Priest sentenced in church embezzlement case in Wheaton, Illinois

FROM ABCLOCAL.COM  -

A Catholic priest has been sentenced to 60 days probation after embezzling nearly $300,000 from his northwest suburban church.

Father John Regan pleaded guilty in June.
He apparently stole money from the St. Walter Catholic Parish in Roselle, where he was pastor for two years.
Court documents show he would funnel cash into a secret bank account.
Investigators say Regan stole the money to fuel a gambling addiction.
The Joliet diocese says it has reimbursed the parish for the full loss.

The Rev. John Regan, 47, from St. Walter Church in Roselle, was also ordered to pay $295,000 in restitution and will serve 150 days on work release as well as perform 500 hours of community service work.

Some parishioners cried when Regan was led away in handcuffs.
The sentence, handed down by Judge John Kinsella, was a just punishment, according to several parishioners who forgave their former leader.
That includes some who even testified for the state
"I think it was fair. I think our parish needs to move on and I think it was difficult for the judge because the other extreme was a minimum of four years in the penitentiary," said parishioner Bryan Mraz.

Mraz had previously testified that the ordeal had "shaken my faith in priests" and said that a gambling addiction is "is a lame excuse to try to get a lighter sentence."



Mraz testified that Regan used to say in his sermons that he gave half of his $25,000 salary to charity and encouraged parishioners to do the same.



Regan pleaded guilty to the financial crimes in June. He faced up to 15 years in prison.

Pontiac, Illinois library to review hiring policies after theft charges

The Pontiac Library Board likely will review its hiring policies after a recent investigation into embezzlement allegations against a former director showed he had a previous conviction. Eric Colclasure, 42, of Pontiac has been charged with stealing more than $10,000 from the city library. He remains jailed in lieu of posting $10,000.Prosecutors allege Colclasure misdirected rent checks paid by Heartland Community College to the library between April and June. The Normal-based college rents a portion of the library building, 211 E. Madison St., for its satellite campus.The charges against Colclasure allege that he deposited rent checks into an Odell Public Library account. Colclasure also served as Odell's library director independently of his job in Pontiac. City attorney Alan Schrock said Pontiac and Odell libraries are separate entities and do not have any agreements in place that would share funds or personnel.Assistant State's Attorney Scott Terry said police are conducting an investigation into Colclasure's activities at the Odell library, but he has not received any final reports. Schrock said he advised the library board to improve its hiring policies more than a year ago. The library is operated by a board separate from the Pontiac City Council, but it is supported through a tax levied by the city. Colclasure started working at the library part time but was hired last year as director. A background check that would have detected his 2003 felony conviction from Cook County was not completed when Colclasure was hired. Schrock said the board only learned of Colclasure's previous felony conviction Tuesday when Colclasure appeared before a Livingston County judge for a bond hearing. "I advised them long before yesterday's development that we need to review the hiring practices," Schrock said. Schrock said the position of library director was not responsible for handling any money, but authorities say Colclasure may have intercepted checks in the mail. "We have a treasurer who is responsible for that (handling money)," Schrock said. "Now, the financial controls we have in place helped us detect what was happening quickly." The misdirected money was returned so the library and the city did not suffer a financial loss.

Accused arsonist fit for trial in Ottawa, Illinois

Following a review of a psychological evaluation, Circuit Judge H. Chris Ryan Jr. Friday found an Ottawa woman charged with arson and theft fit to stand trial next month.
Terri L. James, who remains in La Salle County Jail under $200,000 bond, is now scheduled to face a jury Monday, July 12. She pleaded not guilty to the charges.
According to authorities, the alleged arson fires were connected to the 42-year-old woman's unauthorized use of a credit card from First Congregational United Church of Christ in Ottawa to charge "in excess of $100,000." County prosecutors have reported James paid "said credit card statements with funds" from the church.
The complaint also accuses James of altering church records to conceal the alleged embezzlement. She has been church administrative assistant for several years handling the church's financial affairs.
James is suspected of starting a fire that nearly destroyed an Ottawa South Side home and attempting to set fire to another structure as a diversion on the city's West Side on the morning of March 17. She was arrested and charged with arson and attempted arson after alert neighbors told police details about a similar-looking van seen at both locations before the fires were discovered.
The wife of former State's Attorney Michael James and mother of three is facing an aggregated prison term of up to 45 years.
Represented by Public Defender Tim Cappellini, James was examined by Dr. Robert Chapman, a forensic psychiatrist from Bloomington, to evaluate her mental status.

Psychiatrist to examine accused Illinois arsonist

An Ottawa woman, charged with setting fire to two houses in March, will be examined by a Central Illinois psychiatrist to evaluate her mental status at the time of the incidents.

