A report from the Palos Heights Police Department outlines an investigation into the City’s Building Department regarding the possible theft of cash collected from building fees.
The alleged missing money came to light after a Palos Heights official noticed a $2,000 discrepancy in the recording of fees collected from a homeowner on June 20 and approached police, according to the report obtained by Palos Patch.
Building Commissioner James Dougherty, who headed the department, was questioned by Palos Heights police and Cook County State's Attorney's investigators on July 27 regarding several cash transactions made with the department since January that allegedly had gone unrecorded, according to the report. Among other things, the report states Dougherty was asked about his relationship with department secretary Lisa Kean, who is also a part of the police investigation, and about prior criminal arrests, including a 2005 arrest in Downers Grove.
Both Dougherty and Kean were terminated from their positions with the City of Palos Heights earlier this month.
Mayor Bob Straz has declined to comment on specifics around the firings but has said there was “mismanagment, overall” in the department.
Attempts to reach Dougherty for comment through phone numbers listed with his Bolingbrook address were unsuccessful Monday afternoon. Neither he nor Kean have been charged in connection with the current Palos Heights investigation.
Cook County Assistant State’s Attorney Dave Coleman told Dougherty during the interview that he believed the building commissioner was keeping unreported cash collected from fines, according to the report. Dougherty denied the accusations and said he never handled cash or issued receipts in his time as head of the department.
The report outlines a transaction on June 20, where a Ridgeland Avenue homeowner paid $2,345 in cash for permit fees and building fines to City Building Inspector William Hayes, according to the report. The money was counted twice, first by Hayes and then by Kean, before a receipt was issued to the homeowner. The following day, the report states, Hayes noticed a file for the homeowner on Dougherty's desk with an unknown amount of cash inside. On that Friday, Hayes discovered a cash transaction of $345 had been recorded in the department's accounting program.
Dougherty denied ever seeing the receipt when questioned about it by Palos Heights police and representatives from the Cook County State's Attorney's Office on July 27. He also said he did not have any knowledge of cash being placed on his desk. In his time as building commissioner, Dougherty told investigators, he had never handled any cash and was only familiar with the department's accounting software.
When asked why there was no record of the $2,000 payment, Dougherty said "You'd have to ask Lisa (Kean)."
Investigators also presented Dougherty with a receipt dated Jan. 5 obtained from United States Alliance Fire Protection which showed fines levied by the building department totaling $700 that were paid in cash. According to the report, building department accounting records did not show receipt of the payment. Dougherty said he had no knowledge of this transaction either.
A third receipt found by investigators in City Hall records showed a $100 credit card payment from "Midwest Country" dated May 23, according to the report. A receipt found in building department records from Midwest County, also dated May 23, included a line that reads "Fines Code $325.00" and the handwritten note "cash" written below it—both of which are missing from the receipt found in City Hall records.
Kean later told investigators that she deleted the line "Fines Code $325.00" at the Dougherty's direction, the report states.
Investigators also questioned Dougherty about prior run-ins with the law, including a Downers Grove arrest from 2005 on a charge of retail theft and a 1974 arrest in Minnesota, during which Dougherty was accused of forging a check to the First National Bank of Minneapolis, according to the report.
Dougherty was also asked about his relationship with Kean and about what the reports states were emails "sent back and forth between the two parties regarding Dougherty's genitals" on July 17. The email exchange allegedly took place using Kean's personal email account and Dougherty's City of Palos Heights email address. Dougherty said the emails were a joke, according to the report, and that his relationship with Kean was entirely professional.
Kean, who interviewed separately, said she had altered receipts on Dougherty's instruction and was "concerned" about building department activities she was told to do or watch, according to the report.
While being interviewed, police searched Dougherty's office and found half-empty 750 ml bottle of Bailey's Original Irish Cream and a mostly full cup of Starbucks coffee, according to the report. The coffee cup was tested and came back positive for the presence of alcohol.
Dougherty had been the City's building commissioner for six years.