Lawsuit Alleging Illegal Spending Refiled Against 113A Administrators, Board Members

A $12 million lawsuit alleging illegal spending and concealment was refiled Monday against administrators and board members in .

Filed on behalf of attorney Clint Krislov of Krislov and Associates, the lawsuit claims District 113A officials "engaged or aided in illegal spending, and then took steps to conceal expenditures by draining funds legally appropriated for other purposes, all in violation of Illinois law," which allegedly resulted in the loss of $12 million in taxpayer money, the complaint said.

According to the lawsuit, the alleged misconduct took place from 2007 to 2010.

The lawsuit was filed in conjunction with the Center for Open Government at IIT Chicago-Kent College of Law.

Plaintiffs in the case are former District 113A Board Member Janet Hughes and Lemont residents Laura Reigle, Duane Bradley and Louis Emery. According to court documents, they are filing the suit as a derivative action— "in the name and for the benefit of the School Board District 113A." 

Listed as defendants are District 113A Supt. Tim Ricker; Asst. Supt. Mary Gricus; former Business Manager and Treasurer Robert Beckwith; current Board Members Lisa Wright and Kevin Doherty; and former Board Members John Wood, Sue Murphy, David Leahy, Gwen O'Malley and Al Albrecht.

Also named as defendants are Lloyds Illinois Inc., an insurance broker that entered into a school treasurer's bond with Beckwith and Knutte Associates, an accounting firm responsible for the district's financial audits from 2007 to 2010.

The newly filed complaint is an amended version of a lawsuit . The previous version of the suit by Cook County Judge Rita M. Novak, who ruled that the complaint could be refiled with more particularity as to each defendant's actions, and whether they are being sued in their personal or official capacity.

Each of the defendants are being sued in his or her individual capacity, Krislov said in the complaint.

According to the documents filed Monday, the plaintiffs are alleging that District 113A board members and employees "repeatedly caused monies from the district's working cash fund to be diverted or otherwise used in violation of law and without proper notice having been given to District 113A taxpayers."

The lawsuits claim that the district's financial statements from 2007 to 2009 show the district spent more than $3 million more than was authorized in the board-approved budgets. The board's spending practices have resulted in a loss of approximately $12 million in taxpayer money, according to the claims.

The lawsuits also allege that the accounting firm Knutte and Associates, which performed audits of the district's financial statements for fiscal years 2007 to 2009, was aware of the legal violations and aided in wrongdoing by providing clean audits of the district's financial statements. According to the files, "the effect of these audits was that the illegal misspending, overspending and illegal transfers described above were concealed."

Also named as a defendant was Lloyds London, the insurance firm that entered into an agreement with the district's business manager, Robert Beckwith, in 2005. As a surety, Lloyds is obligated to pay damages to District 113A should the court find that Beckwith violated the law in his management of district funds, said Terrance Norton, director of the Center for Open Government.

District 113A attorney James Petrungaro was not immediately available for comment.