A history of corruption in government in Northwest Indiana continues
From former Lake County sheriff Rudy Bartolomei in the mid 1980s to the recent sentencing of Calumet Township Trustee Mary Elgin, Northwest Indiana officials have been the targets of federal investigations of bribery, theft of public money and other allegations of public corruption for decades.
'Taxpayers have been again ripped off.' Judge says former Calumet Township Trustee Mary Elgin 'lost her moral compass' after handing her 12-month, 1-day prison sentence.
HAMMOND — A federal judge sentenced former Calumet Township Trustee Mary Elgin to 12 months and one day in prison as a warning to other public officials thinking of running their election campaigns on the backs of their employees and the public's money.
"Taxpayers have been again ripped off by a Calumet Township trustee," U.S. District Court Judge Joseph VanBokkelen said Wednesday at Elgin's sentencing.
"It is imperative this sentence be a message to others," the judge said, adding others who "put the arm" on their employees for contributions can also expect prison.
Elgin, who sat in a wheelchair following recent back surgery, apologized to her family, friends and Calumet Township residents for "my wrongdoing. I take full responsibility. I ask complete forgiveness. I made a huge mistake."
Kevin E. Milner, Elgin's defense attorney, argued she should spend no more than six months in prison and the rest of her time in some form of lesser detention, but Van Bokkelen expressed his frustration with a line of public officials who see their office as political spoils and act as if the public is "lucky to have them as an officeholder."
The judge ordered Elgin to report to prison no later than Aug. 15. She will be under federal supervision one year following her release from prison. Her felony conviction disqualifies her for future public office.
He ordered her to pay $15,000 in restitution to Calumet Township government and $6,311 to the IRS for failing to pay her 2013 income taxes.
Elgin was the Calumet Township trustee from 2003 until her defeat in 2014.
She ran the largest township office in Northwest Indiana and employed about 200 workers who distributed assistance to Gary's poorest residents.
The judge said Elgin may have started with the intent to help the state's neediest residents, but as time went on, "she quite simply lost her moral compass."
The FBI uncovered evidence Elgin believed her township employees owed her political support. She directed her administrative staff to distribute her political fundraising tickets to employees and keep track of their ticket sales.
Van Bokkelen said Elgin took office with the promise to do away with the "abhorrent 2 percent club" where public employees had 2 percent of their salary diverted to the officeholder's campaign fund. "But she replaced it with the equally deplorable scheme."
He said the evidence proved she pressured employees to buy tickets to her three annual fundraisers. "They were frequently under obligation and immense pressure," the judge said, adding that one man working for the township as a janitor was forced to go on an installment to donate all that Elgin demanded.
The judge said township employees could lose job privileges and even more pressure from Elgin's management if they declined tickets.
The government said employees were expected to buy the tickets with their own money if they couldn't sell them as well as take public time to prepare her fundraising event.
Federal prosecutors said Elgin played on her employees' job security fears because she had been laying them off because of declining property tax revenues.
"Public corruption cannot and will not be tolerated at any level," said U.S. Attorney Thomas Kirsch II in a news release Wednesday. "Today’s sentence of imprisonment should send a strong message of deterrence. Citizens expect and deserve officials to act in the best interest of the public, free from self-dealing and illegal self-enrichment. My office, together with our law enforcement partners, will continue to pursue matters involving public corruption. I encourage anyone with information concerning corrupt public officials to contact my office or the FBI."
When faced with a crisis, true leaders hit the brakes and steer us in a new direction away from the disaster.
Van Bokkelen said, "This was not a one-time mistake, but crimes over an extended period of time."
A federal grand jury in December 2014 indicted Elgin, Steven Hunter, her son and head of the township's information services and technology office, Ethel Shelton, Elgin's secretary, and Alex Wheeler, a township department head.
She and her son pleaded guilty in May 2017 under agreements in which they avoided the maximum penalty under law — 20 years in prison and a $250,000 fine. Elgin not only admitted to wire fraud but also failed to file her 2013 federal tax return.
A U.S. District Court jury last month convicted Shelton and acquitted Wheeler of public corruption charges.
Hunter, who was in court with several other Elgin family members and friends, is scheduled to be sentenced himself June 19.
No sentencing date has been set for Shelton, whose attorney is petitioning the court to overturn her guilty verdict.
The judge cited earlier cases of public officials profiting from the abuse of their office, including former Gary City Clerk Katie Hall, former Calumet Township Trustee Dozier T. Allen Jr. and former Lake County Surveyor George Van Til.
Katie Hall, also a former U.S. Congresswoman, and her daughter, Junifer, her chief deputy city clerk, were convicted 15 years ago of extorting money from her employees to pay for her elections. Junifer Hall was sentenced to 16 months in prison. Katie Hall was released on probation.
Allen was sentenced eight years ago to 18 months for stealing $143,000 from a government grant given Calumet Township.
Van Til was sentenced to 18 months almost five years ago for directing some employees of the county surveyor’s office to engage in political campaign work for him while on the county’s public payroll and using county government equipment to engage in political activity.
Assistant U.S. Attorney Philip Benson said Elgin was extorting money from her employees about the same time Allen, her predecessor, was being tried and sentenced for his crime. He said the only deterrence that created was for Elgin to have her employees sign a document that they couldn't do politics on public time to cover herself if they were caught following her orders to campaign for her.
UPDATE: Former high ranking Lake County police commander Daniel Murchek is indicted in the towing bribery scandal
CROWN POINT — Dan Murchek, a former high-ranking administrator, is charged and will plead guilty to lying to the FBI about his involvement in the deepening Region towing bribery scandal.
The U.S. Attorney's office made public early Friday a one-count indictment against Murchek, shortly after the 24-year veteran of the Lake County police force ended his law enforcement career with an abrupt resignation.
U.S. District Court Magistrate Judge John E. Martin arraigned Murchek, 57, of Schererville on the felony, which carries a maximum penalty of five years in prison and a $250,000 fine. He was freed on bond.
Although Murchek pleaded not guilty Friday, attorney Caitlin Padula, who represented Murchek in court, said Murchek already has signed a plea agreement admitting he lied to FBI agents Nov. 14, 2016, when he denied receiving an illegal campaign contribution from an undercover FBI informant.
The agreement, made public Friday, states Murchek has provided enough assistance to federal authorities investigating his misconduct to induce the government to recommend he receive the minimum sentence under federal guidelines and a fine of only $3,500.
His potential sentence won't be calculated until after he formally pleads guilty before U.S. District Court Judge James T. Moody. No date is set for that plea.
Murchek rose in the ranks of county police to third-in-command as deputy chief of the Lake County Sheriff's office between 2011 and last fall under former Sheriff John Buncich.
Murchek also has been president of the Northern Indiana Area Labor Federation and the Lake County Police Association Local 72.
The beginning of the end
Murchek's since abandoned plans to run for Lake County sheriff in next month's Democratic party primary election brought about his downfall.
The indictment alleges Murchek began asking for campaign financial support in the fall of 2015 from Willie Szarmach, owner of CSA Towing in Lake Station, and Scott Jurgensen, owner of Samson’s Towing in Merrillville.
Unknown to Murchek or Szarmach, Jurgensen was recording their conversations. He was an undercover informant who had been helping the FBI uncover bribery among towing firms doing business with area police and politicians since 2013.
The indictment alleges Murchek again met with the two towing owners in June 2016 to explain how they could disguise campaign contributions to him in the name of other people to avoid the maximum limit for business corporations, a practice the FBI calls a structured donation.
On Sept. 23, 2016, Jurgensen gave Murchek a $1,000 contribution in the name of the towing business and a $500 check illegally structured to look like a separate contribution from one of his towing employees. Jurgensen told Murchek he was the source of the money for both checks.
Four days after the FBI raided former Sheriff John Buncich's home and office Nov. 10, 2016, for evidence of illegal contributions from towing firms, FBI agents questioned Murchek about whether he received a structured contribution from Jurgensen.
Murchek said he didn't, but now admits his denial was a lie.
U.S. Marshals escorted Murchek into the U.S. District courtroom early Friday in civilian clothing. He answered the magistrate's questions and acknowledged he had turned over his passport and that he cannot possess any firearms in his home while free on bond.
U.S. Attorney Thomas Kirsch II issued a statement early Friday that public corruption is a priority for his office.
"Mr. Murchek lied to FBI agents who sought truthful information from him in connection with what was then an ongoing public corruption investigation of which he was aware. Mr. Murchek did so purely to protect his self-interest and conceal his criminal conduct from the FBI," Kirsch said.
"Mr. Murchek was a police officer, sworn to uphold the law, at the time he told the lies, making his conduct particularly egregious."
Investigation has long reach
The federal investigation into the Lake County Sheriff's Department has swept up a number of local government figures, including in neighboring Porter County, and is expected to claim more in the near future. Rumors abounded Thursday that other figures under Buncich's administration and municipal officials who controlled towing would be next.
A look back at corruption in the Region: Former Lake County Commissioner Steve C. Corey pleads guilty to lying and obstructing a federal investigation
Corruption in the Region: Former Lake County Commissioner Steve C. Corey pleads guilty to lying and obstructing a federal investigation
Name: Steve C. Corey
Office held: Lake County Commissioner
Dates in office: 1983 to 1992
The crime: He lied to a U.S. District Court grand jury investigating bribery in Lake County Government.
Corey was a successful businessman who built a thriving Hobart bakery, once from the ground up in 1954 and again from the ashes of a fire that gutted the business in 1974.
He found time after making the doughnuts to become politically active. He served on the Hobart City Council in the 1960s and was elected to the Lake County Council in 1978 and 1982.
Corey became a county commissioner in December 1983, when Democratic precinct committeemen named him to replace Rudy Bartolomei, better known as Rudy Bart, who took over that year as sheriff.
Federal authorities soon charged Bartolomei with misconduct ranging from making county employees work on his political campaigns and work on a summer cottage on Lake Michigan as well as paying his housemaid with public money and extorting political contributions from county employees.
Bartolomei pleaded guilty to two felony counts and within weeks began cooperating with federal investigators and a grand jury on the web of public corruption over which he and his fellow county officials had presided.
Bartolomei had spent his time on the county board of commissioners cleaning up — so to speak — by awarding inflated janitorial contracts to vendors who paid kickbacks to him and other commissioners.
Authorities subpoenaed thousands of pages of documents, including minutes of commissioners meetings, payment vouchers in a probe called "Operation Lights Out," that resulted in a number of indictments, including that of Corey in 1993 on perjury and obstruction charges charges.
The government alleged Corey lied in July 1989 to a federal grand jury investigating whether Corey had accepted $30,000 from his long-time friend, East Chicago power broker Vincent Kirrin, to steer a lucrative government cleaning contract to a company Kirrin secretly owned and operated.
Corey denied wrongdoing and insisted the money was a business loan to his struggling bakery. But Corey pleaded guilty in February 1994 to lying and obstructing the federal investigation.
Former U.S. Attorney David Capp, who coordinated the federal investigation, said at the time the perjury conviction was "particularly important" because it revealed how contracts were awarded, not through independent assessment of their merits, but on cronyism.
A federal judge sentenced Corey to probation. Corey, who was suffering from a heart condition, died less than a year later.
Corruption in the Region: Corruption was spelled GUEA a decade ago
Name: Gary Urban Enterprise Association
Those involved: Jojuana Meeks, former Lake County Councilman Will Smith, former Gary attorney Willie Harris, former county tax collector Roosevelt Powell
Gary Urban Enterprise Association or GUEA came into existence in 1985 under a state law permitting U.S. Steel and other Gary businesses to reduce their property taxes by making charitable donations of more than $15 million to the association between 2000 and 2003.
