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Press Release

Crestwood Official Convicted Of Falsifying Reports To Conceal Village’s Use Of Well In Drinking Water Supply

For Immediate Release
U.S. Attorney's Office, Northern District of Illinois

CHICAGO — A former water department official for the southwest suburban Village of Crestwood was convicted today of lying repeatedly to environmental regulators for more than 20 years about using a water well to supplement the village’s drinking water supply from Lake Michigan. The defendant, THERESA NEUBAUER, former water department clerk and supervisor and currently Crestwood’s police chief on leave, was found guilty of all 11counts of making false statements by a federal jury after a week-long trial.

Neubauer, 55, of Crestwood, faces a maximum sentence of five years in prison and a $250,000 fine on each count. U.S. District Judge Joan Gottschall set sentencing tentatively for Oct. 2. A co-defendant, FRANK SCACCIA, 61, of Crestwood, the village’s retired certified water operator, pleaded guilty on April 11 to making false statements and is also awaiting sentencing. Neubauer concealed the village’s use of its well from the government and the citizens of Crestwood to save money, prosecutors argued to the jury. By doing so, the village didn’t have to fix its leaking water distribution system, pay the neighboring Village of Alsip more money for water drawn from Lake Michigan, and properly monitor for contaminants that could have been introduced to Crestwood’s water supply.

“Nobody really knows what was in the water for all those years because [Neubauer’s] lies defeated testing,” Assistant U.S. Attorney Timothy Chapman said in his closing argument.

The charges did not allege, and the trial did not seek to establish, that the defendants’ false statements in regulatory reports concealing the use of well water resulted in any harm to Crestwood’s nearly 11,000 residents or to the environment, but the concealment avoided regulations requiring that Crestwood test its commingled water supply and monitor the amount of certain contaminants.

“The charges in this case are seemingly technical reporting violations. But the lies in those reports evidenced a calloused disregard for the welfare and safety of the citizens of Crestwood by their public officials. The decades’ long scheme proved at trial through the efforts of special agents of the U.S. EPA is a disheartening reminder of what can happen when public officials and employees put their own interests ahead of the people they were supposed to serve,” said Gary S. Shapiro, United States Attorney for the Northern District of Illinois.

“Neubauer lied about the true source of the village’s drinking water and for years submitted false documents to cover up the fact that the residents of Crestwood were drinking water from a well that was not properly tested,” said Randall Ashe, Special Agent-in-Charge of the U.S. Environmental Protection Agency’s Office of Criminal Enforcement in Chicago.

According to the evidence at trial, since at least 1973, the substantial majority of Crestwood’s drinking water came from Lake Michigan and was purchased from neighboring Alsip, which, in turn, had purchased the water from the City of Chicago after it was treated and tested pursuant to state and federal environmental regulations. Since 1982, Crestwood regularly supplemented the Lake Michigan water with water drawn from an underground aquifer through a well located on Playfield Drive, known as Well #1. Crestwood found it necessary to supplement the Lake Michigan water with water pumped from Well #1, in part, because of substantial leakage in its water distribution system, which Crestwood officials failed to adequately repair.

Between 1987 and 2008, Neubauer schemed with others to conceal that Crestwood was supplementing its Lake Michigan water with water drawn from Well #1. She helped prepare and submit various false reports stating that Well #1 was on standby status and no water from the well was distributed to Crestwood’s drinking water customers, and also stating that the sole source of Crestwood’s drinking water was Lake Michigan water purchased from Alsip. The false statements were contained in annual Consumer Confidence Reports (CCRs) and Monthly Operation and Chemical Analysis Reports (MORs).

The trial evidence showed that Neubauer was part of a scheme involving a small circle of trusted village employees, including Scaccia, that were directed by Crestwood’s longtime former mayor, Chester Stranczek, who was not charged.

Under the federal Safe Drinking Water Act of 1974, the U.S. Environmental Protection Agency created regulations to ensure the safety of drinking water distributed by public water systems by requiring testing and establishing maximum contaminant levels for various contaminants. The EPA delegated the primary responsibility for enforcement to the Illinois Environmental Protection Agency, which established its own state regulations that implemented the federal statute and regulations.

Because the City of Chicago tested and treated Lake Michigan water for contaminants, Crestwood, like other municipalities that purchased water directly or indirectly from Chicago, was excused from monitoring its Lake Michigan water for certain contaminants. Due to Crestwood’s use of Well #1, however, the village was required to periodically monitor its drinking water for organic contaminants, inorganic contaminants, and radiological contaminants beginning in the 1970s.

Crestwood was also required to submit an Annual Water Use Audit form, known as an LMO-2 form, to the Illinois Department of Natural Resources and, previously, to the Illinois Department of Transportation. This form required Crestwood to report the amount of water it had drawn from Lake Michigan and from Well #1, and to account for the amount of water distributed and lost by its water system annually. From at least 1982 to 2008, Crestwood officials filed LMO-2 forms that neither reported the amount of water drawn from Well #1, nor accurately accounted for the amount of water distributed and lost by its water system.

Scaccia was responsible for ensuring that water distributed by Crestwood met all federal and state regulations, including filing annual CCRs; obtaining the raw data that was used to complete the MORs; transmitting raw data for the MORs to Neubauer so that she could complete them and submit them to the IEPA; and serving as a point of contact for IEPA with respect to drinking water compliance issues. Neubauer prepared the CCRs for signature by Stranczek, arranged for the CCRs to be issued to Crestwood’s water customers, prepared MORs for distribution to the IEPA based upon information obtained from Scaccia, and distributed completed MORs to IEPA. All the while, Neubauer and Scaccia knew that water pumped from Well #1 was being distributed to the village’s water customers.

The government is being represented by Assistant U.S. Attorneys Erika Csicsila and Timothy Chapman.

Updated July 23, 2015