37 workers at state-run developmental center targeted in PPP fraud probe
MOLLY PARKER
Capitol News Illinois
mparker@capitolnewsillinois.com
At Ludeman Developmental Center in Park Forest, 37 employees have been fired, resigned or face pending disciplinary action after a state watchdog found that they defrauded a federal pandemic-era small business loan program.
The employees who work at the state-run developmental center in south suburban Cook County include 32 mental health technicians – about 6 percent of frontline workers with that job – three residential services supervisors, one habilitation program coordinator and a licensed practical nurse.
A spokesperson for the Illinois Department of Human Services, the agency that runs the 383-bed residential center for people with intellectual and developmental disabilities, confirmed these additional details late last week.
Neil Olson, the general counsel for the Illinois Office of the Executive Inspector General, previously confirmed to Capitol News Illinois that dozens of employees of state agencies and other entities under the OEIG’s jurisdiction are the subjects of an ongoing investigation into whether they fraudulently obtained Paycheck Protection Program loans. Beyond confirming the investigation, Olson declined to provide any additional details about the probe.
The U.S. Small Business Administration loans were intended to help small businesses remain open and their employees paid as COVID-19 forced mass shutdowns to protect public health. But in a rush to disburse the funds, fraudsters across the country stole billions of dollars meant to prop up mom-and-pop shops, a federal watchdog report found last month. The inspector general for the SBA estimated that the agency paid out more than $200 billion in “potentially fraudulent” aid during the pandemic – about 17 percent of the $1.2 trillion that was dispersed through the PPP and other similar programs.
The employees facing discipline sought loans for small businesses outside of their state work. But those businesses may not have existed, or if they did, may not have earned the income they claimed. The state workers who have faced disciplinary action to date received loans of at least $20,000. To receive that amount meant they claimed income in their second jobs of at least $100,000 on their PPP loan applications.
While state employees are not prohibited from secondary employment, state policies require employees to disclose outside work to the agencies that employ them. Certain state workers, such as managers and people who are responsible for procurement and other financial dealings, must also file statements of economic interest with the secretary of state’s office that would detail any outside business ownership or income.
The investigations center around whether the workers filed fraudulent paperwork to obtain the loans, thereby acting in a way “unbecoming of a state employee,” or failed to follow disclosure rules for secondary income – or both. State employees who took PPP loans for legitimate businesses that were properly disclosed would not face discipline.
IDHS is not the only Illinois government agency whose workers may face disciplinary action up to termination. But the loss of employees at the state’s developmental centers is particularly troubling given longstanding challenges to maintain an adequate workforce and provide care to some of the state’s most vulnerable citizens.
In total, IDHS confirmed that, as of early August, 47 of its workers had been fired, resigned or face pending discipline related to PPP loan fraud. The other 10 employees – five each – were employed at Kiley Developmental Center in Waukegan on the Wisconsin border and Shapiro Developmental Center in Kankakee, in north-central Illinois.
A July investigation by Capitol News Illinois, Lee Enterprises and ProPublica detailed numerous instances of patient abuse and neglect inside IDHS’ seven statewide centers, including some circumstances that contributed to serious resident harm or death.
In prior statements, IDHS has attributed some of the problems at its centers to staffing shortages, while noting that workforce challenges in health care are a nationwide problem.
AFSCME Council 31, the union that represents most workers at Ludeman, has also publicly shared concerns about staffing issues at the state’s 24/7 facilities, including developmental centers. In April, the union shared a report to its website specifically calling attention to concerns among workers at Ludeman. In the piece, a Ludeman employee says workers are sometimes asked to work multiple double or triple shifts in a week, leading to burnout and safety issues.
Anders Lindall, the spokesperson for AFSCME, did not respond to specific questions about the OEIG’s widespread investigation into PPP loan fraud by state employees. “In any investigation that may lead to discipline, the union’s role is to ensure that members are treated fairly, the contract is followed and due process is upheld,” he said.
Previously, IDHS spokesperson Patrick Laughlin said in a statement that the agency takes OEIG’s findings seriously.
