LaSalle Bank claims fraud by INS Integrated Security Solutions
CHICAGO--LaSalle Bank, which operates roughly 150 branches here in the Chicago area, has sued its recently fired security director and security system integrator, claiming a conspiracy to defraud the bank of as much as $42 million.
According to a statement released by LaSalle, their only communication with the media on this matter, "George Konjuch, 53, of Des Plaines, is suspected of participating in a scheme to defraud the bank by causing it to pay false invoices for services that either were not provided or were worth far less than the amounts invoiced. The alleged scheme also involves Navarrete Industries, Inc., a supplier of security systems to the bank."
Navarrete Industries is the parent company of the security firm INS Integrated Security Solutions, headed by president Armando Navarrete, and headquartered in Wood Dale, Ill. The lawsuit alleges that for agreeing to invoice INS for services not rendered, Konjuch received kickback payments for as much as $175,300.
On September 11, LaSalle was granted an injunction to freeze the assets of INS and of the Navarretes, themselves. After 10 days, the Navarretes were able to reach an agreement where $350,000 is available to keep their business in operation and to keep their personal finances in order.
Patrick Deady, a lawyer with Hogan Marren who is representing INS separately from the Navarretes, said that LaSalle's tone would indicate "this was a horrific thing" committed by INS, "but, as I indicated on the record on Friday, this is a company that had a seven-year contract to provide these services, on a monthly basis worth around $650,000, for 120 to 150 branches and around 150 ATMs. Yet I've got LaSalle claiming that they think this is a dummy corporation or something ... I've got a signed contract. Signed on in October of 2004 for seven years."
Deady plans to argue at the next hearing, Oct. 10, that this is merely a contract dispute, and "we don't think there's any reason for injunctive relief."
As was reported in Security Systems News in December of 2005, INS has been operating in the Chicago area for 35 years, opening as Illinois National Safe and moving to the CCTV and access control market in 1993. In early 2005, INS relocated to the Wood Dale facility, with 25,000 square feet of office space, which includes a new 5,000-square-foot UL-listed monitoring center.
"This is a viable company," reiterated Deady, "there's 56 employees, with 20 union electricians."
"For two years now," he continued, "this company has been paid every month. And they have routinely done work at branches. It's not like it's some kind of new company that overnight starts getting paid. That's what the lawsuit is going to revolve around: What were the internal procedures at LaSalle ... [The security systems have] been monitored, maintained, repaired--there's going to be a ton of records showing that installers and repairmen for the company routinely visited these branches for work that was either approved by or overseen by branch managers."
See upcoming issues of Security Systems News for more on this story.