McHenry County Blog

A press release from the U.S. Attorney’s Office:

FORMER CHIEF INFORMATION OFFICER FOR CHICAGO-BASED INTERNATIONAL LAW FIRM ARRESTED FOR ALLEGEDLY ENGAGING IN AT LEAST $850,000 FRAUDULENT BILLING SCHEME

CHICAGO — The former chief information officer of an international law firm based in Chicago was arrested today on federal charges for allegedly defrauding the firm of at least $850,000 over the last year as a result of an allegedly fraudulent billing scheme with a vendor company.

The defendant, DAVID TRESCH, allegedly approved payments to a vendor for work that had not been performed, and in turn, pocketed hundreds of thousands of dollars from that vendor.

As background, the charges state that Tresch obtained nearly $1.3 million in additional proceeds since approximately 2005, a year after he joined the victim firm. Also today, FBI agents seized approximately $210,000 in bank accounts controlled by Tresch, as well as a camping trailer, a van, and a luxury automobile, and agents obtained authority to seize a mobile home.

Tresch, 51, of Itasca, was charged with one count of mail fraud in a criminal complaint that was filed yesterday and unsealed today following his arrest.

He was released on a $100,000 partially-secured bond after appearing before Magistrate Judge Sidney I. Schenkier in U.S. District Court. A status hearing was set for 11:30 a.m. on Sept. 5, 2012.

The arrest and charges were announced by Gary S. Shapiro, Acting United States Attorney for the Northern District of Illinois, and William C. Monroe, Acting Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation.

According to the complaint affidavit, Tresch was terminated on June 28, 2012, by the victim law firm, which was not identified by name.

The firm reported his alleged criminal activity to federal authorities and cooperated in the ensuing investigation.

The firm, which has offices worldwide, hired Tresch in May 2004 as a server operations manager in its information technology department.

He was promoted in 2008 to director of global operations, and was promoted again in July 2011, to chief information officer.

The charges allege that between May 2011 and May 2012, the law firm issued checks totaling approximately $980,000 to the unnamed vendor firm, based in Schaumburg, which purported to provide personnel and technology to assist businesses with office automation, website and database development, and general information technology.

During that same time, the vendor firm issued 11 checks totaling $854,250 to Tresch, who deposited the funds into one of two personal accounts he controlled, and then used funds from those accounts to purchase and make payments on the

• mobile home,
• camper, and
• vehicles,

the charges allege.

As part of his duties, Tresch was responsible for reviewing invoices from, and authorizing payment to, the vendor firm for the services of contract employees.

Between November 2004 and March 2011, the law firm paid the vendor firm nearly $7.8 million for work purportedly performed by the vendor firm contract employees.

During that time, records showed that more than 95 percent of the vendor firm’s income came from the victim law firm, the charges state.

Between February 2005 and March 2011, the vendor firm paid Tresch nearly $1.3 million, or more than 15 percent of the money it received from the law firm, according to the affidavit.

Tresch allegedly never disclosed to the law firm that he had any financial interest in the vendor firm.

According to a law firm official, in February 2011, Tresch was directed to stop using the vendor firm’s services.

However, the vendor firm continued to submit invoices to Tresch, who allegedly continued to approve payments, knowing that the vendor firm was no longer permitted to perform work for the law firm and, in fact, had not performed any work for the law firm after March 2011.

Between May 2011 and May 2012, the $854,250 that Tresch allegedly obtained represented nearly 90 percent of the $980,000 that the victim law firm had paid to the vendor, the charges allege.

Mail fraud carries a maximum penalty of 20 years in prison and a $250,000 fine, and restitution is mandatory. The Court may also impose a fine totaling twice the loss to the victim or twice the gain to the defendant, whichever is greater. If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory United States Sentencing Guidelines.

The government is being represented by Assistant U.S. Attorney Terra Reynolds.

The public is reminded that a complaint is not evidence of guilt. The defendant is presumed innocent and is entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.

A press release from State Senator Pam Althoff:

Althoff to host energy bill clinics in Spring Grove, McHenry

The Citizens Utility Board logo.

McHENRY – State Senator Pamela Althoff (R-McHenry) will be hosting two upcoming energy bill clinics with the Citizens Utility Board (CUB) in August.

The first will be held on Wednesday, August 22 at 7 pm in the Village of Spring Grove Council Chambers at 7401 Meyer Road.

The second will be held on Tuesday, August 28 at 7 pm in the Village of McHenry Council Chambers located at 333 South Green Street.

The forums are aimed at helping local residents learn how to save money on their energy bills, and will outline various energy options available to consumers.

