Ex-Northwestern Fraternity President Accused Of Stealing $460,000

CHICAGO — The former president of a Northwestern University fraternity association has been charged with stealing almost half a million dollars intended to be spent on management of the Sigma Chi house at the Evanston campus. Instead, the dues were spent on personal credit payments, online trading websites, payments to a yacht club and an ill-fated investment in fraudulent investment scheme involving Iraqi currency, prosecutors said.

Peter Schellenbach, 77, of Glencoe, was president of the Sigma Chi Home Association from 2006 to 2012. He was charged with felony theft of between $100,000 and $500,000 in Cook County Court, according to the Illinois Attorney General's Office.

"This individual used his position to steal money that should have been used to maintain housing on which students relied," Attorney General Kwame Raoul said, announcing the charges. "My office will work to ensure he is held accountable for his elaborate scheme to steal hundreds of thousands of dollars from students, alumni and board members who placed their trust in him."

The association's money was also used for personal expenses, including payments to the Chicago Yacht Club and online trading websites, according to Raul's office.

Schellenbach siphoned off about $460,000 of association's funds during his six years in charge of the nonprofit, according to prosecutors. He used more than $267,000 of that stolen money to invest in Iraqi dinars through a company called Sterling Currency Group, whose three top executives were convicted of a federal fraud conspiracy after a trial last October. All of Schellenbach's investment was lost.

The Northwestern chapter of Sigma Chi was suspended by its national headquarters in February, the Daily Northwestern reported. It was not immediately clear if the suspension was triggered by the investigation into Schellenbach.

Schellenbach was indicted on May 21, turned himself in and entered a plea of not guilty on June 7.

The investigation began in August 2017 when Evanston police received a complaint that the housing association had lost its status with the state. The investigation revealed financial improprieties dating back to Schellenbach's time in charge, authorities said.

The case was referred by prosecutors to a Cook County grand jury and the Special Prosecutions Bureau of the Illinois Attorney General's Office is handling the case on behalf of the state. The single felony charge is a class 1 felony that can be punished with up to 15 years in prison. Schellenbach has pleaded not guilty and is due back in court on July 15.