McHenry Co. (ECWd) -
Charles Lutzow, Principal at CAL Financial Group Inc. and Algonquin Township Supervisor was sued for an alleged breach of Fiduciary Duty and Constructive Fraud in relation to his placing Algonquin Road District funds into accounts that do not name the Road District.
We covered the initial filing in this article. For unexplained reasons, Lutzow failed to answer the complaint initially and was ordered to respond to the complaint back in March as outlined in this article. Our most recent article found here, outlined concerns we identified, specifically Lutzow signing bank documents claiming to be the Township Secretary (clerk), which he is not.
It appears the concerns we raised are included in a Motion for Summary Judgement and actually point to a Federal Criminal statute and alleges Lutzow committed at least one Federal Crime.
Below are key quotes from the motion. We linked the case-law cited so that readers can see how our courts rule on matters like this. Reading how the court applies our laws should provide a broader understanding on how the law is to be applied rather than how some think it applies.
"Moreover, Defendant executed two Corporate Authorization Resolutions wherein he certified to a federally regulated financial institution that he was the “Secretary (Clerk)” of “Algonquin Township Highway”. See Corporate Authorization Resolutions attached hereto as Group Exhibit D"
"Defendant is not the “Clerk” of either Algonquin Township or Algonquin Township Road District and certainly is not the treasurer of “Algonquin Township Highway” because it does not have any legal existence.. But see: False Statements to Banks Act 18 U.S.C. § 1014. See Kay v. United States, 303 U.S. 1 (1938); United States v. Sabatino, 495 F.2d 540 (2d Cir. 1973), cert. denied, 415 U.S. 948 (1974); United States v. Trexler, 474 F.2d 369 (5th Cir.), cert. denied, 412 U.S. 929 (1973) ) (Each holding that a false statement to a federally insured financial institution need not be material to be prosecuted as a felony under 18 U.S.C. § 1014.)"
"Defendant is the Algonquin Township Supervisor and, therefore, is the Road District Treasurer and Algonquin Township Treasurer. The resolution executed in opening the various accounts was made containing false statements. To wit: that the accounts belonged to Algonquin Township and not the Road District, and that Defendant was the Clerk when the Clerk of Algonquin Township is Karen Lukasik."
"Plaintiff’s funds have been placed into the account of Algonquin Township and not in the name of the Road District. See Exhibits A-E (Exhibits showing that accounts for the Road District were placed into accounts in the name of Algonquin Township and that $1,950,358.63 of Road District money was on deposit in the name of a separate unit of government.)"
"In order to have accomplished the act of placing the Road District’s money in the name of Algonquin Township, Defendant would have had to have violated federal law (18 U.S.C. § 1014) and committed an act of official misconduct. Therefore, the action of Defendant is a breach of his lawful duty to comply with both state and federal criminal law and a violation of Defendant’s duty, implied by law, to act in the best interests of the Road District when handling Road District funds. Defendant’s breach divested the Road District of its money and Defendant committed at least one federal crime to facilitate the diversion of Road District assets."
We have been unable to confirm if Lutzow ever took measures to correct the account names.
Legal Counsel for the Township at the time of the alleged violations was James Kelly. Phillip Prossnitz of Woodstock is currently representing Lutzow due to Kelly being conflicted.
A copy of the Motion for Summary Judgement can be downloaded at this link or viewed below.