Free refreshments and brochures will be provided.

The CUB is a nonprofit, nonpartisan organization that represents the interests of Illinois consumers. Numerous CUB staff members will be on hand at the forum to answer questions and assist individuals interested in reducing their energy bills.

Attendees are encouraged to bring a recent energy bill with them to help staff identify potential savings.

For more information about the seminar please contact Senator Althoff’s office at 815-455-6330.

With State Rep. Jack Franks about to get lots of publicity about keeping real estate tax bills down, it’s worth looking at the underlying problem.

This is the third or fourth article I have written on the subject.  It’s a complex topic, so worth repeating.

After the Tax Cap (PTELL to insiders) was passed, real estate inflation exceeded the increase in the Consumer Price Index.

I remember the year before the law took effect in 1993, Crystal Lake High School District 155 took the entire 17% hike in property value out of our pockets. The CPI increase, of course, was much lower.

After the the Property Tax Cap took effect, the County Clerk’s Office had to impose limits on the increase in the

(Home Rule cities, those over 25,000 automatically, e.g., Crystal Lake, Algonquin, Lake in the Hills, and those where citizens have approved Home Rule status in a referendum, e.g., Barrington Hills, can get as much money as their elected officials want. Indeed the main reason that cities like Woodstock and Huntley will have a special census as soon as they think they have crossed the 25,000 person level will in order to get revenue not otherwise available. See most recent U.S. Census results for McHenry County municipalities here. Woodstock is 270 people short of the magic number of 25,000; Huntley – 707.)

Bill Vaselopulos, the long-time and quite knowledgeable tax rate guy for the Cook County Clerk, was quoted in an article about a little over a week ago about how the system works.

Reporter Lisa Donovan summarized Vaselopulos’ explanation well:

“This year, a drop in assessed values of homes, along with a drop in the state equalizer, drove the tax rates up in most parts of the county to meet the demands of the taxing districts.”

Note how she uses the word “demands” to describe what tax district officials do.

I mention this because it is so rare that reporters present tax information from a taxpayers’ point of view.

Reporters would usually use the word “request,” not “demand.”

School board, special district and municipal officials are not forced to ask for more money.

They could ask for the same amount they are getting in the current year.

But, I don’t know of any tax district under the tax cap whose elected officials did not try to capture the maximum amount of money allowed under the tax cap, in other words, the entire 2.7% increase in the CPI allowed by law.

McHenry County property owners have already paid that increase…assuming they had enough money set aside to pay on time.

Next year, greedy tax districts will only be able to extract 1.7% out of homeowners’ pockets. (For a history of CPI’s since the Tax Cap took effect, click here.)

That, of course, means tax bills will go up next year.

With today’s billings from Quest International, we move into the second month of 2011.

Quest is the company selected by McHenry County Special Prosecutor Henry Tonigan in his unsuccessful quest to convict McHenry County State’s Attorney Lou Bianchi of felony criminal offenses.

The Special Prosecutors did not make use of Sheriff's Deputies to deliver subpoenas, even to those in the courthouse.

Robert Seigalski, Lee Flosi, Patrick Hanretty, Gerald Theis, James P. Reilly and Dan Jerger bill the Special Prosecutors $135 per hour, except for some travel, which Scigalski notes he bills at $70 an hour. The others do not bill $70 for travel time.

Here are the billings for February of this year:

2-3-11 0.25 hours – Jerger: Prepared and responded to email.

2-4-11 2 hours – Flosi: McHenry Co. Matter: To Aurora with R. Scigalski to serve Kiawana Guyton…, Kiawana not home: Mileage 46

2-5-11 1 hour – Flosi: McHenry Co. Matter: To Aurora, & attempt to serve Kiawana Guyton…, Kiawana not home: Mileage 46

2-7-11 3.5 hours – Seigalski: Meet with Quest Agents O’Connell and Hanretty/ provide subpoenas and info for interveiw/ Conf calls with Agents and McQueen / review – Met with again ASA Chrzanowski in Palatine

2-7-11 7 hours – Hanretty: Conference with Seigalski and O’Connell in Palatine. Serve subpoenas in McHenry County on Morzos and three Reids.

2-8-11 2.25 hours – Flosi: McHenry Co. Matter: To Aurora, & attempt to serve Kiawana Guyton…Kiwania not home, serve occupant in her apt. at 2:55 PM. Prepare report of service. Mileaage 46

2-10-11 4.5 hours – Seigalski: Prep for & travel to Woodstock for GJ [Grand Jury]

2/10/11 1.5 hours – Seigalski: Prep for & travel to Woodstock for 80M ($70 x2)

2-10-11 4 hours – Jerger: Prepared digital photographs for discovery and printed.

