Sterling Developer Rocky McGowan Loses Key Property to Foreclosure Amid Fraud Allegations
The developer who championed a widely publicized effort to restore two historic Sterling landmarks is now embroiled in a cascade of legal troubles, including a foreclosure that has stripped him of a downtown property and multiple lawsuits alleging he siphoned millions from a manufacturing company he co-owns.
A Whiteside County Circuit Court judge on May 13 granted Central Bank Illinois early possession of the former Amcore Bank building at 302 First Ave., after determining that mortgage payments had defaulted and the bank had a reasonable chance of prevailing at a final hearing. The property, once seen as a centerpiece of downtown revival, now sits under bank control until a sheriff’s sale determines its next owner.
The foreclosure was filed April 7 against Rocky McGowan, his wife Darcie, and his companies — M5 Property Holdings, M5 Conveying Consultants, and M5 Industries. McGowan had announced in 2024 that he purchased two historic buildings on Sterling’s First Avenue for $6 million, promising a fall 2025 opening. He boasted that his firm could handle large-scale redevelopment without outside contractors.
But a Central Bank Illinois representative told the court that construction had halted on the site, leaving the property unsecured. The bank’s mortgage explicitly allowed it to take possession upon default, and that clause was upheld.
The foreclosure is just one of several legal actions piling up since February. In a separate civil suit filed April 13, Rotary Airlock LLC, a Rock Falls manufacturing company where McGowan holds a two-sixths ownership stake, accuses him of orchestrating a multiyear scheme to enrich himself at the company’s expense.
According to the complaint, McGowan used his control over Rotary Airlock’s finances to charge $520,791 in personal expenses on company credit cards between January 2024 and February 2026 — including retail purchases, entertainment, and other personal items. He partially reimbursed $245,203, leaving $275,588 unrecovered. The other owners say they were never notified or authorized any of those charges.
Further, the lawsuit alleges McGowan withdrew $946,805 in company cash for personal use over the same period, covering groceries, food delivery, hotel stays, medical bills, and casino cash advances. When questioned, he claimed the withdrawals funded “internally constructed assets” for the company — an explanation the other owners dismissed as false, noting that personal groceries and casino advances cannot constitute business assets for an industrial equipment manufacturer.
The complaint also claims McGowan entered Rotary Airlock into four undisclosed financing deals totaling $3,079,263, and then transferred $2,953,249 of company funds across 11 transactions to his M5 entities between November 2025 and January 2026. These transfers, the suit states, drained the company’s cash, increased its debt, and damaged its working capital.
Rotary Airlock and its co-owners — Benjamin Hilty, Timothy Hilty, Matthew Hilty, and Kyle Herren — are seeking at least $4,175,643 in compensatory damages, plus punitive damages, and a constructive trust over all diverted funds. They allege conversion, fraud, breach of fiduciary duty, and aiding and abetting.
Meanwhile, Sterling Federal Bank filed a separate foreclosure complaint on May 14 against M5 entities and the Rotary Airlock co-owners over a $165,000 loan on property at 407 E. Seventh St. in Rock Falls. The bank says M5 Conveying Consultants failed to make payments on a promissory note signed April 5, 2023, and that as of April 13 it was owed $165,207.25, with daily interest accruing.
The unfolding legal saga has cast a shadow over McGowan’s ambitious redevelopment plans and raised questions about oversight in small-town real estate and manufacturing partnerships. Case management conferences are scheduled for July 13 and July 16 in Whiteside County Circuit Court to address the civil and foreclosure complaints.
The outcome could have lasting implications for Sterling’s downtown revitalization efforts, as the former Amcore Bank building and the two historic properties remain in limbo. Community leaders had hoped McGowan’s projects would spark broader economic activity, but the foreclosure and fraud allegations now threaten to stall momentum.