Insurer files amended complaint against ex-WTVP execs

The Cincinnati Insurance Co. on  Dec. 29 filed an amended complaint against two former WTVP-TV executives, changing the specific allegations against Linda McLaughlin and the late Lesley Matuszak.

In a suit filed last March, the insurer is seeking to recover the $250,000 the company paid the TV station as part of WTVP’s claim of financial losses between 2019 and 2023. WTVP’s insurance policy provided coverage for employee theft, fraud and embezzlement, the insurance company said.

Matuszak, WTVP’s former Chief Executive Officer, died shortly after WTVP’s board questioned spending. She’s accused of having improperly taken station funds for personal use (“conversion”) and theft of WTVP funds (“unjust enrichment”). Matuszak’s estate is the named defendant; no response has been filed on the estate’s behalf. McLaughlin, WTVP’s ex-Director of Finance and Human Resources, resigned the week the board announced “questionable, unauthorized, or improper” spending.

In November, Judge Timothy Cusack granted a defense motion to dismiss the suit because it lack specificity but gave the insurer time to amend its initial complaint.

The amended complaint seems to link McLaughlin’s responsibilities with the financial loss, which the station said totaled more than $870,000. A Peoria police investigation said embezzlement occurred and found probable cause to charge Matuszak, but declined to file charges since she was dead. Although implicated, McLaughlin never faced charges and “probable cause has not been reached for her arrest, unless she is able to be communicated with,” police reported. Police declined to comment further.

Concerning McLaughlin, the complaint now accuses the former Director of Finance of negligence and breach of her fiduciary duty “by virtue of her position. McLaughlin owed WTVP a duty to exercise reasonable care in the management, oversight and protection of WTVP's financial assets, accounts, credit cards, and internal financial controls.

The new complaint asserts, “McLaughlin further owed WTVP a duty to act reasonably in monitoring company credit card usage, bank accounts, lines of credit, investment accounts, and financial reporting, and to prevent unauthorized or improper use of company funds.

“McLaughlin was negligent and breached her duties in the following ways,” it continues. She failed “to properly monitor and review company credit card statements and transactions [and]  to ensure that credit card charges were supported by proper receipts and approvals; allowed unauthorized and improper personal expenditures to be charged to WTVP accounts; failed to properly monitor and audit and prevent the dishonest and fraudulent activity; to timely report irregular, excessive and/or suspicious financial transactions; to properly perform her duties and responsibilities as the Director of Finance, thereby allowing the misuse and loss of funds; to implement and/or follow reasonable internal controls designed to safeguard WTVP's funds; to properly perform her duties and responsibilities as the Director of Human Resources, and to properly supervise and oversee the officers and employees; and was otherwise negligent in the performance of her duties and responsibilities as the Director of Finance and Human Resources.

“As a direct and proximate result of McLaughlin's negligence, WTVP suffered a substantial financial loss in the amount of $375,017.29 [and] as a direct and proximate result of McLaughlin's negligence, Cincinnati Insurance paid $250,000.00 to WTVP pursuant to its insurance policy as reimbursement for a portion of the loss.”

McLaughlin’s attorney, Philip O’Donnell of Peoria, had not filed a response to the amended complaint as of press time. Judge Cusack gave the defense until Jan. 30 to file an answer.

The next appearance is a case management conference on March 13.