Case: 1:17-cr-00602 Document #: 1 Filed: 09/13/17 Page 1 of 11 PageID #:1

r**HLEtr}
SEP

602

LTCR

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION

132rJ1TW

THOMAS G. BRUTON

RECEIVED
StP 1 s

2017

MICHAEL T. MASON

cGnx,ggrou,St$ltcrgu5lAMERT.A

)

SiATTS MAGISTRATE JUDGE
UNTTED
_

No.

UNTEO STATES DISTRICT COURT

)

)
)

v.

LAWRENCE WYLLIE

Violations: Title 18, United States Code,
Sections 666(a)(1)(A) and 1343

)

UUO.AE FHNERMAN
The SPECIAL FEBRUARY 2016 GRAND JURY charges:
MACISTRATE JUDGE KI[{

a.

Lincoln-Way Community High School District 210 (Lincoln-Way)

operated high schools

in Illinois, which were located in the towns of New Lenox, Frankfort,

Mokena, Manhattan, Tinley Park, and Orland Park. These high schools were named Lincoln-

Way East, Lincoln-Way West, Lincoln-Way North and Lincoln-Way Central. Lincoln-Way's
primary source of revenue was from property taxes.

b.

Defendant LAWRENCE WYLLIE was the Superintendent

Way. As Superintendent, WYLLIE

of Lincoln-

had the authority to direct the use of school district funds

only for legitimate school district purposes.

Lincoln-Way had a publicly-elected school board consisting

of

seven

members who, among other things, voted on major school district initiatives and personnel matters,

including the issuance of debt and the retention and compensation of the Superintendent.

d.

WYLLIE's compensation as Superintendent was governed by a contract

that was voted on and renewed by the school board in or about May

2010.

One of the factors the

school board considered in renewing WYLLIE's contract was the financial performance of the
school

district.

The terms of the contract identified all of

base salary and a district-funded

WYLLIE's compensation, including his

annuity. WYLLIE's contract did not provide for

a retirement

 Case: 1:17-cr-00602 Document #: 1 Filed: 09/13/17 Page 2 of 11 PageID #:2

stipend and did not provide a payout for unused vacation days upon his retirement.

e.
issuance

Ln2006, residents of the district voted in a public referendum to approve the

of a maximum of $225 million in bonds for the purpose of funding the building of two

new high schools (North and West) and renovating and equipping two existing high schools
(Central and East). After the referendum passed, Lincoln-Way, at the request of WYLLIE and
with the approval of the school board, issued bonds in the amount of $52 million in2006 and $123

million in2007.

f.

In or about 2009, at the request of WYLLIE and with the approval of the

school board, Lincoln-Way issued a total

of $29 million in bonds pursuant to the remaining

authority granted from the 2006 public referendum. WYLLIE represented to the school board,
the bond purchasers, and the public that $10 million of the bonds would be used in accordance

with the 2006 public referendum limiting the use of the funds to capital expenditures, and not for

the general operating expenses of the school district. The remaining $19 million was
refinancing of

a

a

portion of the district's existing bond obligations.

g.

Purchasers of the 2009 bonds included various financial institutions in the

United States. These bondpurchasers received disclosures from Lincoln-Waythat the 2009 bond
proceeds would be used in accordance with the terms of the 2006 public referendum.

h.

Lincoln-Way paid general operating expenses from an account at Old

Second Bank while the 2009 bond funds were maintained at a U.S. Bank account.

i.

Lincoln-Way generated annual audited financial statements after the close

of the fiscal year and made these financial statements publicly available on its website. LincolnWay also publicly reported its cost-per-pupil for the fiscal year.

 Case: 1:17-cr-00602 Document #: 1 Filed: 09/13/17 Page 3 of 11 PageID #:3

j.

Vendors

A

and

B were vendors that

provided general operating and

maintenance services to Lincoln-Way and who received payment for services from Lincoln-Way

that derived from the 2009 bond proceeds. Vendor C was a vendor that provided general
operating services for Superdog dog obedience school, which was located at Lincoln-Way North.

2.

Beginning in or about January 2}}g,and continuing until in or about July 2013, in

the Northern District of

Illinois, Eastern Division, and elsewhere,
LAWRENCE WYLLIE,

defendant herein, devised, intended to devise, and participated in a scheme to defraud and to obtain

money and property by means of materially false and fraudulent pretenses, representations, and
promises, and by concealment of material facts, which scheme is further described below.

3.