The donations were supposed to improve the quality of life of the poor by redeveloping the nearly 3-square-mile area of Gary's Emerson neighborhood.
However, a Times investigation in 2004 found that former GUEA Director Jojuana L. Meeks and other in GUEA embezzling about $1 million through perks like her Jaguar sports car, a new, rehabilitated home and overpayments to herself and other GUEA officials.
The nonprofit collapsed in 2007 after being declared a corrupt business venture. Meeks pleaded guilty to conspiracy, mail fraud and tax evasion. She and other GUEA officials were convicted in U.S. District Court in Hammond.
Federal prosecutors also charged political insiders Roosevelt Powell, Willie Harris and Will Smith with conspiring with GUEA to further bleed it, the Gary Historical Society and Lake County government through an elaborate real estate scheme involving the abandoned Ralph's Grocery store in Gary's Miller section.
Smith learned of that through his political connections that its owners wanted to donate it as a tax write off. Smith conspired with Harris, an attorney for the Historical Society, take over the property.
They had Powell, a county tax collector, to use his influence to induce Meeks, to buy the store for $200,000 on the same day that Powell told a Lake County judge to wipe out $58,000 in back taxes on the building because it couldn't be sold.
The men pocketed significant profits without ever legally owning the building. Their defense lawyers argued the deal was legitimate, but a federal jury convicted them in September 2007.
Corruption in the Region: Former East Chicago city councilman Frank Kollintzas, infamous for sidewalks-for-votes scandal, remains at large after fleeing to Greece in 2005
Name: Frank Kollintzas
Office held: East Chicago city councilman
Dates in office: 1979 to 2005
The crime: A U.S. District Court jury in South Bend in November 2004 convicted then city councilman Frank Kollintzas as well as East Chicago Councilman Je De LaCruz and City Controller Edwardo Maldonado of misappropriating millions of dollars in concrete they gave to residents in the form of free driveways, sidewalks and patios to ensure the city administration's 1999 re-election.
Jurors also convicted Kollintzas of lying to the FBI, which investigated the so-called sidewalks scandal.
Kollintzas would have been forced to serve a prison term of 11 years and four months if he hadn't fled the county days before his sentencing in February 2005.
U.S. Customs and Border Protection reported Swissair sold a ticket from Chicago's O'Hare International Airport to Zurich, Switzerland, to a man who presented a non-American, possibly Greek, passport to the airline in the name of Fotios Kollintzas.
Authorities believe Kollintzas, who was 62 when he bolted, fled to Greece, a nation that doesn't return American fugitives who receive Greek citizenship.
Kollintzas is a native-born American, but his parents emigrated from Greece and settled in East Chicago where they operated a family diner.
Just before his flight, he sent a letter to a federal court judge saying he couldn't face growing old or dying in prison. He conceded in the letter. "I know what I did. The concrete was poured, and I tried to make sure the people in my district got the work done at their property."
The man who fell from grace had a bachelor's degree from Indiana State University, a master's degrees in elementary education and in physical education from Indiana University and an advanced degree in administration and supervision from Indiana State University.
Kollintzas taught and also was director of athletics at East Chicago Central High School. Kollintzas also had a political career tied to Mayor Robert Pastrick, who was facing a troubling challenge in the 1999 municipal elections from Stephen R. "Bob" Stiglich.
Pastrick, Kollintzas and others in the city administration were worried enough about Stiglich to launch a giveaway of acres of free concrete to entice voters into supporting their re-election in the week leading up to that year's election.
Kollintzas, among others directed and paid contractors to pour concrete, initially just for public sidewalks and curbs, but eventually residents' private driveways, patios and walkways as well as free tree trimming on private property.
Pastrick won the spring primary that year and the concrete paving ended abruptly, sometime before individual jobs were competed, because the city had run out of cash.
Public complaints about shoddy concrete work prompted a Times investigation as well as the attention of then U.S. Attorney Joseph Van Bokkelen and his assistant David Capp. They directed a federal investigation that resulted in 2003 indictments that eventually led to the convictions of seven elected officials, a number of private contractors.
Pastrick never faced criminal charges, but a federal judge did brand Pastrick’s administration as corrupt and ordered Pastrick and former political allies to pay $108 million in damages in 2011, forcing Pastrick into bankruptcy.
The courts issued a warrant for Kollintzas' arrest 13 years ago. He remains at large.
Corruption in the Region: Peter Benjamin
Name: Peter Benjamin, formerly of Hobart
Offices held and dates: He served as Lake County assessor from 1987-94, as Lake County auditor from 1999-02 and operated a lucrative law practice on the side.
The crime: A federal grand jury indicted him in 2002 on racketeering and money laundering allegations that included: defrauding clients, lying on tax returns to cover thousands of dollars he spent on prostitutes and police officers who supplied him with drugs and bribing former Lake County Council member Troy Montgomery, of Gary.
He also lied about attending continuing education courses the state requires for lawyers, instructed a prostitute to lie to a federal grand jury about Benjamin's wrongdoing and embezzled real estate from his ex-wife's family and dissipated a small fortune, $1.2 million and a promising political and law career during his crime spree.
Benjamin pleaded guilty in 2003 to providing Montgomery with cash and dining room furniture in exchange for Montgomery using his county government connections to steer lucrative business to Benjamin's law firm. Montgomery served a one-year federal prison term for accepting the bribe.
Benjamin agreed to cooperate with federal investigators and publicly promised to bring down as many people in local government as possible, but the quality of Benjamin's cooperation and the evidence he provided the government never appeared to have much impact on future federal prosecutions.
He later told the court he met about 20 times with FBI, IRS and other law enforcement agents in his eagerness to cooperate with their investigations, but he also was suicidal, heavily medicated, "physically, emotionally and psychologically exhausted."
Benjamin publicly laid out his faults in a 2005 letter to the court.
"I clearly bribed an elected official with expectation that I would be awarded a contract and committed other unlawful acts....I broke the law and have dishonored my family, the legal profession my community and myself. As a result, I have lost everything, my former wife, my law license, my career, assets, pension and self respect. I am only a shell of the person that I once was."
He served a 27-month prison term. Court documents indicate he was working a consultant in New York in 2010. He was still paying restitution the court ordered he must to Lake County, the Internal Revenue Service and his former wife's family.
Corruption in the Region: John Buncich
Name: John Buncich
Office held: Lake County sheriff
Dates in office: 1995 to 2002 and again 2011 to Aug. 24 of this year.
The crime: Bribery, wire fraud and honest service wire fraud.
A U.S. District Court jury convicted the former sheriff Aug. 25, following a 14 day trial, of accepting tens of thousands of dollars in cash from two towing firm owners in return for giving them more lucrative town work from the sheriff's department.
Buncich said it costs about $200,000 to run for sheriff. He showered political fund-raising tickets on towing firm owners, including Scott Jurgensen, a former Merrillville Police Department officer and confidential FBI informant, and William "Willie" Szarmach, who became cooperating government witness.
They in turn plied him with cash and requests for lucrative towing assignments and they said he delivered.
Buncich denied all wrongdoing during three days of testimony, saying his conduct was unchallenged and "All candidates do this."
Assistant U.S. Attorney Philip Benson, who presented evidence against Buncich replied, "It's being challenged now isn't it?"
Benson provided jurors with video and photographic evidence that Buncich used his campaign fundraising as cover for a scheme to solicit kickbacks.
Defense lawyers argued, to no avail, that Buncich has had a spotless reputation for honesty during his more than four decades as a county police officer and the government was staging bribery scenes for their undercover cameras, including one involving Buncich's former second in command, Timothy Downs delivering $7,500 to Buncich inside the sheriff's office in 2015 after Downs began cooperating with the FBI.
An FBI video surveillance recording of Buncich leaning into Szarmach's tow truck and Jurgensen giving Buncich $2,500 April 22, 2016, in the parking lot outside of Delta Restaurant in Merrillville.
An FBI video surveillance recording of Jurgensen giving Buncich $2,500 on July 21, 2016, in the parking lot outside of Delta Restaurant in Merrillville.
He awaits sentence now scheduled to take place Dec. 6.
Take a look at this gallery featuring corrupt politicians caught by former U.S. Attorney David Capp:
Gallery: Corrupt politicians caught by former U.S. Attorney David Capp reminisces
U.S. Attorney David Capp
CappRetro: Frank J. Stadola
CappRetro: Rudy Bartolomei
CappRetro: Jay Zambrana
CappRetro: Robert Freeland/Dozier Allen
CappRetro: Peter Benjamin
CappRetro: Will Smith
CappRetro: Morris Carter
CappRetro: Michael Jankovich
CappRetro: Rudy Bartolomei
CappRetro: Steve Corey
Timothy Downs, who was second-in-command under Buncich, pleaded guilty Dec. 16, 2016, to cheating the public of honest government services by using his authority within the department to do political fundraising for Buncich while he was on duty and using his publicly provided police car.
Downs is still awaiting sentencing.
Portage Mayor James E. Snyder and John Cortina, owner of a Portage towing firm, are now set to stand trial June 4 in U.S. District Court — Snyder for allegedly soliciting and receiving $12,000 in exchange for a Portage towing contract, and Cortina for allegedly offering the money. They are pleading not guilty.
Tom Goralczyk, a former Merrillville town councilman, pleaded guilty in January to accepting bribes — a 2000 Jeep Grand Cherokee and a 2008 Ford Focus — in return for promises of a lucrative contract to Jurgensen, the undercover FBI informant. Goralczyk is awaiting sentencing May 16.
A U.S. District Court jury last August found Buncich guilty of soliciting and accepting campaign contributions from Szarmach and Jurgensen in return for giving them more lucrative towing work.
Buncich is serving a 188-month prison term, currently at a federal secure medical facility in Springfield, Missouri.
Last fall, Democratic precinct committee members selected as the new sheriff Oscar Martinez, who demoted Murchek to a deputy patrol commander.
Martinez said Friday the alleged crimes that led to Murchek's indictment occurred before his administration, but they were of great concern to him.
"Since becoming Lake County sheriff, I have done my best to set a high bar and a good example for the men and women of this department," he said.
In 'the darkest day' of his life former Sheriff John Buncich is sentenced to 188 months in prison
HAMMOND — A federal judge has sentenced former Sheriff John Buncich to immediately begin serving a 188-month prison term — a little more than 15 years — for public corruption.
The man who had been the face of law enforcement in Lake County for decades appeared stunned by the pronouncement, which his lawyer, Bryan Truitt, called tantamount to a death sentence for his 72-year-old client.
U.S. District Court Judge James Moody refused the usual courtesy to public corruption figures, the freedom to report directly to his federal penitentiary at a later date.
Moody said the embarrassment Buncich caused to his police department and the harm he caused to Lake County's reputation in the state was staggering and denounced Buncich's abuse of power for self-enrichment and his "blind obedience to the political cult. Shame on you."
Buncich's voice was reduced to a whisper after learning of his sentence. He only had time to briefly look back to the court audience, which contained a number of his supporters, before court security officers led Buncich in restraints out of the court and into a holding cell.
The court also imposed a $250,000 fine on Buncich.
U.S. Attorney Thomas Kirsch II said his office requested Buncich be detained immediately for fear he would flee to avoid having to serve such a lengthy sentence. Kirsch said there was evidence of large amounts of "unexplained cash" associated with Buncich's bank accounts.
