An attorney for indicted Dolton police official Lewis Lacey said Tuesday that village trustees lacked the authority to place Lacey on leave and that his client should be paid.
“They’re operating in a way that in my opinion is not legal,” Gal Pissetzky said. “The mayor is the one who signs the checks.”
Pissetzky said Lacey continued to work last week despite a vote by trustees Aug. 5 to put him on leave. He said he did not know if Lacey was still reporting for work.
Lacey was indicted Monday on federal bankruptcy fraud charges alleging he lied under oath in a scheme to hide assets and income from creditors to avoid paying more than $40,000 in a lawsuit settlement.
The nine-count indictment returned in U.S. District Court charged Lacey, 61, of Matteson, with bankruptcy fraud, making false statements and declarations in a bankruptcy case and perjury. Each count carries a maximum sentence of five years in prison.
Pissetzky said that if he were on leave, Lacey should be getting paid. He said a letter sent from a law firm working with village trustees to Dolton’s treasurer indicated Lacey would no longer be paid.
He said the letter was sent by Michael McGrath, a partner in the firm Odelson, Murphey, Frazier & McGrath, last week.
The firm is advising village trustees on legal and other matters but said it has not been paid by the village for work that it has billed.
“Lacey is not getting paid because of this letter,” Pissetzky said. “They don’t have any legal grounds to do that unilaterally.”
The attorney said he sent a letter Monday to the village advising that Lacey should continue to be paid. He said he has legal options available to prod Dolton to pay Lacey.
McGrath did not immediately respond to messages Tuesday.
As former Chicago Mayor Lori Lightfoot attempts to speak during a Dolton Village Board June 3, 2024, Dolton Deputy Chief Lewis Lacey orders police to clear the room. (Terrence Antonio James/Chicago Tribune)
Pissetzky noted the timing of a report by former Chicago Mayor Lori Lightfoot and Lacey’s leave.
“Lightfoot’s report comes out and all of a sudden my client is placed on some sort of leave,” he said. “They don’t have the power to fire him.”
Dolton trustees hired Lightfoot in April to serve as a special investigator, tasked with looking into village finances and spending by Mayor Tiffany Henyard’s administration.
Lightfoot reported that overtime costs in the Police Department have been on the rise, topping $1.6 million in the fiscal year that ended April 30.
She said Lacey had received overtime pay of nearly $216,000 from fiscal year 2022 through fiscal 2024 and into the first three months of the current budget year.
Lightfoot suggested it appeared Lacey was collecting overtime that he was not entitled to during the period he was not part of the police union.
Village trustees said they received some information from Lightfoot’s preliminary investigation ahead of a public meeting Aug. 8 where the full report was released.
Pissetzky said any overtime payments to Lacey had been approved by village officials, including village administrator Keith Freeman.
“Keith and trustees and everyone around approved that,” he said.
Pissetzky said he did not know whether Lacey was part of a security detail for Lightfoot composed of village officers, but that the pay was for “performing other services” and “the compensation was well-earned.”
Lacey held the title of deputy police chief and the rank of commander. Pissetzky said he did not know how many years Lacey worked for Dolton but that it had been “for a very long time.”
Burt Odelson, a partner in in the firm, said Monday that Lacey for a time was not part of the collective bargaining unit representing Dolton’s rank-and-file officers, but at some point was reinstated to the unit by Henyard.
Pissetzky said his client was still reporting for work as of last week, but did not know Lacey’s current employment statu.s
Pissetzky said his client had been told by Freeman that he was on administrative leave, but the attorney was not aware of any directive firing Lacey.
According to the indictment, Lacey has filed numerous personal bankruptcy cases in Chicago beginning in the 1980s.
Two recent petitions filed in 2019 and 2020 automatically stayed enforcement of a settlement agreement Lacey had reached in 2017 with the plaintiff in a lawsuit in state court, the indictment alleged.
The lawsuit involved a woman whose husband was killed in Dolton in 2012. According to the suit, Lacey visited the woman and convinced her to give him tens of thousands of dollars from her husband’s life insurance payout.
Lacey acknowledged in court papers that he “expressed sympathy” for the woman and visited her from time to time to “inquire about her safety and well-being,” but he denied taking any money.
After the lawsuit settled for $55,000, Lacey made initial payments in the amount of $12,000, but according to the fraud charges, he twice filed for bankruptcy to avoid paying the additional $43,000.
In filings and statements made under oath to the bankruptcy court, Lewis underreported his monthly income and concealed bank accounts he controlled, according to the charges.
Among the statements was that he was separated from his wife and that she did not reside with him or contribute to his monthly income and mortgage, the indictment stated. This allowed Lacey to substantially understate his monthly income and avoid creditors, according to the charges.
Pissetsky said an arraignment for his client had not yet been set.
Court records indicate Lacey filed bankruptcy nine times, starting in 1984 and most recently in 2020.
Records show that the most recent bankruptcy, filed in April 2020, was terminated in July of last year for failure to follow terms of a debt repayment plan.
A bankruptcy filing in August 2019 showed Lacey reporting assets of about $252,000 and liabilities of more than $400,000.
Assets listed in that filing included his home in Matteson and three vehicles, but he also had a mortgage on the property and owed money on the vehicles, according to his bankruptcy filing.
At the time, he listed monthly gross income from his employment with Dolton at just under $7,900.