La Salle County Circuit Court Judge H. Chris Ryan Jr. granted a motion by Public Defender Tim Cappellini to have Dr. Robert E. Chapman, a forensic psychiatrist from Bloomington, schedule an examination of Terri L. James, 42, for possible evidential use in upcoming court proceedings.
According to official records, the alleged arson fires were related to James' unauthorized use of a credit card from the First Congregational United Church of Christ in Ottawa to charge "in excess of $100,000" and later paid "said credit card statements with funds" from the church.
The criminal complaint also accuses James of altering church financial records to conceal the alleged embezzlement. She has been church administrative assistant for several years — editing the weekly bulletin and handling the church's financial affairs.
James is suspected of starting a fire that seriously damaged a South Side home and attempting to set fire to another structure as a diversion on the city's West Side March 17. She was arrested and charged with arson and attempted arson after alert neighbors told police about a similar-looking van at both locations shortly before the fires were discovered.
The mother of three and the wife of former State's Attorney Michael James is now facing an aggregated prison term of up to 45 years.
Owners of the damaged home, Carol Kozlowski and Vicki Smith, were fellow parishioners and officers at the church with James. Smith is the chairwoman of the church's board of trustees while Kozlowski is the organization's moderator who conducts various church board meetings.
James has pleaded not guilty to all charges. She remains in county jail under $200,000 bond.

Aurora, Ilinois Pastor charged with swindling more than $470K

The pastor of a church in Aurora has been charged with three felony counts of theft by deception for allegedly bilking three men, including one member of his church, out of more than $470,000. The pastor, 49-year-old Howard Richmond, of the 2900 block of Brossman Avenue in Naperville, was taken into custody about 6 a.m. Wednesday without incident after Aurora Police executed a search warrant at his home, according to a release from Aurora police.
Richmond heads Life Ministries, a storefront church located at 4054 Fox Valley Center Drive in Aurora.
The criminal charges are the culmination of an ongoing Aurora Police investigation that began more than 13 months ago when a 60-year-old Skokie doctor who is a member of the congregation at Life Ministries, accused Richmond of swindling around $400,000 from him between December of 2008 and March of 2009. The doctor said that Richmond approached him following a service about investing money to help purchase the shopping center property where the church is currently located, and to help fund the building of a new church.
According to the victim, Richmond apparently had documents indicating he had several million dollars in the bank but due to a complicated business partnership, could not access the funds until a later date. Richmond also allegedly promised the doctor a healthy return on his investment, the release said. After initially giving Richmond $11,000 the doctor handed over money on several more occasions when Richmond gave him differing reasons as to why he couldn’t access the money from the previous business relationship.
Richmond allegedly used the same ruse to deceive a 43-year-old Aurora man with whom he had a previous business relationship out of $8,000 in May, 2009; and a 64-year-old Chicago dentist who had purchased some church related DVDs, out of more than $67,000 between July and August of 2009.
It is not clear what Richmond did with the money, police said.
In lauding the work of lead detective Scott Reid, Aurora Police Investigations Lieutenant Paul Nelson said, “This case was complicated, tedious and time consuming. Investigator Reid had to scour through thousands of pages of bank and other legal documents and piece together intricate details that eventually led to securing the charges. He did an outstanding job.”
Richmond’s bond call is pending in DuPage County Court

Illinois Non-profit focusing on environmental education files lawsuit over unnoticed theft

Chicago's non-profit Resource Center, which focuses on environmental education, has accused a former employee of embezzling hundreds of thousands of dollars over a period of at least six years-and it's suing the accountant it says failed to notice.In a lawsuit filed in the Circuit Court of Cook County, the Resource Center says Lee Tockman and his eponymous company didn't use accepted auditing practices that would have shed light on the embezzlement of some $600,000 by the employee.
Mr. Tockman didn't return phone calls.In its lawsuit, the Resource Center says the employee forged checks to herself and then hid the theft by altering statements from 2003 to 2009. The center's general manager eventually noticed the discrepancies.The lawsuit says the employee was fired and reported to law-enforcement officials. The U.S. attorney's office says no charges have been filed.
For its part, the 35-year-old Resource Center is emerging from a difficult financial year. With manufacturing down in the recession, its income from recyclables dropped.
But things have rebounded in the recycling business, says founder Ken Dunn: We're in good shape again.
The money lost each year in the alleged embezzlement was a fraction of its annual budget, which ranged from $1.4 million to $1.8 million during that time. It's not so much, in the big scheme of things, but we're disappointed we didn't get the best standards to catch such a problem, Mr. Dunn says.
His non-profit agency is known around town for collecting unused food from restaurants and grocery stores and delivering it to food pantries and shelters. It also runs City Farm, a sustainable vegetable garden straddling Cabrini-Green and the Gold Coast. Buyers of its produce include Frontera Grill and the Ritz-Carlton.

