Former WTVP exec seeks lawsuit’s dismissal

On Aug. 22, Judge Timothy Cusack is scheduled to preside over the initial appearance in the lawsuit against former WTVP Finance Director Linda McLaughlin and the estate of the late Lesley Matuszak, the former WTVP CEO, and Cusack is expected to hear arguments by McLaughlin’s lawyer to dismiss the case.

The Cincinnati Insurance Co. in March sued to recover money it paid WTVP for the station’s claim of losing hundreds of thousands of dollars the Peoria Police describe as embezzlement.

Representing McLaughlin, Peoria attorney Philip O’Donnel, in his April motion to dismiss, said the insurer’s claim is “seriously lacking in identified, concrete factual allegations.”

Between 2019 and 2023 police said WTVP funds were misspent through use of the station’s credit card, getting $100,000 from WTVP’s line of credit at PNC, and liquidating $320,000 from the station’s investment holdings. WTVP’s board of directors in 2023 questioned some spending; Matuszak committed suicide and McLaughlin resigned. The two, who’d worked together in similar roles at the Boys and Girls Clubs of Greater Peoria, were never charged. The Peoria Police Department investigation said there was probable cause to charge Matuszak, but she was dead, and “probable cause has not been reached for [McLaughlin’s] arrest, unless she is able to be communicated with,” and police department declined to comment further.

Later, WTVP reported a total loss of more than $870,000.

Among O’Donnel’s arguments to dismiss the suit is that neither the insurer nor WTVP itself “demanded” the return of property police say was improperly taken. Also, McLaughlin’s lawyer said the suit has no foundation to support the assertion that McLaughlin used funds “for her own personal use and enjoyment,” no proof she “willfully misrepresented the financial condition of WTVP,” and no evidence there was a conspiracy between her as Finance Director and Matuszak as CEO.

“Plaintiff appears to make Linda the scapegoat.”

In Cincinnati Insurance’s response, attorney Stuart Brody of Chicago said that no such demand to return misappropriated funds is required under Illinois law, and “the absence of a precise allocation of damages between the two defendants is not a pleading defect,” Brody said, “it reflects the reality that McLaughlin and Matuszak acted in concert.

“These allegations are not mere conclusions, but a concrete narrative supported by facts that satisfies Illinois’ fact-pleading standards.”

Further, Brody said, “The plaintiff is not required to prove their case at the pleading stage. They need only allege sufficient facts addressing each element of a particular claim. All that is required at the pleading stage is that the plaintiff allege facts showing the defendant’s involvement in the wrongful control of the property.”

Proof of McLaughlin’s intent is reserved for trial, Brody continued.

“Plaintiff asserts the fact that McLaughlin knew of the falsities,” he wrote. “Whether or not she actually knew is a matter for trial.”

McLaughlin’s position at WTVP carried responsibilities, Brody added.

“As WTVP’s head of the Finance Office, she directly owed the duty to honestly perform her job,” he said. “In her capacity as head of the HR Department and the Finance Office, she is the person who made misrepresentations to the Board. McLaughlin knowingly presented false financial information to the Board, provided misleading financial statements during board meetings, and falsely certified the accuracy of board meeting minutes and financial documents when in fact said document concealed her fraudulent misappropriation of company funds.”

As to the issue of conspiracy, Brody said the standard for pleading affirmed by the Illinois Supreme Court is that civil conspiracy consists of “a combination of two or more persons for the purpose of accomplishing, by some concerted action, either an unlawful purpose or a lawful purpose by unlawful means.”

Brody said, “At some point in 2019, Matuszak and McLaughlin reached an agreement to carry out fraud. This concerted effort continued until … 2023.”

Brody is seeking denial of the motion to dismiss “so the parties can move forward with written discovery.”

At deadline, there has been no response from attorneys representing the Estate of Lesley Matuszak.