisaria's using hotel loan funds to support his lifestyle, Popok said:  "Let's put it this way, it didn't go into the hotels, so where did it go?"

Reach Richard Piersol at 402-473-7241 or