Update: Comments from James E. Thompson of Gottreich Grace & Thompson were added to the story.The Chicago police sergeants’ union can seize the home of its former president as a way to pay back funds he embezzled, a state appeals panel ruled last month.John Pallohusky pleaded guilty to embezzling more than $1 million from the Chicago Police Sergeants’ Association Policemen’s Benevolent & Protective Association 156A in 2012.Since then, the association has tried to recoup its money from Pallohusky …