2-15-11 4 hours – Seigalski: Compile photos and CDs for discovery and meet with Pros[ecution] Team at Tonigan’s office for conference

2-15-11 4 hours – Hanretty: Administration processing of affidavits of service of subpoenas from 2/7. Database research for a “Jackie” Jacques.

2-16-11 2 hours – Hanretty: Database research for a “Jackie” Jacques.

2-17-11 1.5 hours – Flosi: McHenry Co. W/ Scigalski to…Aurora & attempt to Interview Kiawana Guyton. Mileage 46.

2-18-11 7.5 hours – Hanretty: Subpoena service at McHenry Co. Administrative Offices, 2200 N. Seminary Rd. then attempt to locate Tiffany Albrect. Steven Albrecht at {number redacted] Sycamore, Crystal Lake, IL.

2-19-11 1.25 hours – Flosi: McHenry Co. To…Aurora & attempt to interview & serve Kiawana Guyton. No answer to repeated knocks on the Apt. Door. Mileage 46

2-21-11 1.25 hours – Flosi: McHenry Co. To…Aurora & attempt to Interview & serve Kiawana Guyton, No one responded to repeated raps on the front door. Observation at the rear revealed that no lights were on in the house. Milegate 46.

2-21-11 1 hour – Jerger: Teleconferenced and transferred sample audio tracks for recording presentation to Grand Jury.

2-22-11 2.5 hours – Seigalski: Conduct investigation re Morzos matter/ contact McQueen & Hanretty

2-22-11 3.5 hours – Jerger: Teleconferenced with Tom McQueen regarding case details. Emailed Tom McQueen. researched tape restoration options. Audio conversion for Grand Jury.

2-23-11 5 hours – Seigalski: Contact with Jacques for additional questions / prepare, send & prep & send Bates / work w Dan on tapes

2-23-11 1.25 hours – Flosi: McHenry Co: To home of Kiawana Guyton Aurora, IL and attempt to serve & interview. No Answer No one home. Mileage 46

2-23-11 4 hours – Jerger: began initial process of T4 and T5 evidence. Prepared converted audio recordings and methods for Grand Jury.

2-24-11 4.5 hours – Seigalski: Grand Jury appearance & testimony / assist witnesses (6)

2-24-11 1.5 Hours – Seigalski: Prep for & travel to Woodstock for 80 M ($70 x2)

2-24-11 5 hours – Jerger: Prepared, traveled to and returned from 2200 N. Seminary Ave., Woodstock, Il 60098. Grand Jury potential testimony and audio recording support.

2-24-11 Bianchi Indicted a Second Time

2-28-114 hours – Jerger: Forensically processed and duplicated T4 and T5 evidence in preparation for discover. Teleconferenced with Tom McQueen.

The legal bills of Grafton Township for March and April, 2011, follow:

The analysis shows that of the$16,313.20, 82.3% was billed by Ancel Glink, the law firm representing Grafton Township’s Trustees.  The dollar amount is $13,430.05.

John Nelson, attorney for Township Supervisor Linda Moore billed $2,883.15.

Special Prosecutors Thomas McQueen and Henry Tonigan. Photo by First Electric Newspaper.

With the McHenry County on the offensive, Special Prosecutor Henry Tonigan has filed no additional bills for his services, those of his assistant Thomas McQueen and investigative firm Quest International.

We know the team is still doing stuff, because their third case–the one against McHenry County State’s Attorney’s Investigator Ron Salgado–got bounced out of court in Rockford.

See

Special Prosecutor Henry Tonigan’s Efforts Against McHenry County State’s Attorney’s Office Continue to Disintegrate

It couldn’t be characterized as “transparent,” but the secret meeting the McHenry County Board held on Feb. 14, 2011, to discuss legal bills from Special Prosecutor Henry Tonigan doesn’t qualify as “Illegal.’

Former McHenry County Board member Lou Anne Majewski filed a complaint about it on March 28th with the Public Access Division of the Illinois Attorney General’s Office about the closed door session.

In a letter dated June 3, 2011, Assistant Public Access Counselor Amanda Lundeen ruled that the Board was discussing “pending litigation.” Weighing in on the matter is the fact that the County is an intervenor in the case involving the appointment of the special prosecutor. Majewski argued that the Appellate Prosecutor was the intervenor.

Majewski also argued that the meeting concerned the payment of the special prosecutor’s bills in his criminal case against McHenry County State’s Attorney Lou Bianchi, which she contended was not eligible to hide from the public.

