Day three of Philpot trial: Attorney advised Philpot OK to take payments

2012-08-22T17:24:00Z 2014-01-30T11:54:10Z Day three of Philpot trial: Attorney advised Philpot OK to take paymentsBy Sarah Tompkins sarah.tompkins@nwi.com, (219) 836-3780 nwitimes.com

HAMMOND | Lake County Coroner Thomas Philpot received a letter telling him he did not need County Council approval to receive incentive payments from a child support incentive fund, according to evidence introduced on the third day of his fraud and theft trial.

The letter was written by David Saks, an attorney hired by the Lake County Council to advise the clerk's office during Philpot's term as Lake County clerk.

Philpot is charged with three counts of mail fraud and two counts of theft of government funds. Prosecutors allege Philpot received about $24,000 in incentive payments between 2004 and 2009 that he knew he was not entitled to without Lake County Council approval. If convicted, he faces up to 25 years in prison and a $250,000 fine for each mail fraud count, and up to 10 years in prison and a $250,00 fine for each theft count.

But Philpot's attorneys claim Philpot did not know he was not entitled to the same incentive payments as his staff who worked on IV-D child support cases, which are cases that involve parties who receive public aid.

Christine Cid, a member of the Lake County Council who has worked in the clerk's office since 2004, testified that when she was council president in 2008 she had taken a stance against supplemental pay. She said they had to cut $15 million from the county budget and lay off several people.

She said she was surprised to see a letter from the clerk's office to put on the council agenda a request to transfer money from a line item for equipment to a line item for supplemental pay, all within the 428 fund.

"The part that disturbed me was the top three administrators were receiving quite large sums of money and others were receiving very little," she said.

Cid also testified that she contacted the council's attorney to look into the bonuses, and that she later told then-personnel manager of the clerk's office, Gus Trakas, that an elected official could not get a pay increase without council approval.

Trakas, who has known Philpot for more than 30 years, took the stand and said he told Philpot about his conversation with Cid.

"I said, 'Hey, Cid told me about these bonuses,' " Trakas said. " 'Cid said that we're OK but you have a problem with it and you have to go to the council.' He said, 'No, because I have a letter from Dave Saks that says I don't need to go to the council.' "

Three former County Council members testified Philpot never approached them to ask permission to receive the money. The request to put the money transfer between line items in the 428 fund was withdrawn and never made it on the council agenda.

According to state statute, distribution payments from the fund did not require council approval, but money used to supplement an elected official's pay did.

It is not disputed Philpot received the payments, but jurors will need to decide whether he knew at the time that it was wrong.

The trial continues at 9 a.m. Thursday in Senior Judge James Moody's courtroom. Assistant U.S. Attorney Philip Benson said he intends to call attorney Saks to testify at that time.

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