Truitt said it was ridiculous to believe a man of Buncich's age and poor finances would be able to live long on the run. Truitt said his client will appeal the conviction and sentence within weeks.
Buncich likely would spend the next 45 to 60 days at Chicago's Metropolitan Correctional Center until he is transferred to a federal penitentiary. Truitt said Buncich preferred to spend his sentence at a federal camp in Yankton, South Dakota.
"This is the darkest day of my life," Buncich told the judge earlier in the six-hour sentencing hearing. Nevertheless, he said he was proud of his career and that he brought more minority police officers and civilian employees into the department than any previous sheriff.
The judge said he was struck by Buncich's almost complete lack of remorse, as was Kirsch, who said he is forming a new task force "to root out public corruption wherever it exists in the Northern District of Indiana."
Kirsch declined to comment on who might be indicted next, although testimony by FBI Agent Nathan Holbrook during the sentencing hearing hinted the towing investigation extended beyond the Sheriff's Department to the towns of Merrillville and Schererville.
Assistant U.S. Attorney Philip Benson reminded the court of evidence during Buncich's trial in August that the sheriff received tens of thousands of dollars in illegal payments from William Szarmach, a Lake Station towing firm owner and longtime Buncich associate, and undercover government informant Scott Jurgensen, owner of Samson's Towing of Merrillville, between 2014 and 2016.
Buncich found guilty of bribery
A jury last August found Buncich guilty of bribery counts on evidence the payments from Szarmach and Jurgensen amounted to bribes because they were made on condition Buncich provide them the choicest towing districts, and that Buncich delivered.
Prosecutors said the bribery took place under the cover of campaign fundraising. Buncich was elected sheriff in 1994, 1998, 2010 and 2014, and named chairman of the Lake County Democratic Party in 2014.
A federal grand jury indicted Buncich, Timothy Downs, Buncich's second-in-command at the time, and Szarmach in November 2016. Downs later revealed he had become a cooperating government witness, as did Szarmach eventually. Both have pleaded guilty and are awaiting sentencing themselves.
The government equipped Jurgensen with audio and video equipment that recorded payments. The evidence was used by the government to win its conviction of Buncich, who was forced from office by the guilty verdict.
Buncich told the court he worked 70-hour weeks to ensure public safety as well as rehabilitate the County Jail, which was under federal mandate to correct nearly 100 deficiencies in inmate medical and mental health care.
But Benson presented evidence that Buncich was so obsessed with receiving bribes from towing firms that he directed his gang unit to put off their regular duties to ticket more cars for towing.
Holbrook said the department was receiving complaints from the public about their cars being towed for minor infractions and costing their owners hundreds of dollars to recover their vehicles. Holbrook said the joke around the Sheriff's Department was they had become the "towing police."
Benson said Buncich's list of approved towing firms were all political contributors, and he considered those who didn't buy fundraising tickets, or who contributed to his political opponents, to be unfriendly and unworthy of county business.
Truitt argued Buncich didn't feel remorse, because he still doesn't believe he did anything wrong. He said Buncich only engaged in political fundraising like any other local elected official and had cars towed for legitimate reasons.
The guilty verdict in August forced Buncich from office. One of his political opponents, Oscar Martinez Jr., now occupies Buncich's old office. The Lake County Board of Commissioners has taken control of awarding towing contracts away from the Sheriff's Department.
Former Merrillville town councilman Thomas Goralczyk indicted, admits guilt to bribery charge in towing scandal
CROWN POINT — A former Merrillville town councilman admitted Friday he took bribes from a federal police informant in exchange for a vehicle towing contract, according to the U.S. attorney's office.
Thomas Goralczyk, 51, of Merrillville, was indicted Wednesday by a grand jury in Hammond of felony bribery. He admitted Friday he was guilty of the offense in a plea agreement with prosecutors.
A date for a plea hearing has not yet been scheduled, according to the U.S. attorney's office.
Goralczyk, contacted at his home in Merrillville, declined to comment.
Merrillville Town Council President Richard Hardaway said his heart goes out to Goralczyk's family.
Hardaway said he worked with Goralczyk on the council for eight years, and he had believed the former councilman was beyond reproach.
"It's another tough day for the town of Merrillville," Hardaway said.
Goralczyk admitted in the plea agreement he accepted two vehicles from a witness cooperating with the FBI on the promise he would use his influence as a councilman to steer the town's towing contract to the informant's towing company.
The bribes were made between February 2013 and August 2014, the agreement states. He accepted a 2000 Jeep Grand Cherokee from the informant for $400, when he knew the vehicle's value exceeded $2,500.
He also accepted a 2008 Ford Focus, valued at more than $5,000, for which he paid nothing, the agreement states. He also was provided four camper tires and free storage for a personal motorcycle as part of the deal.
The former councilman attempted to hide the bribes by presenting false bills of sale to the Indiana Bureau of Motor Vehicles representing he paid $1,000 for the Jeep Cherokee, and $2,750 for the Ford Focus, the agreement states.
Goralczyk agrees to forfeit $7,500 before sentencing as part of the plea deal.
“Public officials, like Mr. Goralczyk, elected and entrusted to do the public's work, are required to do that work free from self-dealing and graft,” U.S. Attorney Thomas L. Kirsch II said Friday in a statement. “This is not optional. The public demands and is, in fact, entitled to honest public servants.”
Goralczyk was first elected as a Merrillville town councilman in 2007 and took office in January 2008. He was re-elected in 2011 and began his second term as 4th Ward councilman in January 2012.
He served as president of the Town Council in 2011 and 2015.
He also held various other positions on the Merrillville Redevelopment Commission, Lake County Solid Waste Management Board and the governing board of the Northwestern Indiana Regional Planning Commission, according to the agreement.
The investigation into Goralczyk was first revealed in August at the trial of former Lake County Sheriff John Buncich, who was convicted of wire fraud and bribery for taking cash bribes to steer the county's towing work to favored companies.
Nathan Holbrook, an FBI special agent, testified Aug. 8 at trial the investigation into Buncich began initially with an investigation in 2012 into whether Scott Jurgensen, who was working undercover for the FBI, bribed Goralczyk to get towing work from the town.
Jurgensen, owner of Samson's Towing, had complained to the FBI special agent he couldn't get towing work because he refused to pay bribes.
Second Cal Twp official guilty of corruption
HAMMOND — Another former Calumet Township official has admitted to shaking down public employees for political cash and work.
Steven Hunter, 50, a son of former township Trustee Mary Elgin, pleaded guilty Thursday afternoon before U.S. District Court Judge Joseph Van Bokkelen to conspiracy and wire fraud counts.
Hunter's plea eliminates the need for a trial that had been scheduled this week. It comes three days after his mother pleaded guilty to her own role in the public corruption scandal. Elgin came to the courtroom Thursday to watch her son's guilty plea.
Hunter had been scheduled in court Monday too, but instead he was locked into federal custody after testing positive for drugs for the third time while on pre-trial release. He is expected to remain there until his sentencing Sept. 21.
That drug violation also hardened the terms of his potential sentence since the U.S. Attorney's office no longer will recommend he receive a reduction in his potential prison term.
He faces a maximum penalty of 60 years in prison, but the government has agreed to recommend he serve the minimum prison term under the federal guidelines.
Two other co-defendants in the case, Elgin's former secretary, Ethel Shelton, and Alex Wheeler, Elgin's former campaign manager, are maintaining their not guilty pleas and will be scheduled for trial at a later date.
Hunter served as his mother's information systems and technology boss.
The government said Hunter was adept at distributing his mother's campaign fundraising tickets to employees who had two choices, sell them or buy them with their own funds. That scheme yielded about 1 percent of Elgin's township's payroll.
Hunter said he also did other political work on public time.
The government estimates that illegal activity cost township taxpayers and residents between $15,000 and $40,000 during Elgin's administration from 2003 to 2014.
Corruption tainted East Chicago public housing projects
The East Chicago Housing Authority built the West Calumet Housing Complex in the early 1970s with little fanfare, as the authority’s director quietly took more than $100,000 in kickbacks for helping to steer various contracts related to the project to friends and associates, the director later testified.
One of the alleged bribes was for the demolition of a shuttered lead factory at the site, but it’s unclear from the many documents The Times reviewed whether former East Chicago Housing Authority Executive Director Benjamin Lesniak Jr. and other officials understood the health risks associated with the project.
What is clear is that city officials needed to build more public housing to keep millions of dollars in federal urban renewal money flowing into East Chicago, and industrial sites were not off limits.
Data released last summer showing lead concentrations of up to 237 times the Environmental Protection Agency’s allowable limit for residential use in the soil at the complex have raised serious questions about why the complex was built at all on the former Anaconda factory site at East 151st Street and McCook Avenue. More than 1,000 residents at the complex, including some 680 children, have been ordered to relocate.
The future also remains uncertain for the hundreds of residents who own homes in the middle and eastern parts of the Calumet neighborhood, many of whom face health problems and the possibility of falling property values.
The EPA last summer began a cleanup in those sections of the neighborhood, which were built in the shadow of industries that started operations as long as 100 years ago.
$126,000 in bribes alleged
John B. Nicosia ranked urban renewal among his top priorities during his 1963 campaign for mayor, but by 1969 — after criticizing the slow pace of redevelopment — his administration ended a 15-year relationship with a nonprofit foundation established to oversee the program.
The nonprofit Purdue-Calumet Development Foundation continued working on housing plans after the split, but the city charted a new course.
Part of that course, with regard to construction of public housing, was fraught with corruption, Lesniak testified at the 1976 trial of West Calumet Housing Complex builders Lawrence Bursten and Solomon Seidel.
Lesniak first discussed specific payoff amounts for the West Calumet Housing Complex contract with the East Chicago Development Corp. in December 1969. Bursten was a partner in the company at the time, and Seidel became a partner in 1970, records show.
Lesniak testified that Nicosia in December 1969 arranged for a $60,000 kickback from the builders, and asked Lesniak to act as a conduit for the payoff. Nicosia met the builders through a Milwaukee businessman involved in urban renewal.
After discussing the $60,000 payoff with then-City Attorney Jay Given, Lesniak and Given agreed Lesniak should go back to the builders to ask for an additional $40,000, according to a trial transcript. Given urged Lesniak to seek the additional money, because Given feared Nicosia wouldn’t give him his “fair share” of the $60,000 payoff, Lesniak testified.
The builders paid $20,000 of the agreed-on $100,000 payoff in cash in May 1970, a month before the East Chicago Housing Authority, U.S. Department of Housing and Urban Development and East Chicago Development Corp. signed a contract for the West Calumet project, Lesniak alleged. Construction began that fall.
Lesniak testified he divided $8,000 from that first payment between himself and Given, and gave the remaining $12,000 — $4,000 each for himself, then-City Controller Robert Pastrick and Given — to an associate to start a travel agency called Travel Associates. Lesniak said Given and Pastrick knew it was bribe money.
Nicosia, Given and Pastrick all took the stand and said they neither discussed soliciting bribes with Lesniak, nor took any money from him. Given admitted he owned 50 percent of Travel Associates, and Pastrick admitted he initially was listed as an officer of the company. Both denied taking any money out of the business.
Lesniak said he received the rest of the $100,000 cash bribe in seven more payments, and went back to Bursten and Seidel two more times in 1971 to secure another $26,000 in kickbacks for himself.
He also testified he took a $5,000 bribe on behalf of himself and Given for steering a contract to demolish the abandoned factory buildings at the West Calumet site.
Jack Slaboski, one of the owners of Industrial Development Corp., told the jury he didn’t pay Lesniak bribes for the demolition contract. However, Slaboski did offer a description of the site.
