Judge dismisses lawsuit tied to naming of Algonquin Township Road District bank accounts

A McHenry County judge on Wednesday dismissed a civil complaint that sought $1 million from Algonquin Township Supervisor Charles Lutzow, who was accused of fraudulently opening bank accounts for the township's road district.

Judge Thomas Meyer granted Woodstock-based attorney Philip Prossnitz's March 15 motion to dismiss the allegations filed earlier this year by Algonquin Township Highway Commissioner Andrew Gasser. The civil complaint, which argued that Lutzow transferred road district money into bank accounts that were not labeled explicitly for the "road district," failed to explain how the account's name caused any damage, Prossnitz said.

“One would expect the Complaint to allege the name of the account at the American Community Bank and Trust, or that the Road District funds were improperly deposited into a personal account ... or that Road District funds were improperly withdrawn ...” Prossnitz wrote in his March 15 filing. “None of that is alleged.”

In January, Gasser alleged in a lawsuit that Lutzow committed constructive fraud when he opened highway department accounts at American Community Bank. Lutzow, working as the highway department’s treasurer, transferred road district money from Fifth Third Bank to American Community Bank “but did not put those monies into an account in the name of the road district,” according to the lawsuit.

What Lutzow actually did, he said, was open multiple accounts – each corresponding to different funds within the township and highway department. The accounts, managed by Lutzow, instead were named “Algonquin Township Highway Equipment & Building” and “Algonquin Township Highway Road & Bridge Fund.”

“The allegation is not that the funds have been stolen, there is no allegation the funds were converted or used to pay improper obligations or otherwise disappeared,” Prossnitz wrote. “The allegation is that the Road District was ‘injured’ because the funds are no longer in the name of the Road District. “

The differing names were discovered in December when Denise Ambroziak, a Crystal Lake attorney representing the Edgar County Watchdogs, served American Community Bank in Woodstock with a citation to discover whether the financial institution had money in the accounts of the Algonquin Township Road District – described as the "debtor" – to satisfy a settlement for a FOIA lawsuit.

A bank employee signed her name to the citation document stating the bank had no assets belonging to a debtor known as the Algonquin Township Road District.

Gasser’s attorney, Robert Hanlon, could not be reached for comment. Hanlon could choose to file an amended complaint to keep the case alive. The matter is scheduled for a status hearing Friday morning in McHenry County court.