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Anita Alvarez
Cook County State's Attorney
Communications Department
Chicago, IL 60602
(312) 603-3423
saomedia@cookcountygov.com

FOR IMMEDIATE RELEASE:
November 20, 2009

A veteran Chicago Police Sergeant who serves as President of the sergeant’s union was arrested Friday morning and is facing multiple felony charges for allegedly embezzling hundreds of thousands of dollars from union funds, Cook County State’s Attorney Anita Alvarez and Chicago Police Superintendent Jody Weis announced today.

Sergeant John J. Pallohusky, 53, who serves as President of the Chicago Police Sergeant’s Association, has been initially charged with theft in excess of $100,000 (a Class One Non-probationable felony) and money laundering (a Class Three felony) in connection with the investigation.  The investigation uncovered that Pallohusky embezzled in excess of an estimated $600,000 from the Sergeant’s Association over the course of the last several years.

According to prosecutors, Pallohusky engaged in a scheme in which he would steal the funds by making withdrawals and writing checks from the police sergeant’s bank account and making them payable to himself.  Pallohusky would then launder the proceeds of the thefts through his personal credit card and bank accounts and use the funds for personal purposes unrelated to the legitimate business of the Chicago Police Sergeant’s Union, according to court documents.

According to investigators, Pallohusky used the money to make lavish purchases of goods and services for his personal use, including frequent gambling trips to Las Vegas, the purchase of a home in Chicago’s Sauganash neighborhood, an Ameritrade account, and frequent stays at downtown Chicago hotels and dinners at Loop steakhouses and restaurants.

“Any theft by a member of law enforcement is appalling and something that we will prosecute to the fullest extent of the law,” State’s Attorney Alvarez said.  “But the fact that this officer was essentially stealing from his fellow police sergeants makes this crime even more shocking and deplorable.”

“Integrity is the cornerstone core value of the Chicago Police Department,” added Superintendent Weis.  “Our officers are committed to the highest standards of honesty and ethical conduct, and at all times are held to this bright line standard.  There is no grey area here.”

The investigation into the thefts began last month after the Chicago Police Department’s Internal Affairs Division was alerted to potential illegal financial activity involving Pallohusky.  The investigation was conducted jointly by the Chicago Police Department’s Internal Affairs Division and the State’s Attorney’s Special Prosecutions Bureau.

Pallohusky was arrested this morning on a no-bail arrest warrant by Chicago Police and State’s Attorney investigators at a home on the city’s northwest side.  Authorities have moved to seize the funds from 12 of Pallohusky’s bank accounts, the funds in two Ameritrade trading accounts as well as two Chicago homes and an automobile.

At the time of his arrest, Pallohusky was assigned to the Area 4 Violent Crimes Division.  He joined the Chicago Police Department in 1988 and was promoted to sergeant in 2000.  Pallohusky is the elected President of the Chicago Police Sergeant’s Association, which acts as a fraternal organization and a labor union.  The membership is comprised of active, inactive and retired Chicago police sergeants.  Active members of the association pay $50 per month in union dues.

The investigation remains ongoing.

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