“Our contract read we were to demolish everything that was visible, and as fate would have it, we were digging through and we came across, in the dirt, we came across a stone slab that was 6 feet deep, I don’t know how big around, 20 feet across, it ran 200 feet in one direction.
“It was an old lead plant, somebody said —,” he continued, before U.S. District Judge Allen Sharp cut him off by saying, “Whoa. Whoa. Let’s get on with the lawsuit.”
The site of the West Calumet Complex had been eyed for public housing perhaps as early as 1963, Nicosia’s first year in office, according to Purdue-Calumet Development Foundation records.
In addition to Indiana Harbor, the foundation had set its sights on eliminating blight in West Calumet and planned about 50 units of nonprofit or public housing at the site of the old Garfield School, according to the foundation’s annual reports. A fire in 1959 destroyed Garfield School, and the city anticipated counting the cost of the new Carrie Gosch School, three blocks to the west, toward its required one-third share of urban renewal funding for the neighborhood.
The foundation's 1963 report said, “The development of the (Garfield School) site and that of a substantially vacant area in the southwest corner of the project will provide adequate relocation resources in advance of displacement of families in the rest of the neighborhood.”
Nicosia appointed Lesniak executive director of the newly formed East Chicago Housing Authority in March 1965. The following month, then-City Controller Pastrick told the Chicago Tribune the city planned to speed up urban renewal in the Harbor and begin construction of public housing.
The city’s first relocation site — the Cal-View Apartments — became tied up in court, delaying the Harbor project. Nicosia told the Chicago Tribune in April 1965 that urban renewal in West Calumet would be more organized than the Harbor project, because he didn’t want another “battlefield.”
In 1966, questions arose about a possible conflict of interest as Lesniak sought re-election to a third two-year term in the Indiana House of Representatives, while also acting as housing authority director.
Latin-American and African-American leaders contended Lesniak was violating federal law by holding both posts, and Republicans pushed for an investigation, according to several 1966 Hammond Times stories.
Lesniak told a Times reporter he had legal opinions saying he could hold both posts but would give up his $10,000 salary as housing authority director.
Lesniak was seated in the House that year after the state’s attorney general issued an opinion concluding the duality was not illegal.
TIMELINE: A look at East Chicago's early days, development
Early Region land investor Jacob Forsythe sells 8,000 acres, including the Indiana Harbor and East Chicago areas, to Charles Beatty Alexander, who forms the East Chicago Improvement Co. and sells bonds to a group of British investors.
East Chicago Improvement Co. defaults; Forsythe forecloses.
All East Chicago land claims are combined in the Calumet Canal and Improvement Co. and the Standard Steel and Iron Co., both headed by Civil War hero Gen. Joseph Thatcher Torrence."
Graver Tank Works, the city’s first industry, is established.
Chemical company arrives
Graselli Chemical Company is established. The site at the northeast corner of the Grand Calumet River and Ship Canal is later purchased by E. I. du Pont de Nemours and Co.
A city in panic
East Chicago becomes a city. The Panic of 1893 sets off the worst economic depression in U.S. history.
Indiana Harbor construction begins
Construction begins on a harbor, ship canal, the Inland Steel mill and “Twin City,” now know as the Indiana Harbor section of East Chicago. The population in the Harbor almost quintupled in the next 10 years.
East Chicago Co. control
The East Chicago Co. takes direct control of residential and city planning.
Charles Hotchkiss opens the Indiana Harbor Belt Railroad. Carl A. Westberg, of the East Chicago Co., begins extending the canal’s south leg two miles from the fork. The canal was completed in 1910. The developments help to bring in many new industries.
USS Lead construction begins
Delamar Copper Refinery Co. begins construction on majority of buildings that would later come to be known as USS Lead at 5300 Kennedy Ave. The facility operated as a copper smelter until 1920, when it was converted into a lead smelter.
Baldwin Locomotive plans, backs out
Baldwin Locomotive announces plans to build a plant in East Chicago, setting off a scramble for land. Baldwin buys 375 acres in Calumet-Kennedy Land Co. subdivision, now known as East Calumet. Baldwin later decided not to build.
Lead manufacturing begins
Manufacture of lead arsenate insecticide begins at the future DuPont East Chicago facility. Production continued until 1949.
East Chicago Co. sells to International Smelting and Refining Co. the 64 acres where the West Calumet Housing Complex and Carrie Gosch Elementary School would later be built. International was a subsidiary of the Anaconda Copper Co. The property was divided into two parts in the 1940s, with lead processing continuing on the southern part.
Lead plant ground broken
Ground is broken for the International Lead Refining plant. The plant opened six months later. It produced common lead, corroding lead, antimonial lead, and Dore bullion, records show.
Canal work continues
An ad in the Hammond Times says work on the Indiana Harbor and Ship Canal is continuing. The outer harbor and canal were constructed by the East Chicago Co. and other property owners.
An ad in the Hammond Times says Anaconda has three subsidiaries in East Chicago, including the International Lead Refining, Anaconda Zinc Oxide and Anaconda White Lead plants.
Anaconda Copper Co. acquires International Smelting and Refining Co. and continues to operate it as a wholly owned subsidiary. The International Lead Refining company was dissolved in 1934, according to Federal Trade Commission records.
African-Americans begin arriving in the Harbor to work at Inland. Mexicans arrived after World War I, creating the densest population of Mexicans in the United States.
A steel strike leads to racial tensions between white European immigrants and blacks and Mexicans who replaced them in the mill.
The Delamar Copper Refinery Co. property was purchased by U.S. Smelting Refinery and Mining and later by USS Lead.
Housing boom in 1920s
The city sees a housing boom, which required hauling in and resurfacing the entire area with black dirt and fertilizing trees so they would take root under the sand. Simple industrial housing in the Calumet section included 17 buildings owned by the Harbison-Walker Refractories and International Lead Refining’s bunk house for emergencies. Racial tensions continue, and the KKK in 1923 holds several meetings in East Chicago. Blacks live mostly near their jobs, including Grasselli (Calumet), American Steel Foundries and the metal refining plants (New Addition and Calumet), and Inland Steel (Block-Pennsy).
The stock market crash ushers in the Great Depression, leading to a reduction in demand for workers in city industries. American Legion Post 266 leads an effort to pay the way back to Mexico for Mexicans who choose to go. Churches take special collections, and the township eventually pays for their train fare. By the end of 1932, about 1,800 Mexicans had been repatriated to Mexico from East Chicago.
By this year, most of the homes in the West Calumet are completed. About 50 percent of the residences in East Calumet are standing.
Steelworkers strike. Blacks begin fighting for civil rights, “demanding to be seated anywhere in the local theaters, not just on the right-hand side, and seeking integrated participation in all school events.”
International Smelting and Refining Co. conveys to the Eagle Picher Co. the southern part of the future West Calumet Housing Complex property.
The Anselm Forum is established to improve relations among cultures, races, nationalities and religions.
More lead in E.C.
Chicago Daily Tribune reports “Eagle Picher moves white lead unit to East Chicago.” It said, “The sales and administrative personnel has moved into a modern building on the 37-acre property acquired a year ago. White lead for use in oil, paste, and ready to use paint will be produced at the plant. It also has facilities for manufacture of lead and zinc products for the paint, rubber, storage battery, ceramic, and chemical industries.”
Housing Act passed
The Housing Act of 1949 is passed, laying out a goal to build 810,000 public housing units within six years. It would take about 20 years to accomplish that goal.
DuPont E.C. stops lead manufacturing
DuPont East Chicago facility east of USS Lead and south of East 149th Place stops manufacturing lead arsenate , EPA records show.
International Smelting and Refining Co. conveys to Mid-West Tar Products Corp. a parcel of land where the northern part of the West Calumet Housing Complex and Carrie Gosch Elementary School would later be built.
More land conveys
The Eagle-Picher Co. conveys to Robinson Brothers & Co. Inc. the southern part of the future West Calumet Housing Complex property.
Housing Act expansion
The Housing Act of 1954 expands slum-clearance and redevelopment programs into the Urban Renewal program by including federal assistance for rehabilitation and conservation of blighted and deteriorating areas.
Purdue-Calumet Development Foundation incorporated
The Purdue-Calumet Development Foundation is incorporated and opens its officers the following year. Foundation documents say, "It became evident that some mechanism was needed through which competitive individual industries could cooperate in the use of their resources in solving the community redevelopment problems. Similarly, it was recognized that the same mechanism should permit the contiguous, autonomous cities also to cooperate in order to provide access to land areas needed for the broad solution of the housing, population, and racial problems.”
The northern and southern parts of the future West Calumet site are convey separately to Continental Foundry & Machine Co. The same year, Continental conveyed the properties to the Blaw Knox Co.
Fire destroys Garfield School
The former James A. Garfield School is destroyed by fire. The Garfield school was at the southeast corner of 148th Street and Melville Avenue. It was replaced in 1959 with Carrie Gosch Elementary School, which was built three blocks to the west.
E.C. buys site for Gosch
Blaw-Knox sells the site for Carrie Gosch Elementary School to the School City of East Chicago for $75,000.
East Calumet near completion
Most of the homes in East Calumet are standing.
'Problem areas' targeted
The Purdue-Calumet Development Foundation targets three “special problem areas,” or residential areas that “exhibit concentrations of blight, deterioration and excessive land coverage.” They are the Indiana Harbor area, which is under active study as Urban Renewal Project No. 1, along with West Calumet and Michigan Avenue New Addition. Among the redevelopment commissioners listed in the Purdue foundation’s 1959 annual report was Jack Slaboski, the businessman Benjamin Lesniak Jr. accused of paying him and Jay Given kickbacks for a demolition contract for the shuttered Eagle Picher lead factory buildings.
The original Carrie Gosch School was dedicated. The School City of East Chicago later constructed a new school building next to the site of the old building.
West Calumet plan submitted
An urban renewal plan for West Calumet is submitted to the the Urban Renewal Administration of HHFA for review. The agency in 1958 had reserved a capital fund grant of $4.395 million, pending submission and approval of a final project report.
Cline Avenue expressway
Ground is broken for an overpass over U.S. 20 to start the Cline Avenue expressway.
A comprehensive revision of East Chicago’s zoning code was adopted by the City Council. The mayor approved the code the following day. Zoning maps show the land where the West Calumet Housing Complex was later built was owned by Robinson & Co. and zoned for heavy industrial use. No change in that zoning designation appeared to be contemplated.
Plan deemed unfeasible
The federal government tells East Chicago its plan to redevelop West Calumet is not feasible. Further study is put off until 1961.
Indiana Harbor Renewal
Execution of the Indiana Harbor Renewal Project begins.
Following a review of the renewal plan for West Calumet, the federal government requests a more detailed study of structures proposed for rehabilitation. A framework for a new plan is approved in the fall.
West Calumet changes approved
The Purdue foundation’s annual report for 1962 reveals the West Calumet project “was originally timed so that the expenditures for the building and equipping of Carrie Gosch School could be credited toward the city’s ⅓ share of the cost.” The $4.395 million set aside in 1958 is still in effect pending program development. The federal government approves changes to the West Calumet plan, and the city rechecks 128 properties slated for rehabilitation. Further work is put on hold pending progress on the Harbor redevelopment program.
Nicosia takes over
John B. Nicosia takes over as mayor. Jay Given takes over as East Chicago city attorney.
Lesniak Jr. appointed executive director
The East Chicago Housing Authority is created, and Benjamin Lesniak Jr. is appointed its executive director.
