Class action claims Clinton County investor embezzled funds

Kelly Holleran Jan. 19, 2010, 10:00am

A man and his wife have filed a putative class action lawsuit, claiming they were victims of a Clinton County man's embezzlement scheme in which he allegedly collected more than $2 million.

James C. and Eileen L. McKay claim defendant Lavern Huelsmann doing business as Senior Retirement Services approached them on Aug. 17, 2009, at their home in Caseyville about investing $139,000 in Senior Retirement Services. Senior Retirement Services maintained an account at defendant FCB New Baden Bank.

The McKays decided to invest their money with Huelsmann after he assured them the cash management account was safe, government insured and guaranteed to provide at least 12 percent in annual interest, the complaint says. At the time of the investment, the McKays claim Huelsmann told them they would not be able to withdraw any money from the account for the first three to four years.

When he approached the McKays, Huelsmann worked as a certified life insurance agent and sold life insurance annuities with the Midland National Life Insurance Company. Little did the McKays know, but in 2006, Huelsmann also began encouraging elderly residents in St. Clair County to invest in fraudulent notes and accounts he maintained at defendants FCB New Baden Bank, Germantown Trust and Savings Bank, Tempo Bank, Centrue Bank and Scottrade, Inc., according to the complaint filed Jan. 6 in St. Clair County Circuit Court.

When Huelsmann approached the McKays about investing money into Senior Retirement Services, he actually planned to comingle their funds with other money he had embezzled and obtain the cash for his own use, the suit states.

The McKays claim the banks should have caught on to Huelsmann's embezzlement, but never even filed a "Suspicious Activity Report."

"FCB New Baden Bank, Germantown Trust and Savings Bank, Tempo Bank, Centrue Bank and/or Scottrade Inc. never investigated whether either Lavern Huelsmann or Senior Retirement Services was ever licensed by any Federal or state of Illinois entity to offer or sell securities such as the money kept in a constructive trust at its bank," the suit states.

As a result of the banks' and Huelsmann's actions, the McKays lost the $139,000 they invested, according to the complaint.

The McKays say they are not the only ones affected, and claim a class action lawsuit is the only way to recover money due to numerous people.

"Plaintiffs and their attorneys believe that at least 40 – 100 person, entities, or estates are missing over $2,000,000.00 in investment monies," the suit states.

In their four-count suit, the McKays allege violation of the Illinois Consumer Fraud Act, negligence and acting in concert with Huelsmann to convert funds against FDC Bank.

The McKays and the putative class are seeking a judgment of more than $50,000 in compensable damages and money damages of more than $100,000, plus treble damages, attorneys' fees and other relief the court deems just. In addition, the McKays are asking the court to certify the complaint as a class action lawsuit.

The plaintiffs will be represented by Bernard J. Ysursa of Cook, Ysursa, Bartholomew, Brauer and Shevlin in Belleville and by Michael S. Williams of Belleville.

St. Clair County Circuit Court case number: 10-L-04.

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