It was part of the scheme that defendant WYLLIE fraudulently misused school

district funds and resources, including by:

(i)

making materially false statements

and

representations to the school board, the bond purchasers, and the public about the purpose and use

of the 2009 bond proceeds so that he could fraudulently conceal the school district's true financial
condition; and (ii) fraudulently misappropriating school district funds and resources for his own
personal benefit.

4.

It was further part of the scheme that defendant WYLLIE represented to the school

board, the bond purchasers, and the public that, consistent with the 2006 public referendum, the
2009 bond proceeds would be used for capital expenditures and not for the school district's general

operating expenses, when WYLLIE knew that was false because he intended to and did use at least
$7

million of the 2009 bond proceeds to fund the school district's general operating expenses.

5.

It was fuither part of the scheme that defendant WYLLIE represented to the school

 Case: 1:17-cr-00602 Document #: 1 Filed: 09/13/17 Page 4 of 11 PageID #:4

board and the public that the 2009 bond proceeds would not be used to fund payroll for school

district employees, when WYLLIE knew that was false because, from the at least $7 million of
bond proceeds that he used to fund operating expenses, he intended to and did use at least $1

million of those bond funds to fund payroll for the school district.

6.

It was further part of the scheme that, in or about December 2009, when explaining

the financial challenges of the school district to the school board and the public, WYLLIE
represented that the State of Illinois was behind approximately $5 million in payments to the school

district, when he knew that was false because the State of Illinois was not delinquent in the amount

of $5 million and that the school district's financial challenges were a result of its expenditures
exceeding its revenues.

7.

It was further part of the

scheme that between approximately March 2010 and

October 2012, defendant WYLLIE fraudulently and repeatedly (i) reclassified millions of dollars

in general operating expenditures
ledger, and

as purported bond expenditures

in the school district's general

(ii) transferred millions of dollars from the U.S. Bank account where the district

maintained its bond funds to the Old Second Bank account which the district used to pay general
operating expenses. In this manner, defendant concealed the scheme and the true financial health

of Lincoln-Way from the school board and the public by fraudulently appearing to lower the
district's net operating expenditures in its audited financial statements and its reported cost-perpupil calculation. The understatement of operating expenditures and misuse ofbond funds during
this time period totaled at least $7,000,000

8.

It

was further part

of the scheme that defendant WYLLIE

fraudulently

misappropriated school district funds and resources for personal projects that were not for the

4

 Case: 1:17-cr-00602 Document #: 1 Filed: 09/13/17 Page 5 of 11 PageID #:5

benefit ofthe school district, such as WYLLIE's fraudulent use of at least $50,000 in school district

funds, including the 2009 bond funds, to build and operate Superdog, a dog obedience training
school.

9.

It was further part of the

scheme that defendant

WYLLIE, upon retirement in or

about June 2013, misappropriated at least $16,500 of school district funds by falsely representing
that these funds were a retirement stipend.

10.

It was further part of the scheme that defendant WYLLIE misappropriated over

$14,000 of school district funds by falsely representingthat these funds were unused vacation
days.
1

1.

It was frrtherpart ofthe scheme that defendant WYLLIE didmisrepresent, conceal,

and hide, and caused to be misrepresented, concealed, and hidden, acts done in furtherance of the
scheme and the purpose of those acts.

12.

As a result of the scheme, defendant WYLLIE fraudulently caused Lincoln-Wayto

assume at least $7

million in additional debt by the fraudulent issuance ofbonds, on which Lincoln-

Way continues to pay interest, as well as suffer a loss of at least $80,000 in school district funds
that were misappropriated and misused by WYLLIE for his own personal benefit.

 Case: 1:17-cr-00602 Document #: 1 Filed: 09/13/17 Page 6 of 11 PageID #:6

1

3.

On or about October

ll

, 2A12, in the Northern

District of Illinois, Eastern Division,

and elsewhere,

LAWRENCE WYLLIE,
defendant herein, for the purpose of executing the above-described scheme, did knowingly cause
to be transmitted by means of wire communication in interstate corlmerce, certain writings, signs,

and signals, namely, an interstate wire transfer of approximately $403,391 from U.S. Bank,
through the Federal Reserve System, to Old Second Bank;

In violation of Title 1 8, United States Code, Section 1 343.

 Case: 1:17-cr-00602 Document #: 1 Filed: 09/13/17 Page 7 of 11 PageID #:7

COUNT TWO
The SPECIAL FEBRUARY 2016 GRAND JURY turther charges:

1.

The allegations inparagraphs 1 through 12 of Count One of this indictment are

incorporated here.

2.

