That gun was in the boy's hand when a police officer shot him in the chest, according to Assistant State's Attorney James Murphy.
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Ruben Roman, 21, now faces felony charges of reckless discharge of a firearm and unlawful use of a weapon by a felon, as well as child endangerment and violating probation, Chicago police said.
Nearby surveillance video captured the moment Roman fired shots at a passing vehicle while Toledo stood by his side on the corner of 24th Street and Sawyer Avenue early on the morning of March 29, according to prosecutors.
They also said police body camera video, which will be shown to Toledo's family before the public, captured the moments an officer told the boy to repeatedly to quote "drop it."
The video reportedly shows Toledo stopped with his left side facing the officer.
Prosecutors described the teen having a gun in his right hand, and said when he turned towards the officer, the officer shot Toledo in the chest.
Prosecutors suggested the Ruger 9mm handgun that fell from Toledo's hand had previously been used by Roman. It matched the seven shell casings that were later recovered at the site where Roman fired the initial shots, Murphy said. The teen's hand later tested positive for gunshot residue as well, prosecutors said.
After the shooting, Roman was initially charged with a misdemeanor count of resisting arrest. An arrest warrant was issued last week after Roman skipped a court date, and he was found Friday in Maywood hiding in a closet, Murphy said.
Murphy also said that when detectives questioned Roman about Toledo's identity, Roman gave them a fake name. He denied knowing Toledo or firing any shots, and claimed that he was in the alley "waiting for a train," according to Murphy.
Assistant Public Defender Courtney Smallwood said that Roman left high school in the 11th grade but recently enrolled in a GED program, and was waiting on several job opportunities after being unemployed for the last two months.
While Murphy claimed that Roman's alleged actions put Toledo at risk and led to his death, Smallwood refused to accept that Roman was endangering the boy, saying that there was no proof that the gun belonged to Roman, that he was wearing the red gloves that tested positive for gunshot residue or that he even brought Toledo outside with him in the first place.
"The victim is dead at the hands of the Chicago police officers, not my client," Smallwood said.
Saturday morning, Mayor Lori Lightfoot discussed releasing the police video of the deadly incident at an unrelated vaccine event.
"I've been very clear about this since day one that transparency always matters particularly in something as significant as a police involved shooting, but I'm going to be respectful of what Ms. Toledo wants to do um she will have the opportunity to see the video along with her counsel early next week and then we'll go from there. We're going to hopefully follow their lead in this," Lightfoot said.
Roman is being held on a $150,000 bond.
Attorneys for the Toledo family were present during Roman's bond hearing on Saturday.
"Until we see all of the videos and examine the evidence for ourselves, we are not in a position to comment," attorney Adeena Weiss Ortiz said in a statement.
The Toledo family and attorneys have an appointment this coming week with the Civilian Office of Police Accountability to view the body camera video and other materials pertaining to the shooting, the statement said.
Toledo's funeral was held Friday.
Chicago police leaders have canceled days off for officers next week as they prepare for possible demonstrations. The Toledo family will be shown police video of the shooting before it is released publicly, officials have said.
Protesters took to the streets Friday night as the Chicago Police Department began to prepare for the release of police bodycam footage.
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The ABC7 I-Team learned the video is expected to be made public next week, after Toledo's family has an opportunity to view it and approve its release.
A memo regarding security planning, obtained by the I-Team, said a decision could be made Wednesday or Thursday of next week, and that the city is monitoring intelligence and social media for potential unrest related to the release of the video. Officers are being told their days off will be canceled and patrols will be stepped up in anticipation of any possible unrest.
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In an earlier statement, family attorneys said "The City of Chicago, the Chicago Police Department and the Civilian Office of Police Accountability have been very cooperative. We wish to correct speculative reports in the media that suggest otherwise."
The statement continued, saying Toledo's funeral was held Friday and expressed thanks from the family for "the outpouring of support and the respect shown for their privacy in this time of mourning."
Protesters took over the Gold Coast intersection of Wabash and Chestnut amid a busy Friday night, drawing attention to Toledo's shooting death.
The group gathered on the West Side, where they held signs and chanted for passing drivers. They said the Chicago teen's death was unjustified, and they want the facts.
The protesters then formed a car caravan from the West Side to the Gold Coast. Police are preparing for larger and possibly more unrestful protests
Alderman Ray Lopez recently met with CPD leadership in hopes of avoiding a repeat of the violence that followed George Floyd's death in Minnesota.
Sun-Times Media contributed to this report.