IL Atty General hits Chicago lawyer with legal action over alleged mishandling of trust

By Dan Churney | Sep 5, 2015

A longtime Chicago lawyer is in hot water with Illinois Attorney General Lisa Madigan’s Office in connection with questions about his handling of a charitable trust.

The Attorney General’s Office lodged a complaint Aug. 31 in Cook County Circuit Court against Richard C. Moenning, alleging he failed to register a charitable trust with the Attorney General and failed to provide an annual account of the trust for five years. Moenning has been a lawyer in Illinois since 1962; the Illinois Attorney Registration and Disciplinary Commission has disciplinary action pending against his license.

Two elderly sisters set up a trust in 2002, which was amended in 2007 to name Moenning as a successor trustee. One sister died in May 2008 and the other died in September 2010, leaving Moenning the trustee of hundreds of thousands of dollars. As trustee, Moenning was required by law to register the trust with the Attorney General and provide an annual account of the funds. The Attorney General said Moenning not only failed to take those actions, he also did not respond to requests from the Attorney General for an accounting.

The matter came to a head in 2014 when beneficiaries of the trust asked the Attorney General why they had not received distributions from the trust. According to the Attorney General, Moenning learned of these inquiries and in October that year distributed $13,629 to Fourth Presbyterian Church of Chicago and $9,086 to Rehabilitation Institute of Chicago.

In January 2015, after further requests from the Attorney General for an accounting, Moenning disbursed another $351,861 to the church and $234,574 to the Institute. However, because neither the Attorney General nor the beneficiaries have ever been told how much money is or has been in the trust, they do not know whether the payments represent the total owed.

The Attorney General then examined records from three financial institutions, finding that in 93 transactions between October 2008 and December 2014, Moenning received $339,103 from the trust. The Attorney General said that given Moenning’s silence on the subject, she does not know if this money was used for “proper” trust purposes. Further, she doesn’t know if there are other banks holding trust money.

As a result of Moenning’s failure to respond, the Attorney General said the trust is in “need of protection.” To this end, the Attorney General wants a judge to freeze the trust, remove Moenning as trustee and sever any fiduciary relationship he has with the trust, as well as bar him from involvement with any other trust.

The Attorney General further wants Moenning to account for trust monies from May 2008 to the present and to pay a surcharge for any money for which he cannot account, plus interest. If Moenning is found to have wrongfully disbursed more than $1,000 of trust money within a five-year period for personal benefit, he should repay the money, be fined $50,000 per each disbursement and pay punitive damages. Moenning should also open his wallet for the Attorney General’s costs incurred for the investigation and prosecution of the case against him, according to the complaint.

A case management conference is set for Dec. 29.

Want to get notified whenever we write about any of these organizations ?

Sign-up Next time we write about any of these organizations, we'll email you a link to the story. You may edit your settings or unsubscribe at any time.

Organizations in this Story

Illinois Attorney General Richard C. Moenning

More News

The Record Network