Updated 08/04/14 – 2:27 p.m.

CHICAGO (CBS) — In a rare and surprising move, federal prosecutors have dropped 17 felony bank fraud charges against state Rep. La Shawn Ford (D-Chicago), and allowed him to plead guilty instead to a single misdemeanor tax charge.

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In November 2012, Ford was indicted on 17 felony counts of bank fraud and submitting false information to the now-defunct ShoreBank. The feds alleged he got a $500,000 extension on a line of credit for his real estate business in 2006, then used the money to pay off personal and campaign expenses – including car loans, credit card bills, mortgage payments, and gambling.

However, on Monday, Ford, 42, pleaded guilty to only a single misdemeanor count of filing a false income tax return for 2007, and prosecutors dropped all other charges.

The misdemeanor count carries a maximum penalty of one year in jail and a $100,000 fine, although the plea anticipates a recommended sentence of zero to six months in jail, and as a first time offender, probation is more likely. Added together, the 17 felony counts would have carried a penalty of up to 510 years in prison and a fine of up to $17 million. A felony conviction also would have meant Ford would have lost his seat in the Illinois House’s 8th District.

According to a copy of Ford’s plea agreement, he earned income by investing in real estate and rehabbing property. In March 2007, he sold a single-family home at 5700 W. Erie St. for $275,000. According to the plea, when he filed his 2007 federal tax returns the next year, he claimed $74,226 in rehabbing costs for the Erie Street home, when in fact the costs were only $51,160, resulting in a $3,782 tax benefit for Ford.

“I’m sorry that I underestimated my taxes,” Ford said after entering his guilty plea.

The plea deal makes no mention of ShoreBank or the earlier bank fraud charges.

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Durkin praised federal prosecutors for agreeing to reexamine the evidence in the case and drop the felony charges.

“A lot of prosecutors’ offices would have been belligerent enough to force the case to trial and run the risk of losing,” Durkin said.

However, he declined on an invitation to say prosecutors overcharged the case at the start.

“I’m going to take my wins where I find them and I’m not going to gloat, okay? I’m telling you this is a good resolution of a very difficult case. If you want to describe it that way, I wouldn’t contest it, but I’m not going to make a big deal out of that right now.”

All along, Ford said the bank fraud charges were “ridiculous.” He dismissed one attorney who suggested he work out a plea bargain on those charges, and hired Thomas Durkin, who was prepared to go to trial on the more serious charges.

CBS 2 Legal Analyst Irv Miller said it’s rare for federal prosecutors to drop felony charges of this magnitude in favor of a simple misdemeanor. He said Ford’s defense team clearly must have provided federal prosecutors with evidence that either absolved him of the bank fraud charges, or made it very difficult to prove him guilty.

“They did blink,” Miller said. “They blinked intelligently. They were presented with something, obviously, that caused them to rethink their case. They don’t like to lose. They like to win their cases. They like to do justice, and they did that in this case by realizing, perhaps, they couldn’t prove the felony, or they knew something about the felony that wasn’t going anywhere, and they did the right thing. They knocked it down to a misdemeanor.”

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Sentencing on the tax charge was scheduled for Nov. 7.