Duraco case referred to U.S. attorney's office
A federal judge on Tuesday dismissed a motion filed last week by attorneys representing former workers at Duraco Products Inc. who allege they weren't paid by the owners of the Streamwood factory.
The motion claimed owner Kevin P. Lynch misled the court and committed perjury through paperwork filed in November 2008 when Duraco, which produced gardening supplies off Lake Street, filed for bankruptcy. The workers alleged Lynch lied about paying the factory workers.
Bankruptcy Judge Eugene R. Wedoff said Tuesday that he had no jurisdiction over criminal matters and would refer the perjury allegations to the U.S. attorney's office.
The 34 ex-employees said Lynch owes them $350,000 in back wages and damages. The owners filed for Chapter 11 bankruptcy last year and the factory shut down in February after Wedoff changed the filing to a Chapter 7 bankruptcy.
There's also a civil lawsuit filed against Lynch and his brother, Michael Lynch, by the Working Hands Legal Clinic in Chicago, which represents the 34 ex-employees who want more than $350,000 in wages and damages. The next chapter in the seemingly lengthy court battle is a July 7 court appearance.
Lynch's attorney Gregory J. Jordan praised the ruling and stood by his clients' innocence.
"I remain confident Kevin Lynch will be exonerated," Jordan said after the court proceedings.
The ex-Duraco workers also claimed victory. They said the referral to the U.S. Attorney would bring further scrutiny on Lynch and could reveal wrongdoing. The ex-workers said they hope to inspire employees in similar situations to come forward and file their own lawsuits.
"It was short, but sweet," said Leone Jose Bicchieri, executive director of the Chicago Worker's Collaborative, which helped organize the workers.
The attorneys for the workers looked through bank records and submitted copies of checks supposedly signed by Lynch totaling to about $350,000. The checks were made out to Michael Lynch's wife, Kimberlee, the Lynch brothers, and in some cases, cash.
"She was never even there," former Duraco worker Jesenya Rodriguez said of Kimberlee Lynch.
Michael Lynch has repeatedly said he and his brother didn't take a salary during the bankruptcy process, something his attorney reiterated.
Meanwhile, Michael Lynch sent out a statement last week blaming the factory's bank, Franklin Capital Network, for the factory's financial woes. Lynch claimed Franklin couldn't account for $6 million from Duraco's bankruptcy estate.
Gary Edidin of Franklin Capital said his firm, based in Highland Park, did the work agreed upon as stipulated in a signed contract. His attorney, Scott Schrieber, called Lynch's claims "profoundly incorrect."
Attorney Christopher J. Williams, who represents the ex-Duraco workers, said regardless of whether Franklin Capital committed any wrongdoing, it should have had no impact on the fact that the workers didn't get paid.