Insurance to pay Schaumburg $130,000 for settling lawsuits against ex-cops

  • Former Schaumburg police officers Matthew Hudak, left, and Terrance O'Brien.

    Former Schaumburg police officers Matthew Hudak, left, and Terrance O'Brien.

Updated 5/24/2018 3:57 PM

Schaumburg's insurance company will pay the village $130,000 for its settlements in two of 17 lawsuits alleging false arrest, illegal search or malicious prosecution by former police officers charged in 2013 with multiple drug conspiracy charges.

Village Attorney Lance Malina said the payment is roughly 70 percent of what the village originally sought from Brit UW Limited.


The compensation applied to only two of the 17 lawsuits because the rest each settled for $100,000 or less -- the amount of the village's self-insured retention, similar to a deductible, Malina said.

The lawsuits of Victor Alvarado and Sergio Garcia were settled for more because both spent time behind bars and sought more in damages, Malina said.

Their lawsuits were settled in mid-2016, but momentum toward this week's deal with the village's insurance company began with a conference earlier this year, Malina added.

The insurance company initially declined to cover the settlements because it claimed the village's policy did not cover criminal activity, and the former officers named in the lawsuit, Terrance O'Brien and Matthew Hudak, were facing criminal charges.

But Schaumburg argued that lawsuits concerned the official work of the officers, not the alleged criminal activity.

"A lot of this had to do with their official work," Malina said of the lawsuits concerning the former cops.

O'Brien and Hudak pleaded guilty to skimming drugs from police seizures and then using an informant to sell them on the street. A third former officer, John Cichy, also faced charges, but they were dropped just before his trial was to begin in February, O'Brien and Hudak are now seeking to have their convictions vacated and own charges dismissed.

DuPage County State's Attorney Robert Berlin said the decision to drop the Cichy case stemmed from the discovery that a key informant was under criminal investigation, compromising the credibility of the testimony anticipated. That situation was unique to the case against Cichy, Berlin added.

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