McHenry County’s ‘largest ‘drug bust’’ started with anonymous tips about a Crystal Lake home

‘Heavy vehicle traffic’ seen coming, going from home ‘at various hours throughout the day and night’

Matthew Lilla leaves court after a hearing Wednesday, April 12, 2023, in the McHenry County courthouse. Lilla, 36, of Chicago, is charged with drug trafficking and other felonies.

McHenry County’s potentially largest drug bust – part of an alleged cross-country drug ring – was triggered nearly three years ago by anonymous tips about suspicious activity at a Crystal Lake home, according to McHenry County court records.

Tipsters told police that “heavy vehicle traffic was seen coming and going from the residence ... at various hours throughout the day and night” and a white transit van with Oregon plates frequented the house, according to the documents.

The subsequent multi-layered, two-year investigation spurred by those tips spanned the U.S., involving multiple locations and surveillance tactics as well as several police agencies throughout Illinois and other states. It culminated in October, when North Dakota State police stopped a man driving one of the alleged ringleader’s vans near the Minnesota border, according to court records.

Now, as prosecutors in the McHenry County State’s Attorney’s Office are seeking to recover more than $1 million in cash, bank accounts, homes, vehicles, tools and jewelry, the ongoing forfeiture proceedings are offering an inside glimpse at the drug operation allegedly carried out by Matthew D. Lilla, 36, of Chicago and his associates.

In court documents, prosecutors dubbed the alleged money laundering and cross country drug-trafficking operation “Lilla’s Drug Trafficking Organization.” It is being considered possibly the “largest ‘drug bust’ ” in McHenry County, according to a McHenry County Sheriff’s Office spokesperson.

Tipsters told police that “heavy vehicle traffic was seen coming and going from the residence ... at various hours throughout the day and night”

—  Complaint for forfeiture documents in McHenry County courthouse

Criminal cases are ongoing against Lilla as well as two Huntley men and another from Lake in the Hills, court records show.

All men have pleaded not guilty. Attorneys for Lilla and his associates have declined to comment for stories regarding their cases.

All told, the investigation into their alleged operation involved law enforcement agencies from across the country – including the McHenry County Sheriff’s Office, Cook County Sheriff’s Office, the Rockford Drug Enforcement Administration Office and the U.S. Attorney’s Office.

The investigation was launched after the McHenry County Sheriff’s Office received “multiple anonymous tips” about the illegal sale and use of [marijuana] and cocaine at the home, according to court documents.

The calls triggered McHenry County Sheriff’s Office Narcotics Unit to set up surveillance of the residence. The van was at the residence for several days, then not seen for several days. The van had been seen at the home “as far back as August of 2020,” according to the document.

On April 6, 2021, Lancaster County Sheriff’s Department stopped one of Lilla’s alleged associates, in Lancaster County, Nebraska, while he was driving a different transit van, bearing Illinois license plates.

A search of the van turned up about $260,000 in cash, drug ledgers, cell phones, multiple receipts and a package addressed to Lee at Crystal Lake home, according to the document.

During a police interview with the Lancaster County Sheriff’s Department, the man said the money found in the van “was 100% tied to marijuana,” according to the document.

Further investigation showed that Lilla bought the van in January 2020 in Ashland, Oregon, and it was driven about 15,000 miles in just over two months, according to the documents.

A search of the man’s cellphone showed “numerous communications” between him and Lilla, many of them using Signal, an end-to-end encrypted communications application.

Signal, which does not store messages, is “known to be used by individuals who participate in the sale and distribution of [marijuana] and controlled substances,” according to the document.

Messages showed Lilla directing the man “to drop off and pick up suspected [marijuana] and money at various locations throughout the United States,” according to the documents.

Messages also reveal “apparent attempts of money laundering” involving Lilla and other associates.

Prosecutors list 16 limited liability corporations, set up by Lilla as “shell corporations” to allegedly launder the drug money, that show “several irregularities or suspicious activities,” according to the documents.

Messages also led police to believe that at the time of the traffic stop in Lancaster County, Lilla’s associate was “likely ... transporting the money found in the van to Oregon” at Lilla’s direction, according to the documents.