On or about October 8,2012, in the Northern District of Illinois, Eastern Division,

and elsewhere,

LAWRENCE WYLLIE,
defendant herein, for the purpose of executing the above-described scheme, did knowingly cause
to be transmitted by means of wire communication in interstate conlmerce, certain writings, signs,

and signals, namely, an interstate wire transmission processed at the Federal Reserve Processing
Center, which wire transmission credited the amount of $23,969.82 to a bank account at Old Plank

Trail Community Bank, and which wire transmission was sent in response to a check deposit drawn
on Lincoln-Way's bank account at Old SecondNational Bank to pay for general operating services

provided by Vendor A to Lincoln-Way.
In violation of Title 18, United States Code, Section 1343.

 Case: 1:17-cr-00602 Document #: 1 Filed: 09/13/17 Page 8 of 11 PageID #:8

COUNT THRPE
The SPECIAL FEBRUARY 2016 GRAND JURY turther charges:

1.

The allegations in paragraphs

I

through 12 of Count One of this indictment are

incorporated here.

2.

On or about October 17,2012, in the Northern District of Illinois, Eastern Division,

and elsewhere,

LAWRENCE WYLLIE,
defendant herein, for the purpose of executing the above-described scheme, did knowingly cause
to be transmitted by means of wire communication in interstate commerce, certain writings, signs,
and signals, namely, an interstate wire transmission processed at the Federal Reserve Processing
Center, which wire transmission credited the amount of $941.50 to a bank account at Schaumburg

Bank and Trust, and which wire transmission was sent in response to a check deposit drawn on

Lincoln-Way's bank account at Old Second National Bank to pay for general operating services
provided by Vendor B to Lincoln-Way.
In violation of Title 18, United States Code, Section 1343.

 Case: 1:17-cr-00602 Document #: 1 Filed: 09/13/17 Page 9 of 11 PageID #:9

COUNT FOUR
The SPECIAL FEBRUARY 2016 GRAND JURY turther charges:

1.

The allegations in paragraphs 1 through 12 of Count One of this indictment are

incorporated here.

2.

On or about February 20, 2013, in the Northern District of Illinois,

Eastern

Division, and elsewhere,
LAWRENCE WYLLIE,
defendant herein, for the purpose of executing the above-described scheme, did knowingly cause
to be transmitted by means of wire communication in interstate cofirmerce, certain writings, signs,
and signals, namely, an interstate wire transmission processed at the Federal Reserve Processing
Center, which wire transmission credited the amount of $540 to a bank account at First National

Bank, and which wire transmission was sent in response to a check deposit drawn on Lincoln-

Way's bank account at Old Second National Bank to pay Vendor C for the general operating
services of SuperDog;

In violation of Title 18, United States Code, Section 1343.

 Case: 1:17-cr-00602 Document #: 1 Filed: 09/13/17 Page 10 of 11 PageID #:10

COUNT FI\TE
The SPECIAL FEBRUARY 2016 GRAND JURY turther charges:

1.

The allegations in paragraphs

I

through 12 o'f Count One of this

ate

incorporated here.

2.

On or about July 19, 2073, in the Northern District of Illinois, Eastern Division,

and elsewhere,

LAWRENCE WYLLIE,
defendant herein, for the purpose of executing the above-described scheme, did knowingly cause
to be transmitted by means of wire communication in interstate corlmerce, certain writings, signs,

and signals, namely, an interstate Automated Clearing House ("ACH") transaction from Old
Second Bank processed through the Federal Reserve System to Old Plank Trail Community Bank

in the amount of

approximately $19,588r which funds represented part

misappropriation of school district funds;

ln violation of Title 18, United States Code, Section 1343.

10

of

defendant's

 Case: 1:17-cr-00602 Document #: 1 Filed: 09/13/17 Page 11 of 11 PageID #:11

COUNT SIX
The SPECIAL FEBRUARY 2016 GRAND JURY turther charges:
1

.

The allegations in paragraphs 1 (a) through 1 (d) of Count One of this indictment are

incorporated here.

2.

On or about July 19, 2013, in the Northern District of Illinois, Eastern Division,

and elsewhere,

LAWRENCE WYLLIE,
defendant herein, as an agent of the Lincoln-Way School Community High School District 210, a
local government that received in excess of $10,000 in federal funding in the twelve-month period

from January 7,2013 through December 31,2013, embezzled, stole, obtained by fraud, and
otherwise without authority knowingly converted to his own use, approximately $30,878 in school

district funds that were under the care, custody and control of Lincoln-Way, which defendant
fraudulently represented were payments for a retirement stipend and unused vacation days;
In violation of Title 18, United States Code, Section 666(aX1XA).

A TRUE BILL:

FOREPERSON

ACTING UNITED STATES ATTORNEY

11