Accused arsonist in Ottawa, Illinois stole more than $100,000 from church

An Ottawa woman, accused of setting two fires last week, appeared in a La Salle County courtroom Friday morning in an attempt to have her $200,000 bond reduced. Instead, she found herself charged with theft of more than $100,000 from a local church. State's Attorney Brian Towne said in court the arson fires were an attempt to conceal or destroy evidence of the crime.
According to court records obtained by The Times, Terri L. James, 42, 1002 Ottawa Avenue, used a credit card without authorization from the First Congregational United Church of Christ, 910 Columbus St., to illegally charge "in excess of $100,000" and "paid said credit card with funds" from the church.
The criminal complaint also accuses James of altering church financial records to conceal the alleged embezzlement. She has been church administrative assistant for several years — editing the weekly bulletin and handling the church's financial affairs.
James is suspected of starting a fire that seriously damaged a South Side home and attempting to set fire to another structure on the city's West Side March 17. She was charged with arson and attempted arson after alert neighbors spotted a similar van at both locations shortly before the fires were discovered.
The Class X felony charge is non-probational and, by itself, could result in a six- to 30-year prison sentence. Combine that possible punishment with the potential consecutive arson sentences, the mother of three and the wife of former State's Attorney Michael James is now facing an aggregated prison term of up to 45 years.
Owners of the damaged home, Carol Kozlowski and Vicki Smith, were fellow parishioners and officers at the church with James. Smith is the chairwoman of the church's board of trustees while Kozlowski is the organization's moderator who conducts various church board meetings.
Smith and Kozlowski who own and operate Income Tax, Etc., in Ottawa, however, an unidentified church official told The Times the two women were not the church's accountants.
The motion for bond reduction was denied by Circuit Judge H. Chris Ryan, Jr. following Towne's presentation of the new charge. James pleaded not guilty to all charges.

Riverdale, Illinois school board president keeps post despite indictment

The president of the Riverdale, Ill., school board continues in that role despite a federal indictment that accuses him of multiple counts of fraud involving out-of-state school districts, two universities and his former employer, a local substance-abuse agency.

Tom Schroeder, of Port Byron, Ill., was "replaced" late last year as the director of the Rock Island County Council on Addictions, or RICCA, leaders from that agency said. Federal investigators in Kentucky identified former college dean Robert Felner as Schroeder's "co-conspirator" in a plot to embezzle $2.3 million by misdirecting grant and other money into bank accounts that could be accessed only by the two men.
Felner, the former dean at the University of Louisville and a longtime associate of Schroeder, pleaded guilty last month to nine counts of mail fraud, conspiracy to commit money laundering and conspiracy to impede and impair the IRS. His plea proceedings disclosed for the first time that RICCA was a
victim of the scam.
Schroeder pleaded not guilty to the charges outlined in an updated indictment filed earlier this month. He is scheduled to go to trial on Aug. 9 in Louisville, Ky. He could not be reached for comment, but his Louisville-based attorney confirmed the updated not-guilty plea.
Federal prosecutors say Schroeder and Felner created the National Center for Public Education and Prevention, or NCPEp, to divert money headed for the University of Louisville and the University of Rhode Island.
A university-based analysis center with a similar name performed contract work for public schools in Atlanta, Buffalo, N.Y., and Santa Monica, Calif., prosecutors allege. The money paid to the center was redirected to NCPEp and, ultimately, three bank accounts controlled by Schroeder and Felner.
One of the accounts was opened by Schroeder at a bank in Rock Island.
About $2.3 million was redirected to NCPEp, the indictments claim. Schroeder was listed as president of the company and was paid $3,000 a month as a "consultant." Prosecutors further claim that NCPEp was a bogus firm that did none of the school-district consultancy work it billed for.
The center continued to receive funding even after it was dissolved by the State of Illinois in 2006 for failing to file annual reports.
As part of Felner's plea deal, which includes a punishment of up to 63 months in prison, he admitted to embezzling $88,750 from RICCA, which is based in Moline.
Allegations against the two men first were disclosed in a 2008 federal indictment, which did not name RICCA as a victim. Schroeder remained at the head of RICCA until two months ago. As Felner headed toward a plea deal, members of the RICCA board became increasingly suspicious, said William Burrus, president of the RICCA board and principal at Moline High School.
"We like to believe people who are professing their innocence," he said Thursday. "You can only take that so far. We were just really disappointed, to say the least. Disappointed is a gross understatement."
Federal investigators at first assured board members that RICCA money was not involved in the case, Burrus said.
"Then - bam!" he said of Felner's plea. "We saw $89,000 had been swindled."
That is when things started to heat up at RICCA, Burrus said.
"The real scrutiny started in October," he said. "We are going through every reimbursement check, every travel expense. We're gathering everything we think is suspicious to cooperate with the federal prosecutor and the IRS."
For many months, Burrus said, any suspicions by the RICCA board were explained away by Schroeder. One repeated explanation for the condition of finances at the agency was "the perfect storm of distraction" with the delays RICCA experienced getting money it had coming from the state.
"The economic troubles for Illinois were used," he said. "At the time, the explanation was very satisfactory."
But the story began to fall apart, he said, following Felner's plea deal, a new indictment against Schroeder and the internal audits that were under way at RICCA - with the help of federal investigators.
"I think (the internal audit) really expanded their investigation," Burrus said of the new interest federal investigators have shown in RICCA. Burrus said he could not elaborate on what has been discovered, saying it could be used as evidence.
In addition to being sentenced to prison if convicted, Schroeder's $400,000 home on Eagle Point Court in Port Byron, Ill., could be seized by federal authorities.
Despite all his troubles, including allegations he defrauded school districts in at least three states, Schroeder continues to serve as president of the Riverdale School District. It serves Port Byron, Hillsdale, Cordova and Rapids City, Ill., and has 1,178 students.
Two of the three school board members who could be reached for comment on this story said they had nothing to say.
"It's not a school board matter," board member Todd Caves said of the charges against Schroeder. "I'm the junior member of the board, and you're not going to get a comment out of me."
Board member Sherry Creen had a similar response.
"I don't know anything about it," she said. "I haven't read one story. I don't want to be involved in that, so I'll have no comment."
Rick Kessler, also a board member, said Superintendent Ronald Jacobs assured the board that Schroeder had no financial dealings with the Riverdale School District or any other Quad-City school district, which was enough for them.
Jacobs was on vacation last week and was not available for comment.
Kessler knew of the indictment and heard Schroeder no longer worked for RICCA, but those issues are "irrelevant" to the school board, he said.
"When our members say they don't know what's going on, quite honestly, that's not a smoke screen," Kessler said. "We don't know."
And, he added, he doesn't want to know.
"This is a personal matter for him," he said of Schroeder. "I'm sure Tom will do the right thing."
Herb Schultz Jr., a Rock Island attorney, resigned his volunteer appointment on the RICCA board to represent Schroeder but is no longer involved in the case. Another former Quad-Citian, David Mejia, is practicing law in Louisville and is representing Schroeder.
Felner is not expected to testify at Schroeder's trial, Mejia said. Testifying was not a provision of Felner's plea.

