The Tuesday shooting killed Marcellis Stinnette, 19, and wounded his girlfriend, Tafara Williams, 20.
Waukegan police announced Friday night that the officer who fired the gun during the incident had been terminated "for multiple policy and procedure violations." No further details were offered. The officer has not been identified.
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The FBI joined Illinois State Police in investigating the shooting, prosecutors said.
Lake County State's Attorney Michael Nerheim said he asked the U.S. Justice Department to review the circumstances surrounding the shooting.
"I am confident in the work being done by the Illinois State Police and welcome the assistance of the FBI," Nerheim said in a statement. "As I have said before, once the investigation is concluded, all the evidence will be reviewed and a final decision will be made with respect to any potential charges."
Williams' family said she was shot in the stomach and hand and remains hospitalized. While his family maintains that Stinnette died at the scene, police said he died at the hospital.
"Why did you shoot? I didn't do nothing wrong. I have a license. You didn't tell me I was under arrest. Why did you just flame up my car like that? Why did you shoot?," Williams asked from her hospital bed.
"When I got there, she said, "Mama, they just shot us for nothing," said Clifftina Johnson, mother of Williams. "My daughter said she put her hand up, and if she didn't put her hand up, she said, 'Mama, I would be dead.'"
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Authorities said it all started with a report of a suspicious vehicle near Liberty and Oak just before midnight on Tuesday, but families said the couple was simply sitting inside their car outside her mother's home. Police said when an officer went to investigate, the car drove off.
Moments later, another officer spotted the car near Martin Luther King Jr. Avenue and South Avenue, police said. As that officer approached on foot, the car reversed and the officer fired his pistol out of "fear for his safety," police said.
"A second officer located the vehicle in the area of MLK and South Street," said Waukegan Edgar Navarro. "The officer exited the vehicle and the vehicle that he was investigating then began to reverse. The officer fired into the vehicle."
"The police officer got out of the car. When he told them to stop, he told her to stop, she was scared. She put her up hands, she started yelling, 'Why you got a gun?' She started screaming. He just started shooting," said Darrell Mosier, witness.
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As police approached the car, Williams' mother said she handed over her license and listened to the officer's directions.
"I heard the girl. Her hands went up. She said, 'I'm sorry. I didn't mean it. I didn't mean it. I didn't try to run you over. We got no guns or nothing,'" Mosier added during a Thursday protest.
No weapon was found in the vehicle. Williams is being represented by civil rights attorney Benjamin Crump.
The officer who shot the couple is Hispanic and a five-year veteran of the Waukegan Police Department. The officer who conducted the original traffic stop is white, police said.
During a Thursday demonstration, Clyde McLemore, head of the Lake County chapter of Black Lives Matter, called for a federal investigation. Activists and relatives of the couple also have demanded the release of police video of the shooting, which authorities say has been turned over to investigators.
Nerheim urged calm while the investigation takes place and pledged transparency.
The Associated Press contributed to this report.