A federal judge has issued an emergency order to stop the Chicago suburb of Harvey from marketing an allegedly fraudulent bond offering.
U.S. District Judge Rebecca Pallmeyer issued a temporary restraining order Wednesday after an emergency hearing.
The Securities and Exchange Commission filed fraud charges against Harvey and its comptroller, Joseph T. Letke, claiming they have been diverting money from bond sales for improper and undisclosed uses.
The city allegedly claimed bond sales would fund construction of a Holiday Inn but instead diverted at least $1.7 million for other uses, and that Letke received almost $270,000 in undisclosed payments from the proceeds.
The SEC says the city planned to issue new bonds as early as this week.
Harvey spokesman Sean Howard says the city will "cooperate fully" with the order.
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