CHICAGO (STMW) – A onetime Tony Rezko business partner, who once was a Chicago cop and chief executive of a company that won a $50 million security contract in Iraq, has pleaded guilty to federal charges in Chicago after he cooperated with authorities.

Daniel T. Frawley pleaded guilty on Feb. 14 to bank fraud and structuring transactions — a plea that came about two weeks after his charges were made public.

The Chicago Sun-Times has learned that Frawley won a deal that will mean a significant cut in his potential sentence because he provided information to authorities regarding Rezko, who was convicted in 2008 and is awaiting sentencing. The cooperation began quietly years ago, the Sun-Times has learned.

Frawley once ran a company called Companion Security with Rezko, a onetime adviser to former Gov. Rod Blagojevich.

The Sun-Times has previously reported that Iraq’s Ministry of Electricity gave a $50 million contract to Companion Security in 2005 to train Iraqi security guards.

That deal soon fizzled after a regime change, leading Companion to lobby officials — unsuccessfully — from Washington to Baghdad in hopes of reviving the deal.

Frawley’s charges in federal court, however, deal with another company, called Frawley Trading Company, which had an office in suburban Hinsdale.

He admitted to obtaining a fraudulent $4.5 million loan from First Bank in Missouri and making false representations to the bank in 1999 and 2000.

Frawley also admits to structuring a series of withdrawals from another bank, taking out a total of $87,000 at less than $10,000 each time. He said he did it to avoid disclosure requirements, which kick in at $10,000.

The conduct charged is beyond the statute of limitations and his plea deal indicates Frawley agreed to waive the statute as part of a deal. Frawley could have faced more than five years but prosecutors will recommend 18 months, according to his deal. Frawley’s lawyers can ask for less time as part of the agreement.

Frawley’s attorney, Thomas M. Durkin, would not comment on the agreement.

Frawley must make some $4 million in restitution, according to his agreement. He’s scheduled to be sentenced June 1.

(Source: Sun-Times Media Wire © Chicago Sun-Times 2010. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)