City Controller Robert Pastrick tells the Chicago Tribune that East Chicago hopes to speed up progress on the Indiana Harbor renewal project and construction of public housing. About 1,450 families are in need of relocation because of urban renewal in the Harbor, a Purdue Foundation official says.
'I don't want another battlefield'
Mayor John Nicosia tells the Chicago Tribune the next city plan for an urban renewal project in the West Calumet area will be more organized. "I don't want another battlefield like we had this time," he said. "The people were so darn confused they didn't know what was going to happen to their homes." The federal Urban Renewal Administration withdraws $3.6 million for the West Calumet project because planning was too slow, though the city can reapply for the funds.
1966 — HUD approves $3.9 million in federal loans to the East Chicago Housing Authority for 212 units and $593,754 to build three neighborhood centers. The city contributed $296,830.
Cal-View project nears completion
Part of the 255-unit Cal-View project is ready for occupancy. The remainder of the 15-building, $3.75 million project was completed in 1967.
Lesniak's roles questioned
Hammond Times reports ethnic factions, including Latin American Democratic leaders and the “Negro” community, contend the federal government has said Benjamin Lesniak Jr. cannot serve both as a state representative and director of the East Chicago Housing Authority. Lesniak says he has legal opinions that say he can hold both posts but will give up his salary as housing director.
Lesniak investigation requested
Hammond Times reports U.S. Civil Service Commissioners have been asked to investigate federal law violations in the posts held by Ben Lesniak. The request was filed by Donald E. Nelson and Jerome Riskin, both Republican candidates for state representative.
Hammond Times reports the Rev. R. Donald Weaver resigned from the East Chicago Housing Authority commission after his motion to order Benjamin Lesniak Jr. to resign as executive director of ECHA was not seconded. Weaver said “political influence” in the authority’s operation forced him to resign.
Lesniak in Trib
The Chicago Tribune reports Benjamin Lesniak Jr. said East Chicago was antagonistic toward public housing in the 1940s but has adopted it because of relocation problems caused by the urban renewal project in the Harbor. The city has a shortage of undeveloped land, he said. “We can either tear down existing deteriorating structures and replace them with public housing units or we can construct them in vacant areas which are surrounded by industries, and undesirable residential areas," he said. The majority of the residents in public housing will be African-American or of Latin American descent, he said.
Bowen asks Lesniak to give up post
Hammond Times reports Otis R. Bowen, speaker of the Indiana State House of Representatives, asked Ben Lesniak to give up one of his posts.
Ground is broken for the first four of 153 medium-priced homes near the new Inland research center. Also, HUD approved another 570 public housing units in the Harbor at an estimated cost of $7 million.
Lesniak takes seat
Ben Lesniak Jr. is seated in the House after Attorney General John Dillon offers a preliminary opinion that it's not illegal for Lesniak to serve as both director of a city housing authority and as a state representative.
Housing and Urban Development Act of 1968
The Housing and Urban Development Act of 1968 is passed, establishing HUD as a cabinet-level department. President Lyndon Johnson sets ambitious housing goals, and nationwide public housing starts begin to rise.
E.C. plan nears approval
Changes to East Chicago’s urban renewal plan are reviewed and returned, and HUD informs the city approval depends on the city building more relocation housing for low-income families.
Ground is broken for a 108-unit 10-story building for the elderly at 136th and Pulaski streets. The building is the James Hunter Senior Building.
Construction begins on a moderate-rental project, 120 units sponsored by St. Luke’s A.M.E. Church. It is scheduled for completion in mid-1969.
Lesniak meets Bursten
Former East Chicago Housing Authority Executive Director Benjamin Lesniak Jr. first meets West Calumet Housing Complex builder Lawrence Bursten in former East Chicago Mayor Nicosia’s office. Lesniak later testified he showed Bursten and another partner in the East Chicago Development Corp. around the city and discussed their ability to pay kickbacks to city officials.
Purdue-Calumet Development Foundation
The Purdue-Calumet Development Foundation reports 1,528 families have been displaced since the inception of the city’s urban renewal program, and 1,175 have been relocated. More than 64 percent of the relocated families stayed in East Chicago.
E.C. plans to end contract with Purdue-Calumet Development Foundation
Hammond Times reports East Chicago officials plan to end the city's contract with the Purdue-Calumet Development Foundation as of April 1. City Attorney Jay Given said part of the problem in the Harbor was “the bad stuff was cleared away but marginal buildings were left.” He said a new plan must attract private investors as well as federal money.
Bunsa won't fold his tent
Hammond Times reports Purdue-Calumet Development Foundation Thomas Bunsa says he won’t fold his tent despite takeover April 1 by a new renewal plan and developer. Bunsa warned the foundation had been trying to get a new plan approved for years, but “the whole problem lies in not having enough housing for relocating the people.”
Lesniak begins conspiracy with John Telander to take bribes for the contract to build the Nicosia Senior Building on the site of the Famous Manufacturing plant on Railroad Avenue.
Lesniak discusses payouts
Lesniak first discusses specific payoffs amounts totaling $100,000 for the contract to build the West Calumet Housing Complex.
HUD and the East Chicago Housing Authority enter into an annual contributions contract, reserving money to build a $13 million 608-unit complex on 38 acres off 151st Street, the site of the current-day West Calumet Housing Complex site. This plan was scrapped months later, after HUD decided against approving initial plans. A new $13.3 million plan for 346 units was approved in June.
Blaw-Knox Co. conveys land
Blaw-Knox Co. conveys to the East Chicago Housing Authority two contiguous parcels of land generally bordered by the ship canal to the west, 151st Street to the south, McCook Street to the east and the Carrie Gosch School site to the north. The parcel on the north end of the site is further divided in January 1974, when the housing authority transfers a tract to the city for use by the Parks and Recreation Department.
Spring to fall 1970
The vacant former Anaconda lead factory buildings are salvaged and demolished.
Lesniak receives $20,000 in cash from East Chicago Development Corp. as part of the agreed-upon bribe, he later testified. He gave an associate $12,000 to be deposited into an account for a travel agency. The $12,000 represented $4,000 each for his, City Controller Robert Patrick’s and City Attorney Jay Given’s share of the seed money for the agency. The associate contributed his own $4,000. Both Pastrick and Given later testified they didn't talk to Lesniak about kickbacks or take any money out of the travel agency.
Construction agreement signed
Lawrence Bursten, Joseph Futowsky and others signed a construction agreement between the East Chicago Housing Authority and the East Chicago Development Corp. for Housing Project 29-6, the indictment against Bursten and Seidel says. The project would become known as the West Calumet Housing Project.
West Calumet construction agreement
East Chicago Development Co., East Chicago Housing Authority and HUD reach an agreement for construction of the West Calumet Housing Complex.
Lesniak executes a purchase agreement with Telander Brothers Construction Inc.
East Chicago Development Corp. partners deliver a $20,000 check payable to an East Chicago businessman, who passes the money on to Lesniak. The businessman was an unindicted co-conspirator in the case against Bursten and Seidel.
HUD sends a letter to Mrs. Rae Goldsmith, chairman of the East Chicago Housing Authority, which says: “There apparently have been numerous violations of various provisions of the annual contributions contract by your authority in connection with your administration of the construction of project IND-129-6, East Chicago. This, therefore, is to notify you that the limited waiver relative to your local approval of change orders is hereby rescinded until further notice … .”
Bursten and Seidel sign a $6,000 check that also is passed along to Lesniak through another unindicted co-conspirator.
John Telander writes a $4,513 check to an unindicted co-conspirator, who passed the money on to Lesniak.
Pastrick becomes mayor
Robert Pastrick becomes mayor.
1972 and 1973
USS Lead is converted to a secondary smelter; instead of refining lead ore, the facility begins recovering lead from scrap metal and automotive batteries.
Conspiracy involving Lesniak, Telander ends.
Conspiracy by Benjamin Lesniak and West Calumet builders Lawrence Brunsten and Solomon Seidel ends.
Lesniak steps down
Benjamin Lesniak Jr. steps down as director of the East Chicago Housing Authority.
Nixon terminates urban renewal program
President Richard Nixon terminates the urban renewal program.
USS Lead expansion
USS Lead starts an expansion program.
Housing and Community Development Act of 1974
The Housing and Community Development Act of 1974 is passed. The legislation permitted demolition, but focused on rehabilitation, not clearance. Section 8 programs began. Urban renewal programs were replaced with the Community Development Block Grant and Urban Development Action Grants.
Hammond Times reports Jay Given resigned as assistant city attorney.
Lesniak's broker’s license revoked
Hammond Times reports Benjamin Lesniak Jr.’s broker’s license was revoked because he failed to remit $31,000 in School City of East Chicago insurance premiums to a Chicago insurance company. Lesniak operated Consolidated Agency Inc. and Lesniak Agency Insurance and Real Estate, 4846 Indianapolis Blvd.
Lesniak is indicted in the Telander case. A superseding indictment is filed in August.
Lesniak pleads guilty
Lesniak pleads guilty in the Telander case, agrees to testify against Bursten and Seidel. His family also entered the federal witness protection program.
Jury convicts Bursten and Seidel
A jury convicts Bursten and Seidel of racketeering, conspiracy, interstate transport charges.
Fire damages Given's office
Hammond Times reports a fire damaged the office of attorney Jay Given, 3924 Main St.
Complaint against Given filed
A three-count verified complaint for disciplinary action against Jay Given is filed in the Indiana Supreme Court. Count I relates to the kickbacks Lesniak claimed he and Given took for demolition of the lead factory on the Blaw-Knox property in 1970. Count II relates to the kickbacks Lesniak claimed he paid Given out of bribes received from ECDC for the contract to build West Calumet. The complaint alleged that in addition to the $4,000 purported to be Given’s share in Travel Associates, Lesniak gave Given additional sums of $2,000 on two occasions in 1970.
Given disciplinary hearing
Given’s disciplinary hearing begins at the O’Hare Hilton in Chicago. Ben Lesniak doesn’t show up.
Given’s disciplinary hearing continues at the St. Joseph County Courthouse in South Bend. Again, Lesniak doesn’t show.
Findings of Hearing Officer filed in Jay Given’s disciplinary case. The counts involving Lesniak are dropped. Given faces a private or public reprimand for advice he gave to a Sanitary District official who was later convicted in a political-gift-buying scheme.
Given phased out
Hammond Times reports Given, who has been working as a legal consultant to East Chicago's Sanitary District, is being phased from city work because of some council members' objections to his involvement.
Given fatally shot
Given, 51, is fatally shot inside a vestibule at the Elks Club, 4624 Magoun Ave., during political fundraiser for N. Atterson Spann, a Calumet neighborhood resident who was later indicted by federal prosecutors for corruption. The investigation is hampered by evidence tampering, apparently within the East Chicago Police Department. Charges are never filed.
The chief justice of the Indiana Supreme Court orders the disciplinary case against Given be dismissed because of his death.
USS Lead found in violation
Indiana State Department of Health finds USS Lead in violation of state law because lead particles were found downwind of the plant.
In October 1966, Lesniak revealed to the Chicago Tribune the city’s apparent mindset on public housing.
East Chicago needed to build more public housing because of relocation problems caused by urban renewal in the Harbor, but land was scarce, he told the newspaper. He said the city could either tear down existing structures, leading to the displacement of even more people, or build public housing in “vacant areas which are surrounded by industries, and undesirable residential areas.”
Many of the public housing occupants probably would be African-American or of Latin-American descent, because “the public housing projects are being built in areas which are predominantly Negro and Latin,” he told the paper.
