HAMMOND | Lake Station's mayor, his wife and his stepdaughter entered a Hammond federal courtroom in shackles Thursday, all three pleading not guilty to a total of 15 criminal charges spanning two public corruption indictments.
Defense attorney Scott King, who is representing Mayor Keith Soderquist, 44, and the mayor's wife, Deborah Soderquist, 55, said he believes federal prosecutors "got it wrong" on charges alleging his clients stole food pantry and campaign funds, gambled away some of the proceeds and failed to report the allegedly stolen cash as income on their tax returns.
Speaking after a plea hearing, King said the Soderquists reimbursed themselves for "personal expenses" from the mayor's campaign fund. He said they "never touched a penny" of money from the city's food pantry fund, as the government also alleges.
And he denies they committed any criminal acts in assisting the mayor's stepdaughter, Miranda Brakley, 33, who is charged along with the Soderquists in a separate indictment.
King said Soderquist, a Democrat first elected to the mayor's office in 2008, would continue on as Lake Station mayor and fight the charges.
"He's got a city to run, and he's been real effective at it," King said.
"The mayor and Mrs. Soderquist have completely cooperated with this ongoing investigation even before retaining counsel," King said in a news conference outside the Hammond Federal Courthouse.
"I urge a lot of restraint when considering these charges."
As part of the terms of their release on bond Thursday, the Soderquists will not be allowed to travel outside the U.S. District of Northern Indiana without communicating whereabouts to federal probation officers. A pistol the Soderquists own also will have to be turned over to Lake Station police, pending trial.
Federal prosecutors said Thursday they plan to handle the charges in two separate trials, one that could last between two and three weeks and another estimated to last two weeks. No trial dates had been set as of Thursday.
Following Thursday's plea hearing, all three defendants walked in a tight grouping from the courthouse without answering questions about the federal allegations. They each were released on a $20,000 unsecured bond.
In one indictment, Keith and Deborah Soderquist each face charges of pocketing money from the city's food pantry and the mayor's re-election campaign, in part for gambling at Indiana and Michigan casinos.
A second federal indictment filed Wednesday in U.S. District Court alleges the couple knew the mayor's stepdaughter, Brakley, stole at least $5,000 from the Lake Station City Court and helped her conceal the theft.
Defense attorney Thomas Vanes, who is representing Brakley in the criminal case, declined any specific comment Thursday, noting he only had been retained within the past 48 hours.
"All I would offer on the matter is that nothing is as it seems in Lake Station," Vanes said.
The indictments follow the fall 2013 execution of search warrants by federal agents at Lake Station City Hall. The city's clerk-treasurer previously said she had received 10 subpoenas asking for records and information about Brakley's employment with the city.
Deborah Soderquist works for the city as the mayor's administrative assistant. She also serves as treasurer of her husband's election campaign committee. Brakley previously worked as a city employee.
One indictment alleges between spring 2010 and December 2012, the Soderquists were improperly pocketing funds at the same time they lost $104,000 at region casinos.
The couple face charges of conspiracy to commit wire fraud, seven counts of wire fraud and three counts of false tax filings. The wire fraud charges each carries penalties of up to 20 years in prison on conviction and fines of up to $250,000.
In a three-year span, the couple took $18,500 from the election campaign's account, according to the indictment.
The couple also are accused of cashing a $300 check from the city that was intended for the Lake Station Food Pantry, according to the indictment. About two hours after the check was cashed July 13, 2011, both were gambling at the Four Winds Casino in New Buffalo, Mich., authorities said.
The indictment alleges that in 2010, $3,500 was withdrawn during 12 different days from Soderquist's election campaign committee account. The money was withdrawn within one day from when the couple traveled to the Four Winds Casino in New Buffalo.
In 2011, the couple withdrew on 30 different days more than $10,000 from the campaign account, according to the indictment. Again, the couple traveled to the Four Winds Casino after the money was taken, the indictment states.
The next year, more than $5,000 was withdrawn from the campaign account, according to the indictment, and the couple traveled to casinos after the withdrawals were made.
From 2010 to 2012, the couple is accused of filing false or misleading Indiana Elections Commission forms and filing false tax returns.
In a separate indictment, Brakley is accused from 2011 to 2012 of taking at least $5,000 in bond money from the Lake Station City Court. She also is accused of making a false bankruptcy declaration by failing to disclose more than $7,000 in payments from the city of Lake Station.
The Soderquists are charged in the second indictment with being an accessory after the fact by helping prevent Brakley's apprehension.
The Soderquists also are charged in the second indictment with structuring financial transactions to avoid federal scrutiny. According to the indictment, in December 2012 the couple drove to Kentucky to obtain $15,000 from an unidentified person.
The couple told the unidentified person to write three checks with three different dates that totaled less than $10,000, according to the indictment. Banks are required to file a report involving transactions of more than $10,000.
The checks later were cashed in Bowling Green, Ky., Munster and Merrillville, the indictment states.
King represented Brakley after a State Board of Accounts audit concluded she owed the city $37,182 in unapproved leave payments. King said last year Brakley didn't owe the money, had done nothing wrong and was wrongfully terminated as a city employee.
On her last day as a city employee, $15,880 in missing city bond collections was found in Brakley's car. King previously said that money was returned to the city and was among boxes city employees moved to Brakley's car. King is continuing to represent Brakley in a civil lawsuit she has filed against the Lake Station City Court, alleging wrongful termination. However, attorney Vanes will represent Brakley in the federal criminal case.