The Public Access Counselor’s Office ruled that the resolution concerning Tonigan’s bill was discussed “only as a part of the Board’s overall litigation strategy”… and, therefore, was “proper” to discuss in private.
Prior to issuing the opinion, AG Office staff read the minutes of the Executive Session and listened to a tape of the meeting behind closed doors.

Yesterday, Kevin Craver wrote an article for the Northwest Herald in which three members of the McHenry County Board’s Legislative Committee were reprorted to have met in private.

The Open Meetings Act provides that a majority of no committee may meet in private and, in any event, must give 48 hours notice.

Democrat Kathy Bergan Schmitt told the paper that such action was “inappropriate.”

The three committee members involved were Marc Munaretto, John Jung and Nick Provenzano.

Munaretto said that the three were not in the room at the same time, that when a third one came in another left.

The NW Herald has referred the matter to the Public Access Counselor, the article says.

Thus far, the McHenry County Board has abdicated it responsibility to review bills submitted from Special Prosecutor.

Wednesday, McHenry County Blog posted the most recent bills from Quest International the firm hired to do the field work and computer analysis.

$225,000 billed so far, according to McHenry County State’s Attorney Lou Bianchi’s defense counsel Terry Elk.

This is the firm for whom computer forensic “expert” (qualified as such for the trial) Dan Jerger worked. He did not know that an anti-virus program was run on Lou Bianchi assistant Joyce Synek’s hard drive. He was unable to inform the court when various documents were created, a key element, it seems.  He did not cinch the case for the Special Prosecutor.

In any event, members of the County Board, published here for your perusal are the first bills submitted–six pages worth totaling almost $39,700.

The items were billed between December 29, 2009 and May 31, 2010.

I see a couple of instances in which Quest President Robert Scigalski notes he did not charge $70 an hour for travel.

See anything you would not have approved if Judge Gordon Graham had let you see them?

What would have hurt the investigation and should have been redacted when the bill was submitted?

What should you have been allowed to have seen then?

People mentioned in the billings are

• Robert Scigalski
• Illinois State Police Sgt. James Harris
• Henry “Skip” Tonigan
• Dan Jerger
• Tom McQueen
• Lee Flosi
• David Stone
• Dennison
• Pat Hanretty
• Jim Riley
• Nichole Owens
• Thomas Carroll
• Jamie Rein
• Dimetri
• Anne Henslee
• Margi Worth
• Don Leist
• David Johnston
• Mary McClellan
• William LeFew
• William Draths
• John Hadley
• Pam Palmer
• Tom Sullivan

Click to enlarge any image below:

Some wonder, "How much more money is in the taxpayers' honey pot?"

Special Prosecutor Henry Tonigan’s bill for his multi-year investigation of McHenry County State’s Attorney Lou Bianchi’s alleged misuse of office resources for political purposes took another step Monday when he filed a bill for August through November of last year.

It was for almost $90,800.

That brings the total almost to $312,300.

Besides the original scope of the investigation, he and Thomas McQueen, the man billing for the most legal time for the four months, have expanded their probe with the approval of Circuit Court Judge Gordon Graham to include official acts of alleged favoritism by State’s Attorney Lou Bianchi and a “nephew” of his Investigator Ron Salgado who was attending Prairie Ridge High School in Crystal Lake.

In addition, Bianchi is charged with “agree(ing) to recognizance bond in a felony theft case for…John Doe #3 who Bianchi said was his ‘nephew’ and that the Assistant State’s Attorney should continue the case until a first offender program was in place in McHenry County so John Doe #3 could have the benefit of that program.”

Bianchi has denied that he had a nephew who got into trouble.

Similar allegations have been lodged against State’s Attorney Investigator Ron Salgado for some shirttail nephew resulting from a long-ago divorce of a relative.

A second investigator has been charged with using his car for personal purposes.

Henry Tonigan

Thomas McQueen

Henry Tonigan, the Special Prosecutor named by then-Associate Judge Gordon Graham to probe political use of the State’s Attorney’s Office by Lou Bianchi, has billed again.

This time it is his associate, Thomas McQueen, who was the big winner.

He bagged $48,120.60 more than twice as much as his boss, Tonigan.

Tonigan, at least titularly the guy in charge of the investigation, only billed $21,798.74.

The agency doing the ground work, Quest, put in for almost as much, $20,873.

Judge Graham’s court order is below:

Note that the bill is only for services rendered in August, September, October and November.

The three months’ bill for December, January and February is still outstanding.

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Photo credits: Pete Gonigan, First Electric Newspaper.