During the builders’ 1976 trial, FBI agent Dean R. Crabbs testified on cross-examination that Lesniak at one point told him the developers of the West Calumet Housing Complex initially decided to take an option on 15 acres of land owned by the Sinclair Refinery on Columbus Drive, just west of Roosevelt High School. That site was zoned single-family residential in late 1969, according to the trial transcript.
Lesniak told Crabbs that Nicosia — a medical doctor — became upset after learning the builders selected the Sinclair site and instead arranged for them to take an option on the West Calumet property, which was owned by Blaw-Knox Co. at the time, Crabbs testified.
The builders’ option on the West Calumet site was about to run out in early 1970 when HUD pulled the plug on a plan for 600 units, and the East Chicago Housing Authority ended up buying the property to keep the project moving, records show. HUD quickly approved a new plan for 346 units, according to trial testimony.
On the take
Because of the need for more public housing, Lesniak oversaw several of the city’s major projects before resigning from the ECHA in 1973.
Lesniak pleaded guilty in 1975 to charges alleging he first conspired in July 1969 to take bribes from John Telander, whose company built the Nicosia Senior Building, 4720 Railroad Ave. The 10-story building sits on the site of one of East Chicago's first industries, the former Famous Manufacturing plant.
In exchange for the plea deal in the 1975 case against him, Lesniak agreed to testify against the builders in the 1976 West Calumet bribery case.
Besides taking kickbacks for the construction and demolition contracts, Lesniak testified he took money from several people permitted by East Chicago Development Corp. to salvage scrap iron and copper from the abandoned factory buildings. Lesniak told federal investigators he received $5,000 from salvagers and took a prefabricated metal building from the site.
He pleaded guilty to a tax fraud charge in the 1975 Telander case alleging, in part, that he failed to report on his 1971 tax return ”income from the sale of a portable office building in the form of a short-term capital gain in the amount of $1,405,” records show.
In addition to the $100,000 cash bribe for the construction contract, Lesniak testified he received the $26,000 he later solicited for himself in checks, which he funneled through several unindicted co-conspirators.
Federal prosecutors presented evidence of the checks at trial, along with two lists — one written by Bursten and another with Seidel’s fingerprints on it — showing dates and payoff amounts.
Bursten and Seidel testified their signatures appeared on checks because they merely were loaning Lesniak money, but a jury didn’t buy their story and convicted them in May 1976. They were released from prison in 1978.
Lack of hard evidence?
The government presented no written evidence, such as the Bursten and Seidel lists, related to the alleged cash payoffs shared with Nicosia, Pastrick and Given.
John Leonardo, who tried the case as an assistant U.S. attorney and now serves as the U.S. attorney for Arizona, said Nov. 28 he couldn’t recall details about the 30-year-old case. When asked why Nicosia, Given and Pastrick were never indicted in connection with the West Calumet case, Leonardo said it could have been that the government didn’t think it had enough evidence to win convictions.
Lesniak served a short prison sentence in the Telander case, and his whereabouts have remained unknown since he entered the witness protection program after pleading guilty in 1975. Some in political circles said he died several years ago. A spokeswoman for the U.S. Marshals Service, which oversees the federal program, declined to comment on Lesniak's status.
Though federal prosecutors never charged Given, the controversial attorney at one point faced the loss of his law license in part because of Lesniak’s testimony in the West Calumet case, Indiana Supreme Court records show. After Lesniak twice failed to show up for Given’s disciplinary hearings in 1980, two of the three counts against Given were dropped.
Given was shot to death in 1981 at a political fundraiser in East Chicago; at the time, he was fighting a recommendation for a public or private reprimand related to advice he gave to a Sanitary District director convicted in 1977 in an illegal political gift-buying scheme, records show.
No charges were ever filed in Given's murder, despite a lengthy investigation.
A federal judge ordered Nicosia to prison after his 1979 conviction on perjury and tax charges related to a different kickback scheme, but he died before serving time.
East Chicago voters first elected Pastrick mayor in 1971. He never faced criminal charges in the West Calumet case, nor any case. His administration in 1999 spent more than $24 million to pour new concrete sidewalks, driveways and patios to curry favor with voters; six city officials later were convicted in the “sidewalks-for-votes” scandal.
Pastrick remained in office until 2004, after he lost a special election ordered because of vote fraud. A federal judge in a civil racketeering case later labeled him and his administration corrupt, and ordered them in 2011 to pay $108 million. Pastrick declared bankruptcy. When he died last month at age 88, many remembered him as a leader and political legend.
A county government history of bribery
CROWN POINT — Once upon a time, Lake County had a sheriff indicted for mail fraud.
Last week, it was Sheriff John Buncich, who has pleaded not guilty and is awaiting trial in January on allegations he solicited and received bribes from towing firms doing business with his department.
Three decades ago, it was Rudy Bartolomei, for wide-ranging bribery solicitation.
Bartolomei, better known to his friends as Rudy Bart, cooperated with federal investigators who sent many other high-ranking county government officials to prison under Operation Lights Out.
Bartolomei’s whereabouts have been unknown since he entered the federal witness protection program in 1986 at age 62, although the rumor among political circles is that he died years ago.
But between 1976 when he was first elected a Lake County commissioner and 1985 when he resigned as sheriff following a guilty plea in U.S. District Court, he was one of the best known and most powerful politicians in Lake County.
In his younger days, he helped his mother run the family’s grocery store in Gary’s Glen Park section. He became a Democratic precinct committeeman and worked eight years in the county assessor’s office.
A Times story about the new commissioner portrayed him as having a handshake and a warm greeting for the common man. He told a Times reporter, “I’m really excited about helping people, now. Most of the time, it is people asking for help, and you do your best to help them.”
He had a jar of licorice on his desk for his many visitors.
Years later, his other side was revealed in court testimony about forcing county employees to buy political fundraising tickets and shaking down those who wanted business with the county.
A federal court document recounts Bartolomei meeting a then-up-and-coming politician, Frank A. J. Stodola, who had just been elected county commissioner in 1980 and wanted to know if rumors about county government graft were true.
It states, “Stodola approached Commissioner Rudy Bartolomei on several occasions and asked Bartolomei where the commissioners made their money.”
Bartolomei answered that the cleaning service for the Lake County Government Center in Crown Point inflated its bills to the county to cover the bribes paid all three members of the Board of Commissioners at that time.
Bartolomei saw his opportunity to become the county’s chief law enforcement officer in 1983 when Sheriff Chris Anton died in office. A caucus of the county’s Democratic precinct committee members picked Bartolomei over Anton’s widow, Anna, to replace him.
A Times reporter asked him after his victory celebration about reports the FBI was looking into him. Bartolomei denied knowing anything about it.
Shortly after becoming sheriff, court documents state Bartolomei began offering protection to the owners of video poker machines, which were illegal at the time, but popping up at local taverns.
Bartolomei and other county police officials promised protection for those willing to pay, not knowing one of their petitioners was wearing a wire and recording conversations for the FBI.
A second federal investigation focused on Bartolomei’s stolen gun collection. U.S. Bureau of Alcohol, Tobacco and Firearms agents raided a safe in the Sheriff’s Department and seized 50 weapons and an unregistered .38-caliber handgun silencer.
After months of speculation, a federal grand jury returned a 15-count indictment against Bartolomei March 1, 1985, accusing him of:
Ordering five county employees in 1980 to assemble political signs for his re-election at public expense
Ordering three county employees in 1981 to do repair work on his summer cottage on Lake Michigan
Paying his housemaid with $2,300 from federal revenue sharing funds belonging to the county
Extorting political contributions from employees, including $650 from a heavy-equipment operator who asked Bartolomei for a raise
Bartolomei pleaded not guilty, blamed the allegations on political enemies and disgruntled county employees and wouldn’t compromise his ability to remain sheriff.
Six months later, he pleaded guilty to two felony counts, received a 28-month sentence, and was shackled and marched out of a federal courtroom.
Two months later, he was briefing federal investigators and a grand jury on the web of public corruption over which he and his fellow county officials had presided.
He would return to the federal courthouse over the years to testify as the government’s star witness, helping win convictions against a number of officials, including: County Assessor Michael Jankovich, county Commissioners Noah Atterson Spann and Frank A.J. Stodola and Michael Mokol Sr., chief of police under Bartolomei.
To protect his new identity outside the courthouse, he wore a Halloween mask resembling Skeletor, a character from the Masters of the Universe cartoons.
Portage Mayor Snyder indicted on bribery, tax charges
PORTAGE — Mayor James Snyder has been indicted in federal court in Hammond on bribery and obstruction charges.
U.S. District Attorney David Capp announced the indictments in a press conference Friday morning.
While the charges were being read from the federal courthouse in Hammond, Snyder met with city department heads and employees at his home.
U.S. marshals escorted Snyder, 38, into court about 3:30 p.m. Friday. He flashed smiles at his lawyers, Thomas Kirsch and Thomas Dogan.
He pleaded not guilty before U.S. Magistrate Judge Paul Cherry to felony bribery, extortion and tax dodging counts, which carry long prison terms if he is convicted.
He was freed on a $20,000 recognizance bond, but has to surrender his passport and firearms he owns. When the judge asked Snyder if he has a passport, Snyder smiled and said, “We’ve been looking for it since 7 a.m.”
Snyder’s administrative assistant, Amanda Lakie, said he would not be making a statement and directed The Times to Snyder’s attorney. Lakie said Snyder met with employees to encourage them to continue their work for the city.
“Mayor James Snyder has been under investigation for nearly two and half years and today was indicted on three counts,” said Snyder’s attorney, Tom Kirsch, of Chicago. “Mayor Snyder believed that this extremely lengthy federal investigation had been concluded without charges being sought. Today’s indictment comes as a complete surprise. This is particularly so because these charges are meritless. Mayor Snyder has always been cooperative with federal agents throughout the relentless investigation. Mayor Snyder looks forward to fighting these charges in a court of law and to complete vindication. Mayor Snyder and his family are grateful for the outpouring of support they have received from residents, friends, and family and asks that they continue to believe in him through this time.”
Federal authorities arrested and arraigned John Cortina, owner of Kustom Auto Body, 5409 U.S. 6, Portage, earlier Friday. He is pleading not guilty to his role in the scheme and is also free on bond.
Cherry set their trial to begin the week of Jan. 23, although the date could change if the defense needs more time to prepare.
The first charge names Snyder and Cortina.
Snyder and Cortina are both charged with a violation of the federal bribery statute. Snyder is alleged to have corruptly solicited and received two checks totaling $12,000 from Cortina, in exchange for a towing contract in the city of Portage, according to a press release from the U.S. Department of Justice. Cortina is charged with corruptly offering those checks to Snyder.
Cortina’s business was raided last week by Indiana State Police and U.S. Treasury Department agents. Cortina told The Times then that his business was not the subject of the raid, that a towing company which leases property from Cortina was being investigated.
Snyder is also charged with a second violation of the federal bribery statute. That count alleges that between Jan. 1, 2012 and Jan. 10, 2014, Snyder corruptly solicited and agreed to accept a bank check in the amount of $13,000 in connection with Portage Board of Works contracts, a Portage Redevelopment Commission project and other consideration, stated the release.
The final charge against Snyder alleges obstruction of the internal revenue laws. This count sets forth an alleged scheme, undertaken by Snyder between January 2010 and April 2013, to obstruct and impede the Internal Revenue Service’s collection of personal taxes he owed and payroll taxes owed by his mortgage business, First Financial Trust Mortgage LLC. Snyder is alleged to have diverted funds away from FFTM to a sole proprietorship he created, and submitted three forms to the IRS which failed to disclose, among other things, the existence of the sole proprietorship and its bank account – all during a time when the IRS was attempting to collect the aforementioned tax debt.
