Sergeant accused of stealing more than $600,000

November 20, 2009 9:22 PM |  UPDATED STORY

The head of the Chicago police sergeants' union was charged with looting union dues to pay for steak dinners, gambling trips to Las Vegas and a second residence in the city's Sauganash neighborhood.

Sgt. John  Pallohusky, a 21-year veteran assigned to the detective division, was arrested at his Northwest Side home early Friday on felony theft and money-laundering charges for allegedly embezzling  about $600,000 over the last several years.

"This case makes this a very difficult day for all of us in law enforcement," said State's Attorney Anita Alvarez.

Pallohusky, 53, is accused of writing checks from the Chicago Police Sergeants' Association to himself and depositing them into his personal accounts. He is also accused of using  association credit cards for  personal use.

 The union funds were built by the $25 each member pays per pay period, according to the complaint. Some $765,000 in dues is collected each year from the 1,200 members of the union.

"We will do everything possible to recover these funds," said Police Superintendent Jody Weis, who noted that the investigation continues.

Union officials said they were cooperating with the investigation and that the organization is "fiscally sound." Edward  Maloney, the union's general counsel, said the board of directors will run the union's day-to-day operations. The board "is deeply upset by the charges," he said.

Attorney Robert Kuzas, who is representing Pallohusky, denied wrongdoing. "I don't believe he misappropriated one penny of the union's money," he said.

The Police Department's Internal Affairs Division opened an investigation after Chase Bank noticed in August that Pallohusky had deposited tens of thousands of dollars into a personal account from a union credit card account, authorities said.

Prosecutors moved to seize Pallohusky's two homes and more than a dozen bank and brokerage accounts. In a recent 12-month period,  Pallohusky used $75,000 in stolen funds on dinners in Loop steakhouses and restaurants, the charges alleged. 

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