“Falsifying a federal loan document, for significant and improper personal gain, calls into question one’s character, honesty, and ability to act ethically,” the prior statement read. “While the vast majority of IDHS’ roughly 14,000 state employees are hard-working people of strong character who work tirelessly to help the most vulnerable, it is deeply concerning anytime an employee takes advantage of public programs.”
In response to questions about how the loss of employees at Ludeman is affecting overall workforce shortages, Laughlin said in a new statement that the agency has been working to hire more staff at Ludeman since receiving notice of the PPP loan fraud among the center’s workers. Because it is located in Cook County, the facility traditionally has a lower vacancy rate and larger applicant pool than the other centers located in rural areas and small towns, the agency added.
The OEIG is not a criminal law enforcement agency. It investigates state employees and others under its jurisdiction for misconduct and makes recommendations that could range from retraining to termination. But the OEIG has the authority to share its findings with law enforcement.
On June 30, Gov. JB Pritzker signed a bill into law that extends from five to 10 years the statute of limitations in Illinois to bring charges against people who fraudulently obtained pandemic-era aid, such as PPP loans and unemployment benefits.
Pritzker’s office did not respond to detailed questions about the scope of the investigation into fraudulent PPP loans obtained by state workers. “We do not provide comment on investigative and disciplinary matters as they proceed through the appropriate processes,” the governor’s office said in a statement.
With respect to the new law, a spokesperson said that “the governor supports holding bad actors who took advantage of an unprecedented crisis accountable. It’s important that authorities have more time to investigate these crimes and prosecute those who violated the law.”
Capitol News Illinois is a nonprofit, nonpartisan news service covering state government. It is distributed to hundreds of print and broadcast outlets statewide. It is funded primarily by the Illinois Press Foundation and the Robert R. McCormick Foundation, along with major contributions from the Illinois Broadcasters Foundation and Southern Illinois Editorial Association.
Local News
Starbucks opens on former vacant lot in West Lawn
A new Starbucks opened last week in Chicago’s West Lawn community on a lot that had been vacant for 40 years. Groundbreaking for the newest Starbucks took place in March at 6413 S. Cicero Ave. and was led by Mayor Brandon Johnson and 13th Ward Ald. Marty Quinn. The lot was a former gas station…
Comings & Goings: Fogo de Chao coming to Orland Park
Fogo de Chao, the Brazilian steak house known for servers carrying slabs of meat on long skewers from table to table, announced last week that it had signed a lease to open a new restaurant in Orland Park. The new location at 15407 S. LaGrange Road would be the chain’s fifth Chicagoland restaurant. The 6,791-square-foot…
Women’s social group launches voting initiative in Summit
A group of women from Summit called Nubian 9, better known as N9, are stepping up to ensure their community’s voice is heard at the ballot box. The social group of nine long-time childhood friends from the Summit-Argo community is committed to fostering sisterhood, social impact and sensational living (living life to the fullest). In…
Lyons Township Assessor outreach event in Summit recovers $36,000 for taxpayers
An outreach event sponsored by the Lyons Township Assessor’s office at the Summit Park District recovered more than $36,000 for taxpayers. Nearly 200 Summit residents concerned about the recent jump in Cook County assessments attended the August 29 outreach. Assessor Patrick Hynes gave a brief presentation about the local property tax landscape, the recent reassessment, and tips…
Local physician surpasses 500th robotic surgery at Northwestern Medicine Palos Hospital
Northwestern Medicine Palos Heights Hospital is celebrating an exciting milestone for one of its surgeons. Dr. Samer Rajjoub, a surgeon at Palos Hospital, recently celebrated his 500th robotic surgery with state-of-the-art da Vinci robots that allow surgeons to perform complex minimally invasive procedures with more precision, often leading to less pain for the patient post-surgery…
Lyons High School junior shines in pageantry, animal advocacy
Sophia Aviles, a junior at Lyons Township High School, earned a national honor that propels her closer to realizing her dreams in pageantry, fashion modeling and animal welfare advocacy. The 16-year-old from La Grange Park enjoys photography, reading in the park, and volunteering at a local veterinary clinic. Recently, she placed as the second runner-up…
