EAST CHICAGO | The personal assets of former Library Director Manuel "Manny" Montalvo were frozen Tuesday pending the completion of a state investigation into library expenditures during his five-year tenure.
Indiana Attorney General Greg Zoeller filed the lawsuit in Lake Circuit Court in response to a recent State Board of Accounts audit that suggested Montalvo wrongly collected more than $15,000 from the library in travel, lodging, food and vehicle costs.
Though money for the trips to Puerto Rico, New York City and other destinations, as well as repairs to Montalvo's personal vehicle, were approved by the Library Board of Trustees at the time, the costs are ineligible for reimbursement with public funds, according to Zoeller's lawsuit, and Montalvo is personally responsible for repaying them.
"My office has intervened in this situation to ensure funds will be available to reimburse the taxpayers," Zoeller said. "If an employee submits ineligible travel bills that are wrongly paid out, then that individual is responsible for repaying the public treasury."
Montalvo was fired by library trustees last week, who cited the alleged financial improprieties and his 2010 convictions in Illinois on misdemeanor charges of battery, disorderly conduct and criminal trespass as cause for his termination.
"If I owe the taxpayers of East Chicago any money, I'll be sure to repay every penny of it," Montalvo said late Tuesday when contacted regarding the lawsuit, a court action of which he said he was unaware.
The temporary restraining order granted Tuesday prohibits Montalvo from selling, transferring or concealing any personal assets before a hearing scheduled for March 30 before Lake Superior Court Judge John Pera.
At that hearing, Zoeller said his office will seek an order extending the freeze on Montalvo's assets until a comprehensive state library audit is certified, at which time a civil suit could be filed for recovery of any public money owed through liens on or seizure of property and garnishment of income.
Library Board President Clifton Johnson said Tuesday he appreciates the attorney general's assistance in protecting the taxpayers' investments in support of the East Chicago Public Library.
The action is based on a 2009 state law that allows the State Board of Accounts to provide early notice of possible local government misappropriation so the attorney general can intervene and take legal action to prevent funds from being dissipated while a final audit is ongoing.
The State Board of Accounts completed a preliminary two-year audit of library finances in December, then state auditors returned to East Chicago on March 14 with requests for further examination of records.
The December review suggested that no library business purpose could be determined for Montalvo's trips to Indianapolis; New York City; Madison, Wis.; and San Juan, Puerto Rico; and that he should repay $12,379 to the library.
Examiners also suggested that Montalvo repay the library $2,700 in fuel and vehicle maintenance costs paid him in addition to the $600 per month already provided for those expenses in the employment contract for library director.
Assets listed in the lawsuit for Montalvo, who serves as secretary for the Lake County Democratic Party organization, include his home in the city's Roxana neighborhood, his bank accounts, retirement plan account and six vehicles.