EAST CHICAGO | Current and former Library Board trustees are facing triple damages for illegally accepting three years of library-paid insurance in a lawsuit filed late Monday by the Indiana Attorney General's office.
Some of those trustees also are accused of approving improper travel, lodging and vehicle expenses claimed by the library's former director, and are named in the lawsuit along with him for repayment of those funds.
Following a State Board of Accounts audit released last week that documented the questionable expenditures, Attorney General Greg Zoeller's lawsuit seeks $583,765 from former Library Director Manuel "Manny" Montalvo and nine current or former library trustees.
"This lawsuit is part of my office's effort to aggressively take legal action against officials who violate the public trust when they spend taxpayers' money as if it were their own," Zoeller said Tuesday.
The audit of library expenditures for the years 2008, 2009 and 2010 recommended Montalvo, who was fired by the board March 16, reimburse the library $12,378 in expenses for which no library business purpose could be determined by the SBA.
With the triple damages allowed by state statute, $37,137 is sought in the lawsuit from Montalvo and the trustees who approved the ineligible expenses, plus costs, attorney fees and interest.
Six library trustees received $182,210 in dental, health, vision and life insurance premiums paid by the library during the three-year period covered by the audit, a practice characterized as illegal by the SBA because state law specifies that library board members "shall serve without compensation."
"Imagine how that $182,000 instead might have been used to expand the minds of young library patrons through new books, materials or services," Zoeller said.
The lawsuit seeks triple damages of $546,629 from former library board members Diana Garcia-Burns, Chasidy Gomez and Gary McCracken, and current trustees Hector Cavazos, Clifton Johnson and Adolfo Velez.
Former trustees Marco Arredondo and Ricardo Garcia, facing repayment requests of $13,153 and $5,585, respectively, already have filed installment promissory notes with Zoeller's office and were not named as defendants for insurance reimbursement.
Two other former Library Board members, Ernest Jones and Marco Popovich, are not alleged to have taken improper insurance premiums, but stand accused with Garcia and the six others of negligence for approving the payments of library funds for Montalvo's disallowed expenses.
The lawsuit has been assigned to the courtroom of Lake Superior Court Judge John Pera, but no hearing date had yet been set on Tuesday.
None of the current and former Library Board members named in the lawsuit or their attorneys contacted for comment Tuesday would speak about the matter.
The Attorney General's office functions as a collection agent for the SBA and other government agencies, and can proceed with the garnishment of wages, the attachment of liens and the seizure of vehicles or other property if the court enters judgments against the defendants.
Last month, Pera relaxed a temporary restraining order freezing Montalvo's assets sought by Zoeller's office to allow the former library director to sell property he owns in order to satisfy the state's claim for $12,379.