Dolton police Deputy Chief Lewis Lacey, a strong ally of embattled Mayor Tiffany Henyard, 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 against Lacey 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.
An arraignment date has not yet been scheduled.
Though unrelated to his duties in Dolton, Lacey’s indictment is the latest shoe to drop in a burgeoning federal investigation into alleged corruption by Henyard, the longtime mayor who has been named in a slew of federal subpoenas served earlier this year on the Village Hall.
In a statement to the Tribune on Monday, Lacey’s attorney, Gal Pissetzky, said the charges were the result of a “witch hunt” aimed at Henyard.
“Mr. Lacey has been serving the community of Dolton for years,” Pissetzky said. “He is an excellent police officer and has been an upstanding chief of police. … This is a witch hunt where they are taking down Mr. Lacey to try to get to the mayor.”
Trustees last week voted to place Lacey on administrative leave for an undefined period. After the meeting, Trustee Jason House said the board had received some information about the deputy chief that needs to be investigated, and that “we would expect it to be enforced.”
Burt Odelson, an attorney for the trustees, said Monday that Lacey continued reporting for work after being placed on leave.
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 that he controlled, according to the charges.
Among the lies 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. Those lies allowed Lacey to substantially understate his monthly income and avoid creditors, according to the charges.
The charges were similar to those brought in April against Keith Freeman, a longtime aide to Henyard, who was accused of making false statements in his bankruptcy petition filed earlier this year to conceal from creditors his assets and sources of income and a significant claim against him.
Freeman, 45, of Orland Park, has pleaded not guilty, and a status hearing in his case is set for Wednesday.
Last week, Henyard told spectators at the monthly Village Board meeting that Freeman, the village’s administrator, had been fired, although trustees said the mayor lacked the legal authority to do so and did not move to support her decision.
When she asked trustees to make a motion to support her decision, the five trustees present were silent.
Trustee Kiana Belcher made a motion to adjourn the meeting, and Henyard ruled the trustee was out of order, then said, “Keith Freeman is fired from the village of Dolton.”
Moments later, apparently talking to TV cameras or the camera recording the village’s livestream of the meeting, Henyard said, “Keith Freeman, I know you’re watching, you no longer work for the village of Dolton.”
Freeman, the top aide to Henyard as Thornton Township supervisor, was dismissed from the township position last month.
Earlier this year, the board hired former Chicago Mayor Lori Lightfoot to do her own probe of Henyard and her administration. Lightfoot shared her preliminary findings in a public meeting last Thursday.
The Daily Southtown’s Mike Nolan contributed.
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