Metra chief was supporting 3 households

December 7, 2010 (CHICAGO)

His widow is facing more than $1 million of debt. Some of that includes two households that were not Pagano's primary residence.

The disclosures came in federal bankruptcy court.

Pagano committed suicide in May as he was being investigated for taking hundreds of thousands of dollars in unapproved pay from Metra.

The questions now surround a bankruptcy court comment made by the attorney for Phil Pagano's widow. James Mullally said that the late Metra boss had, in addition to his Crystal Lake home, two other "households," one in Palatine, one in downtown Chicago.

Mullally hasn't been available to explain what's meant by the term "household." Is it a property interest or more involved than that?

At this point, there is no formal government investigation. So, the answers will likely come through bankruptcy court.

Pagano took $475,000 in unapproved vacation pay and twice forged the Metra Board chairman's name to cover up his theft. The morning he was to be fired for that, Pagano stood in front of a Metra train.

Seven months later, his wife is now in bankruptcy court, smothered in more than $1 million in debt.

Pagano had refinanced the couple's Crystal Lake home. It's valued at $340,000, but there are two mortgages on the home, and the debt is more than twice its market value.

Pagano also had considerable credit card debt, $255,000 worth, including $50,000 on a United credit card, and other debts to Diner's Club, Nordstrom's and Target.

Before he took his life, Pagano acknowledged his vacation-pay scam to Metra Special Counsel Jim Sotos, but in doing so, Pagano said the money was for nothing illegal nor immoral.

That raised the obvious question: Where did the money go?

Mrs. Pagano's attorney said in bankruptcy court that "Pagano had not one, but two additional households, one in Palatine and one in downtown Chicago." But attorney Mullaly has not elaborated on what that means.

The bankruptcy trustee tells ABC7 that he intends to find out whether Pagano had any interest in other properties, or gave money to others, because there are creditors standing in line and they'll want to know.

Metra has already paid Pagano's widow his life insurance proceeds of $500,000. The trustee argues that that money should be subject to creditor claims.

The bankruptcy mess raises continued questions about what Pagano was doing. In his suicide note, he wrote, "With the exception of this one mistake (meaning the vacation pay forgery) I have always done things the honest and right way. I hope you believe me."

Mrs. Pagano is receiving payments from her husband's pension which is capped -- for now -- at $80,000 a year.

Metra is technically not among the creditors in the Pagano bankruptcy, but it's seeking to recover $127,000 it says the former chief owes the agency.

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