My guess is that OP was caught street racing. They tick a lot of boxes for someone who would street race. Many areas have begun cracking down on it, to the point that it can outright get your car seized (not just impounded for pickup later. Completely seized), and your license permanently revoked. Not sure about Chicago specifically, but many states have started implementing harsher and harsher penalties for it.

If this is the case, the cop is basically saying “rat on your street racing buddies so we can bust all of them, or else we’re throwing the book at you.”

OP needs to delete this post and talk to an attorney.