HAMMOND | A jury found East Chicago's mayor and a former city supervisor guilty of conspiracy and theft of government funds after just 2 1/2 hours of deliberation Friday.
Mayor George Pabey and Jose Camacho sat expressionless as Senior Judge James Moody read the verdict to a silent courtroom.
The conviction stripped Pabey of his office as soon as the jury announced the verdict. He and Camacho face prison sentences of up to 10 to 15 years, depending on whether a judge decides to have them serve their sentences for each conviction at the same time or separately. A sentencing hearing has not been scheduled yet.
A jury of nine women and three men found prosecutors met the burden of proof in showing Camacho and Pabey conspired to use city money to revamp a house Pabey bought thee years ago in the Miller Beach neighborhood of Gary. Prosecutors claimed Camacho used city accounts with Pabey's blessing to purchase home improvement items for the residence, and that Camacho instructed city employees to work on the home while on the city's clock.
Camacho was found not guilty of two counts of tampering with witnesses, charges that could have brought a 20-year sentence if he had been convicted.
There was tension in the air as people filed out of the courtroom, with some of Pabey's supporters crying in the hallways of the fourth floor of the federal courthouse.
Pabey's defense attorney, Scott King, said he and his client were "very disappointed."
"I've known George for a very long time, and he's a good man," King said. "This is East Chicago's loss."
City Controller Charlie "Tuna" Pacurar became interim mayor Friday under a 2008 Indiana law that ousts felons from elected office as soon as they are convicted. His term will last until Hammond Mayor Thomas McDermott Jr., as chairman of the Lake County Democratic Party, conducts of caucus of East Chicago Democratic precinct committeemen. They will elect someone to fill the remaining 15 months of Pabey's term.
Pabey walked out of the courthouse Friday with his wife Hilda and daughter Lisette. The family declined comment.
King said in the coming weeks he plans to appeal the conviction to the 7th U.S. Circuit Court of Appeals in Chicago, citing "several issues" and objections to some of the jury instructions.
He did not specify whether those involved directions for jurors to not consider certain witnesses' statements as evidence Pabey was unaware of the embezzlement. Two witnesses had testified that Camacho told them Pabey would be angry if he knew what Camacho was doing. Jurors were instructed to use that testimony only as a reference for Camacho's frame of mind.
Early in the day, a full courtroom heard about three hours of closing arguments. Assistant U.S. Attorneys Gary Bell and David Nozick highlighted for jurors the 23 witnesses they called and hundreds of pages of receipts and phone records connecting Camacho to Pabey's house. They also showed jurors documents of phone calls Pabey had with Camacho shortly before or after Camacho purchased items for the house using city engineering accounts.
"These are arrogant public officials who play by their own rules," Bell said.
Camacho's defense attorney, William Padula, said he and his client were "pleased" and "grateful" jurors acquitted Camacho of the witness tampering charges, after Padula pointed to conflicting employee testimony about whether Camacho told them to lie to federal investigators. Padula did not contest the government's evidence of conspiracy and theft.
Nozick asked jurors if it was that surprising that Camacho would try to take all the blame, given that Pabey made Camacho a department head after taking office in 2004.
"George Pabey is Jose Camacho's meal ticket," Nozick said. "He's his golden goose. He's the one who picked him from a janitor and elevated him to a supervisor."
King delivered an emotional closing argument, saying Pabey was betrayed by someone who was like a brother.
"Mr. Camacho was not only stealing from the city, he was stealing from his friend," King said. "That answers the question of how (Pabey) could not know."
King showed jurors a copy of a check Pabey's wife, Hilda, wrote to Camacho for $600 in plumbing supplies. That same day, King showed, Camacho bought about $600 in plumbing supplies using city money.
Over the years, King argued the Pabeys relied on friends and relatives for help with home repairs, and that the couple paid them in cash for the supplies.
"I wish, I wish we had receipts," King said. "They would line up like little tin soldiers."
The Pabey family declined comment.
Bell said the government will seek forfeiture of the Gary house, which means prosecutors will try to take back anything Pabey and Camacho gained through their criminal activity.
Pabey bought the brick home in Gary's Miller Beach neighborhood in 2007 for $67,000, according to county records. A real estate appraiser testified that the home now is appraised at $135,000. It is on the market for $124,900 but originally was listed for $149,000 in September 2009.
Camacho and Pabey were released on separate $20,000 unsecured bonds, which they must pay if they do not appear in the future. The bonds were issued when they were arrested in February.
East Chicago resident Alicia Lopez-Rodriguez, who attended the trial, said the verdict was bittersweet.
"We've wasted the last five years with a mayor who did not have the best interests of East Chicago at heart," she said. "We need to put this very black eye behind us ... and really think about whoever we're going to put in next as mayor, because we don't want to go through this a third time."
Pabey's predecessor, Robert Pastrick, served for more than 30 years before Pabey defeated him in a special election in 2004. The Indiana Supreme Court had called for another vote after investigating allegations of rampant absentee ballot fraud.
When Pabey took office, he pledged to reform the city and get rid of the shady politics best characterized by the 1999 sidewalks-for-votes scandal that led to federal convictions against three city councilman and an additional trio of Pastrick aides.
"I told you three years ago the city had a big gang problem," Pabey said in 2004, "and that the only way to get at the gangs is to get rid of the gang at City Hall."
--Times staff writer Dan Carden contributed to this report.