The indictment comes after more than two years of investigation by the FBI into the city and Snyder and less than two months after Snyder attempted to get the city’s Utility Service Board to pay some $93,000 in legal fees involving the investigation.
In September, Snyder had two checks cut by the department and sent to two legal firms without approval by the board. The legal firms allegedly returned the checks because they were not from Snyder directly. The funds were returned to the department and Mark Oprisko, City Council president and utility board vice chairman, called for an investigation by an independent attorney into the claims.
While state law allows Snyder to request the reimbursement it can only be done if he was cleared of the investigation and there were no impending indictments.
Oprisko said he had the “wind knocked out of me” when he heard about the indictments and was “disheartened,” thinking that the investigation was over a couple of months ago.
“It is a black eye to the city. The investigation is what it is. He is innocent until proven guilty. He still has a job to do. He has to pick it up and move forward,” Oprisko said, adding the same is true for city employees and other elected officials. “Our job is to serve the citizens of Portage, and we will continue to do that.”
“While this is a sad day for the city of Portage, Jim Snyder deserves his day in court,” said Portage Clerk-Treasurer Chris Stidham. “However, I am focused on ensuring myself and the City Council continue to lead Portage forward despite the mayor’s troubles. Now, more than ever, Portage needs good leaders. We are more than any one person and the issues of one won’t derail our progress.”
“Today’s indictment issued by the United States Attorney in connection to Portage Mayor James Snyder is deeply concerning,” said Portage Councilman Collin Czilli in a written statement, promising residents that city business will continue unimpeded. “However, like any other individual, Mayor Snyder deserves his day in court and the right to defend himself. As a city Councilman, I am of the mindset that we must allow the judicial process to continue and to not interfere in that process for political purposes.”
“These investigations are not over. Our public corruption team will continue its work, particularly into the towing contracts in both Lake and Porter counties,” Capp said in the press release.
Anyone with information related to these public corruption charges is encouraged to call the FBI at (219) 769-3719.
Times reporter Bill Dolan contributed to this story.
UPDATE: Former Lake Station mayor sentenced to 4 years
HAMMOND — The former Lake Station mayor who wagered and lost the public trust is going to prison.
U.S. District Court Judges Rudy Lozano and James Moody on Wednesday sentenced 47-year-old Keith Soderquist to 48 months, and ordered him to pay $4,184 in restitution to the city of Lake Station and $22,571 to the IRS.
Soderquist’s 58-year-old wife, Deborah Soderquist, was sentenced to 24 months in prison and was ordered to share in restitution payments. She ran Lake Station’s food pantry and was treasurer of her husband’s election campaigns.
The Lake Station couple misused tens of thousands of dollars from the mayor’s re-election campaign fund and the city’s food pantry account to gamble at nearby casinos. The former mayor received a 42-month sentence for that fraud.
He received an additional six-month sentence for attempting to cover up his stepdaughter Miranda Brakley’s embezzlement of Lake Station City Court money.
Federal prosecutors had asked that he be sentenced to prison immediately, but Moody agreed to allow him to self-report at a specified date. The former mayor is scheduled to have neck surgery Oct. 13.
However, Moody did give the former mayor a tongue lashing.
“You stole from the food pantry? That’s obscene. I’ve sentenced many politicians in my 40 years here, but what you have done. ... Your city is full of people who are unemployed, underpaid and on welfare. What the hell were you thinking of? Are you goofy? Answer me!” the judge demanded.
The former mayor answered “no.” Moody continued, “So what you did is all right?” Shame on you.”
Soderquist, who had served nearly eight years in office, came under state and federal scrutiny four years ago following a public feud between him and former Lake Station City Judge Christopher A. Anderson, who was elected to replace Soderquist in the mayor’s office.
Anderson fired Miranda Brakley, the mayor’s stepdaughter, for stealing money held by the court from those arrested and posting bond in Lake Station.
Soderquist defended his stepdaughter and supported efforts to abolish City Court. Anderson called for an investigation of the Soderquists.
Federal authorities discovered Keith and Deborah Soderquist lost more than $100,000 between 2009 and 2012 at casino slot machines. They made dozens of withdrawals during the three-year period totaling $35,304.25 from his campaign fund and $5,040 from the city’s food pantry account.
A federal grand jury charged Keith and Deborah Soderquist in 2014 with 11 counts of conspiracy, wire fraud and filing false tax returns for criminal misuse of the public funds and covering it up.
A jury last year also found the former mayor and his wife guilty after an eight-day trial of all counts.
Afterward, the government became aware the former mayor had installed in the Lake Station City Hall a system to secretly record telephone conversations and listened to about 30 of the recorded calls made or received by potential government witnesses.
The Soderquists have dropped plans to appeal their convictions, and the former mayor admits to his role in the telephone recording scheme under an agreement with the U.S. attorney’s office to forestall the government from filing additional charges against him or his wife.
Lawyers for both Soderquists argued Wednesday for leniency on grounds their health will deteriorate in prison. Deborah Soderquist suffers from diabetes, muscular dystrophy, degenerative bone disorders and a cancerous lesion on her left kidney.
Brakley, 35, of Lake Station, received six months home detention followed by two years probation July 7 for her guilty plea to the theft.
Lake County justice has had a drinking problem
Lake County's system of justice for drunken driving is receiving a new sobriety test.
State police recently began gathering records and conducting interviews into whether someone in Lake Station City Court intentionally withheld alcohol-related convictions over a four-year period from the Indiana Bureau of Motor Vehicles for inclusion on drivers' records — and all the consequences that imposes.
No one has yet been charged with criminal wrongdoing in that case. In Indiana, the charge is called operating while intoxicated, or OWI.
But three decades ago, an investigation by state and federal police called Operation Bar Tab bagged Lake County Court judges, a county clerk, a deputy prosecutor, a former director of the county court's alcohol counseling service and several minor court officials and attorneys.
They were convicted for their roles in fixing driving tickets, the bulk of them for drunken driving, for political favors.
Bar Tab, in connection with Operation Lights Out, a simultaneous federal investigation of non-court corruption, resulted in the conviction of more than 15 elected officials and county government employees.
Shaken Democrats at the time beheld the state replace two judges and the county clerk with Republicans, the first to occupy countywide offices in half a century.
Testimony from more than a dozen Operation Bar Tab trials and guilty pleas demonstrated drivers connected to Lake's sprawling patronage system could avoid the embarrassment of being judged in open court, and then fined, jailed, and having their licenses suspended and auto insurance premiums increased.
John Hoehner, a former U.S. Attorney for the Northern District of Indiana, is quoted in a 1986 Times story as calling this practice "an aged cancer that permeates the political system of Lake County and casts an ugly pall over its system of justice."
Birth of Bar Tab
Bar Tab began in the early 1980s under former U.S. Attorney R. Lawrence Steele who assigned a major role to his assistant, James Meyer. Both are now private lawyers.
Meyer recalls, "(State) troopers noticed they were arresting drunken drivers who they had arrested just six months earlier who shouldn't have had a license. Further checking showed one guy pleaded guilty, but nothing showed up on the police record."
They tracked the problem to Lake County Courts, created in the mid-1970s to put on the bench judges who had formal legal training. They replaced justices of the peace, quasi-judicial officials who weren't required to have law degrees to handle traffic violations.
However, these new judges, unlike their Superior Court counterparts, were elected through Lake's powerful Democratic party with all the partisan influences and obligations that come with having to marshal campaign funds and voter support.
Meyer said, "It wasn't the whole county, but certain individuals were known to, not so much stop a prosecution, but keep the records from going downstate ... if you bought $1,500 in (campaign fundraising) tickets."
Another former Assistant U.S. Attorney, Gregory Vega, complained in 1986 of "the use and sale of political tickets, which has been called the currency of corruption, and which has perpetuated the stigma of Lake County throughout the state."
A federal court document indicates that Bar Tab's earliest inroads came the summer of 1982 when Kenneth Anderson received a call from a Dan Mingo, complaining he had just been jailed for OWI. Anderson was a Crown Point barber who had an inside connection to the courts.
Anderson invited Mingo to the shop. They agreed to fix Mingo's problem for $1,600, much of which Mingo put in a blue envelope.
Anderson then called John Marine, a county courts administrator with access to court records. Marine was seen leaving the shop later that day with a blue envelope in his pocket.
Mingo was a state police informant. He was wearing a wire. The FBI had tapped the phone. The fabricated ticket was bait.
Anderson assured Mingo he wouldn't have to appear in court. But Anderson and Marine did — after they were indicted and brought to trial in 1984 in U.S. District Court.
The racketeering and mail fraud charges against them also alleged that a trucker who knew Anderson, got his driver's license back in the mail without ever appearing in court. Another trucker who did go to court, later said a deputy prosecutor there noted the trucker must know somebody, because he didn't have to go to jail or pay a large fine.
Marine's lawyer attempted to bolster his defense at trial by calling to the witness stand Lake County Court Judge Orval Anderson, no relation to Kenneth Anderson, to talk about court procedures.
Federal investigators believed Judge Orval Anderson, elected on a promise of being tough with drunken drivers, had presided over several of the fixed-ticket cases.
Orval Anderson was asked, under oath, if he ever disposed of drunken driving cases behind closed judicial chamber doors without a prosecutor present.
"No, no. Always prosecutors there," the judge answered, according to a court document.
Not only did the jury convict Kenneth Anderson and John Marine, a federal grand jury also indicted Judge Orval Anderson for lying under oath and obstruction of justice.
Months after that, Marine reportedly was cooperating with federal authorities to lighten his 20-year sentence. Bar Tab was picking up steam.
More indictments, convictions
Orval Anderson's trial, which ended in his conviction in June 1985, featured nine offenders accused of driving under the influence.
They testified Orval Anderson gave them breaks behind the closed doors of his judicial chambers, after they had contacted Lake County officials to petition Judge Anderson for leniency.
Former county Clerk John Krupa, former county Recorder William Bielski and then St. John Township Trustee Gerry Scheub, now a county commissioner, were among those who intervened for the offenders. The three testified for the government and were never charged with wrongdoing.
Bielski said officeholders were always asking one another for favors. Edward Lukawski, the county clerk, was called to testify at Orval Anderson's trial, but refused under his right against self-incrimination.
He was trying to avoid Orval Anderson's earlier mistake of boldly denying wrongdoing under oath. Nevertheless, the U.S. Attorney charged Lukawski seven months later of conspiring with judges and other court personnel to secretly dispose of at least 30 driving under the influence cases as personal favors, or in exchange for political fundraising tickets.
Lukawski's defense lawyer said Lukawski never solicited anyone to buy fundraising tickets, but accepted them when someone who benefited from a fixed case rewarded Lukawski for having done them "a good turn."
Indictments over the the coming months also included the following: Judge Steven Bielak and Robert Balitewicz, Bielak's court administrator; Lee J. Christakis, lawyer and occasional county courts judge; William Huber, a former county courts bailiff; Paul Kutch, former Gary police officer, county court bailiff and director of the county courts alcohol counseling service; defense lawyer Stephen Goot; and former Deputy Prosecutor Nick Morfas.
Bielak, Balitewicz and Morfas pleaded guilty. So did Huber and Kutch, who it later was revealed, had been working for several months undercover for federal authorities and wore body recorders in return for leniency.