A Symphony of Dreams: Sisters open music school in Palos Hills
Two sisters are aiming to bring the power of music to the southwest suburbs. Kasia Szczech-Dlugosz and her younger sister, Karolina Szczech, opened the Magical Keys Institute of Music at 7840 W. 103rd St., Palos Hills, about three weeks ago. They celebrated with a grand opening on Thursday, Sept. 26, to greet the community and…
Palos East Elementary named National Blue Ribbon School
Palos East Elementary School in Palos Consolidated School District 118 has been named a National Blue Ribbon School award winner by the U.S. Department of Education. U.S. Secretary of Education, Miguel Cardona, made the announcement on September 23 that Palos East Elementary has been named a 2024 National Blue Ribbon School. Schools are nominated by…
Pekau formally announces re-election bid and names slate
Even though he announced his intentions of running for another term in 2023, Orland Park Mayor Keith Pekau made a formal announcement on Sept. 30. He also announced his slate of trustees and clerk for the April 1 election at a dinner following his golf outing for veterans at Silver Lake Country Club. Current trustees…
Neighbors
Starbucks opens on former vacant lot in West Lawn
A new Starbucks opened last week in Chicago’s West Lawn community on a lot that had been vacant for 40 years. Groundbreaking for the newest Starbucks took place in March at 6413 S. Cicero Ave. and was led by Mayor Brandon Johnson and 13th Ward Ald. Marty Quinn. The lot was a former gas station…
Comings & Goings: Fogo de Chao coming to Orland Park
Fogo de Chao, the Brazilian steak house known for servers carrying slabs of meat on long skewers from table to table, announced last week that it had signed a lease to open a new restaurant in Orland Park. The new location at 15407 S. LaGrange Road would be the chain’s fifth Chicagoland restaurant. The 6,791-square-foot…
Women’s social group launches voting initiative in Summit
A group of women from Summit called Nubian 9, better known as N9, are stepping up to ensure their community’s voice is heard at the ballot box. The social group of nine long-time childhood friends from the Summit-Argo community is committed to fostering sisterhood, social impact and sensational living (living life to the fullest). In…
Lyons Township Assessor outreach event in Summit recovers $36,000 for taxpayers
An outreach event sponsored by the Lyons Township Assessor’s office at the Summit Park District recovered more than $36,000 for taxpayers. Nearly 200 Summit residents concerned about the recent jump in Cook County assessments attended the August 29 outreach. Assessor Patrick Hynes gave a brief presentation about the local property tax landscape, the recent reassessment, and tips…
Local physician surpasses 500th robotic surgery at Northwestern Medicine Palos Hospital
Northwestern Medicine Palos Heights Hospital is celebrating an exciting milestone for one of its surgeons. Dr. Samer Rajjoub, a surgeon at Palos Hospital, recently celebrated his 500th robotic surgery with state-of-the-art da Vinci robots that allow surgeons to perform complex minimally invasive procedures with more precision, often leading to less pain for the patient post-surgery…
Lyons High School junior shines in pageantry, animal advocacy
Sophia Aviles, a junior at Lyons Township High School, earned a national honor that propels her closer to realizing her dreams in pageantry, fashion modeling and animal welfare advocacy. The 16-year-old from La Grange Park enjoys photography, reading in the park, and volunteering at a local veterinary clinic. Recently, she placed as the second runner-up…
A Symphony of Dreams: Sisters open music school in Palos Hills
Two sisters are aiming to bring the power of music to the southwest suburbs. Kasia Szczech-Dlugosz and her younger sister, Karolina Szczech, opened the Magical Keys Institute of Music at 7840 W. 103rd St., Palos Hills, about three weeks ago. They celebrated with a grand opening on Thursday, Sept. 26, to greet the community and…
Palos East Elementary named National Blue Ribbon School
Palos East Elementary School in Palos Consolidated School District 118 has been named a National Blue Ribbon School award winner by the U.S. Department of Education. U.S. Secretary of Education, Miguel Cardona, made the announcement on September 23 that Palos East Elementary has been named a 2024 National Blue Ribbon School. Schools are nominated by…
Pekau formally announces re-election bid and names slate
Even though he announced his intentions of running for another term in 2023, Orland Park Mayor Keith Pekau made a formal announcement on Sept. 30. He also announced his slate of trustees and clerk for the April 1 election at a dinner following his golf outing for veterans at Silver Lake Country Club. Current trustees…