A Trenton man may have to pay more than $50,000 to elderly investors who say he bamboozled them out of more than $750,000 in a Ponzi scheme.
Eight Illinois residents filed suit Feb. 22 in St. Clair County Circuit Court against Lavern Huelsmann doing business as Senior Retirement Services and the four banks where he allegedly invested their money.
The investors say Huelsmann began encouraging them in 2006 to invest into his fraudulent and false promissory notes and cash management accounts in banks in Clinton and St. Clair counties.
Entranced by the offer of lucrative returns, plaintiffs James and Eileen McKay invested $139,000 with Huelsmann while Dolores Ann Richardson placed $245,000, Brenda J. Hampton and Maynard L. Hampton invested $48,000 and Veda DuClos invested $103,000, according to the complaint.
However, a few years later, the plaintiffs lost their money when they discovered Huelsmann was operating a Ponzi scheme, the suit states.
Since then, Huelsmann has been tried in court, where prosecutors say he used the money to pay for his personal expenses, gambling, his own investments and to "build, decorate and accessorize" his house.,
Huelsmann pleaded guilty to one count of mail fraud and one count of money laundering and was sentenced to 87 months in federal prison. A judge has also ordered him to repay his investors.
Still, the eight plaintiffs want to see further punishment doled out against Huelsmann and against the banks where he invested the money.
In addition to Huelsmann, the defendants name FCB New Baden Bank, Germantown Trust and Savings Bank, Tempo Bank and Centrue Bank as defendants, saying they could have done more to prevent the plaintiffs from losing money.
For instance, the banks should have been aware of suspicious activity and should have filed a report on Huelsmann, according to the complaint. In addition, the financial institutions allegedly failed to advise the plaintiffs that Huelsmann was withdrawing funds from their trust funds for his personal use and breached their fiduciary duty to the plaintiffs, the suit states.
"That the aforementioned actions on the part of defendant Banks done at the request of Lavern Huelsmann and Senior Retirement Services entity, gave substantial assistance to Lavern Huelsmann and the Senior Retirement Services entity in allowing them ultimately to gain unfettered access to plaintiffs' funds, which allowed him to steal/convert same for his own personal use," the complaint says.
In their three-count complaint, the plaintiffs seek damages of more than $150,000, plus unspecified punitive damages, attorneys' fees, costs, interest and other relief the court deems just.
Bernard J. Ysursa of Cook, Ysursa, Bartholomew, Brauer and Shevlin in Belleville; Thomas R. Ysursa of Becker, Paulson, Hoerner and Thompson in Belleville; and Michael S. Williams of Belleville will be representing them.
St. Clair County Circuit Court case number: 11-L-89.