Chicago, Illinois Regional schools superintendent Charles Flowers charged with stealing $376,000 in public funds from bankrupt agency

Charles Flowers, the beleaguered suburban regional school superintendent, brazenly used his taxpayer-funded credit cards for personal expenses and doled out cash advances to his sister and girlfriend, whom he placed on his payroll, State's Attorney Anita Alvarez said Thursday.

Prosecutors alleged Flowers stole $376,000 in public money from the bankrupt Suburban Cook County Regional Office of Education. He was held in custody Thursday after he surrendered to authorities on charges of theft and official misconduct.
"Within months of taking office, this man engaged in a bold and brazen scheme to defraud. It is a repulsive example of public corruption," Alvarez said. "In this case, we have an elected official who is supposed to be working for the taxpayers of Cook County, who apparently had the absurd notion that the taxpayers were working for him."
Flowers, 51, began his term as regional superintendent in July 2007. The office is responsible for overseeing teacher certifications, local school grants, background checks and fingerprinting for public school teachers and employees in suburban Cook County.
According to prosecutors, Flowers made numerous cash advances and credit card purchases that were of a "purely personal nature." They included using his office-issued credit card to buy nearly $800 in plane tickets for his children to travel to Mississippi, authorities said. Flowers also charged thousands of dollars at expensive restaurants and for car rentals and limousine services, authorities said.
"If that was done, he personally paid that money back," his lawyer, Tim Grace, said. "Dr. Flowers possibly made some bad decisions, but they are minor issues."
Flowers also allegedly used office funds to unlawfully make cash advances to employees that were never fully repaid. Those advances included $9,000 to his girlfriend, whom he hired as a school compliance liaison, and $6,000 to his sister, whom he hired as his executive administrative assistant, authorities said.
Prosecutors said Flowers used restricted grant funds to pay two office employees more than $21,000 in consulting fees. Those fees were in addition to their annual salaries of more than $80,000 each, officials said. The investigation alleged that the consultant services were never performed.
Flowers and the agency are fighting a civil suit brought in July by the state's attorney's office for failing to repay a $190,000 loan from the county. The suit says he defrauded the county because he knew the loan could never be repaid because of the agency's shattered finances.
Last year, a state audit found that the agency was $1 million in debt.
Flowers will face additional charges of misapplication of funds Friday, when he is expected to appear at the Cook County courthouse in Maywood, authorities said.