Goot chose trial and was convicted of conspiring with Morfas to make 10 OWI tickets disappear under a scheme in which Goot challenged the legal validity of OWI tickets his clients received. A judge properly dismissed the tickets, but gave the prosecutor several weeks to file new charging documents.
Morfas used his position in the prosecutor's office to steal and destroy the case files associated with the dismissed tickets. No one noticed because of disarray in the prosecutor's office and the Lake County Courts records system; the dismissed tickets were never refiled, and the drivers were off the hook.
Jack Crawford, then prosecuting attorney for Lake County and now a private attorney in Indianapolis, said recently his office cooperated with Operation Bar Tab. He declined to comment further.
Christakis prepared for his trial by lining up at least 22 or 23 of his drunken driving clients to testify they never paid him to keep their record from going downstate. "Their records were already downstate," he recently recounted.
He changed his strategy when the federal trial judge dismissed some of the fraud counts against him. He and his defense lawyer thought the judge had essentially crippled the government bribery case. However, he learned too late the judge would permit the bulk of the of the government cases to go to the jury. "So there I was with the witnesses gone home," Christakis said.
The federal jury did acquit Christakis of a tax violation, but convicted him of two fraud and two obstruction of justice counts.
Attorneys convicted in the scandal lost their law licenses, as did Christakis.
But four years after Christakis' conviction, a federal judge overturned Christakis' fraud convictions on grounds Christakis never received money for anything improper.
Eight years later, the Indiana Supreme Court followed up by letting Christakis recover his law license. He is practicing law these days in Crown Point.
Christakis said, "(U.S. Attorney) Steele thought he was going to prove up bribery. He wasted a lot of investigatory resources."
Steele said recently, "The investigation was very successful in discovering what was going on at the time and taking steps to alleviate the problem. At least back in those days, the problem was solved."
Former Gov. Robert Orr, a Republican, appointed Republicans to replace the disgraced Lake County officials, including Kenneth Peterson as the first Republican county clerk in decades. Peterson initiated reforms to prevent future corruption, including closer tracking of traffic tickets. Previously, tickets were held in a file cabinet for a month before they were forwarded to court.
Former federal prosecutor Meyer said current electronic record-keeping has probably made it even more difficult for corrupt officials to lose or tamper with drunken driving cases.
Five years ago, the Indiana General Assembly voted to remove Lake County Court judges from partisan political elections. Its judges now will run for election without party labels.
Fresh problems convicting drivers of OWI?
A recent Times review of police arrests in 2014 in Lake County showed more than half of those arrested had their charges reduced from operating a vehicle while intoxicated to reckless driving, a lesser violation. This is unlike neighboring Porter County, where 81 percent were convicted of operating while intoxicated, The Times found.
Leal Hill, lead victim-services specialist for Indiana's Mothers Against Drunk Driving office, said, "We have had three calls in the last two years from concerned citizens who have expressed concern about leniency for drunk driving charges. Lake County is one place where we have received the most calls."
Hill said, "Over 300 people are killed in drunk driving-related crashes every year in Indiana. Thousands more are injured and thousands more are victimized, so for every one person killed in a drunk driving crash, 10 to 15 family members get a life sentence of grief.
"We have to show the public that if you drive drunk, we are going to take it seriously. You are going to jail, possibly prison, if you repeat. People are going to be more likely to designate a driver and drink responsibly, than if they think they are just going to get a slap on the wrist," Hill said.
Lake County Prosecutor Bernard Carter has said the sheer volume of cases, more than 800 in 2014 alone, compels his office to plea bargain charges down, or risk having most of the cases dismissed for failing to meet speedy-trial deadlines mandated by state law.
While such reductions are opposed by MADD, it is perfectly legal under the discretion the state permits local officials. But state law does compel local court officials to report traffic convictions and court-ordered driving restrictions to the Indiana Bureau of Motor Vehicles.
Carter initiated a state police investigation in May after discovering Lake Station City Court failed to report to the BMV a 2011 reckless driving conviction for Randolph L. “Randy” Palmateer, 37, business manager for the Northwestern Indiana Building and Construction Trades Council.
Carter said that wasn't an isolated incident, and that hundreds of convictions from that city court may not have been transmitted downstate between 2008 and 2012. State police have said they are gathering court records and interviewing potential witnesses in their ongoing investigation.
E.C. Council votes to remove Battle from office
EAST CHICAGO — The City Council on Monday voted to remove 3rd District Councilman Robert Battle from office.
The 8-0 vote followed a hearing that began at 9 a.m. Monday. At least six council members had to vote in favor of the motion for his removal in order for it to be approved.
Battle was represented at the hearing by his sister, Kim Maxey, who indicated he would appeal the decision.
Battle faces federal drug charges and is accused of fatally shooting Reimundo Camarillo Jr. on Oct. 12 in East Chicago. Battle has claimed self-defense in the shooting.
Battle, who was running unopposed, was re-elected in November while in Porter County Jail. He continues to be held there without bond while awaiting trial.
The council took the vote without discussion following the hearing in which attorney Joe Curosh made the case against Battle. Part of the evidence he presented included documents related to Battle’s arrest by state and federal officials.
Maxey spoke in support of her brother and said at one point a council decision to remove him would be appealed. Battle has 30 days to file an appeal.
“He has not been convicted of anything,” she told the council in regard to the criminal charges.
Curosh noted that Battle’s trial date is set for August and could be delayed again. He also said the “odds are he is going to be convicted.”
His only witness was former 3rd District Councilman James Ventura, who he questioned about the duties of a council member. Ventura talked about responding to residents in person as well as via other means, the importance of observing firsthand what was going on in the district and the duties of voting on ordinances, including the city’s budget.
Curosh said meeting minutes show that Battle has not been present since Oct. 12 and “there is no end in sight” in terms of when he may return.
Maxey said Battle “is well aware of what is going on in the district” and has been in contact with constituents, including by email. She also questioned whether proper procedures were being followed regarding holding the hearing and why council attorney Stephen Bower has not provided Battle with assistance.
A caucus of Democratic precinct committee members within the 3rd District will take place to select Battle’s replacement.
Van Til sentenced to 18 months in prison
HAMMOND | Former Lake County Surveyor George Van Til was sentenced Thursday to 18 months in prison for making his employees to do his campaign work on county time.
U.S. District Judge James Moody also ordered Van Til to serve three years on supervised release after he leaves prison and pay more than $26,500 in restitution to Lake County. He reports to prison April 30.
In his statement to Moody prior to the imposition of his sentence, Van Til admitted to wrong-doing, but also said he had accomplished much good during his time in office before finally breaking down in tears as his attorney Scott King patted him on the back.
"The legacy I hoped to leave -- I have none," said Van Til, who also referred to himself as a "broken person" whose "reputation is gone."
"I am sorry to the court, I am sorry to my family, I am sorry to the people who voted me into office time and time again," said Van Til.
He told the court he has lost 55 pounds in the last several months and has dealt with health issues. At the request of King, Moody will recommend Van Til serve his time at a federal prison in Terre Haute.
While agreeing he was guilty of the charges, Van Til resented what he described as embellishments made by the U.S attorney's office in regard to his action. He also told the court that he never took a bribe or threatened anyone.
King said if Van Til's entire body of work is considered, the good overwhelmingly outweighs the bad.
"His remorse is genuine, his pain is real," King said.
Assistant U.S. Attorney Philip Benson, however, said "the conduct of Mr. Van Til strikes a the very heart of why some people don't want to go into public service."
Benson said workers were "forced to break the law to keep their jobs and that is wrong."
Attorneys for the government and Van Til spent much of the day wrangling over the amount of the lost to the county from Van Til having employees do political work on government time and over whether Van Til should be given credit for acceptance of responsibility.
The government pointed to a document that contained a report of a phone call made to the FBI in June 2012 by Speros Batistatos, president and chief executive officer of the South Shore Convention and Visitors Authority. According to the report, Batistatos told of a conversation on a trip to a White Sox game where a worker in Van Til's office spent her time doing political work.
The document, which was not supposed to be disseminated, was given by Van Til to Gregory Sanchez, who went from being deputy chief surveyor to interim surveyor in December 2013 after Van Til pleaded guilty to the charges and resigned. Sanchez said he was asked by Van Til to give the document to Hammond Mayor Thomas McDermott Jr., which he did in late December just prior to a pre-caucus meeting to determine who was to become Lake County surveyor until the next election. McDermott was the Democratic Party's County Chairman at the time and ran the caucus.
Sanchez said Van Til "wasn't real happy" about Batistatos making the call. McDermott notified FBI agents after receiving the document and Bill Emerson Jr. was selected at the caucus to by Lake County Democratic precinct committee members to take over as surveyor for the next election.
Benson raised the specter the release of the report could have resulted in political retribution to Batistatos, whose board is comprised of political appointees, for doing the right thing in reporting what he believed was illegal activity to the government.
Under questioning from King, Sanchez said Van Til did not give him any direct directions of what to tell McDermott, who he indicated had been contacted earlier by Van Til. Van Til said he never threatened anyone. He indicated he was just surprised someone "could just pick up and willy-nilly call up an FBI agent."
Van Til, 67, was previously charged with six counts counts of wire fraud and aiding and abetting over a scheme in which he used county employees to do his campaign work on county time. He pled guilty Dec. 5, 2013.
Prosecutors said Van Til ordered at least three county employees to complete re-election campaign work for which the employees were compensated from the county's payroll between 2007 and 2012.
The crimes constituted wire fraud, in part, because the county employees received their pay through direct deposit, which constitutes an electronic transfer, according to prosecutors.
Van Til also was accused of telling an employee to swap out a county computer's hard drive to conceal evidence in case federal authorities ever made inquiries, although those charges were dropped in exchange for his guilty plea.
His guilty plea ended Van Til's 42-year career.
Van Til's attorney asked Van Til be sentenced to a combination of probation and home detention because of the work he has done for Lake County residents and his poor health. The government provided documents that indicated Van Til's medical conditions could be accommodated while in prison.
Highland Clerk-Treasurer Michael Griffin, who was one of a number of local politicians and others who wrote letters in support of Van Til, testified at the sentencing hearing. He said Van Til was supported him early in his career and was also a supporter of Lake County becoming a member of the Shared Ethics Advisory Commission. He said he never thought he would find Van Til in the situation he was in Thursday.
Philpot sentenced to 18 months for public corruption
HAMMOND | Former Lake County Clerk Thomas Philpot was sentenced to 18 months in prison Thursday for stealing thousands of dollars in public child support incentive funds over which he had control.
Philpot, who also served as Lake County coroner, was ordered to surrender April 3 to a federal correctional camp in Pekin, Ill. Federal defendants usually serve at least 85 percent of their sentence, which means Philpot likely will spend at least 15 months in prison.
Senior U.S. District Court Judge James Moody asked himself out loud, why did Philpot, an intelligent, well-trained man familiar with the proper workings of local government commit his crime, and concluded that the evidence pointed to "arrogance, greed and a warped sense of entitlement."
Philpot, 55, a podiatrist and attorney, served 10 years as Lake County coroner and six years as county clerk between 1992 and 2012.
"I apologize to the court and all the citizens of Lake County. I should have been more careful and done more to ensure I deserved these bonuses," an emotional Philpot said during his two-hour sentencing hearing, attended by a number of family and friends.
He also apologized to his family. "The thought of being separated from my son just kills me," Philpot said.
Philpot will be analyzed for mental health and alcohol abuse issues at the request of defense lawyer Kerry Connor. After he serves his term, he will spend two years on supervised release, similar to parole.
Federal prosecutors said Philpot began making plans to pocket bonuses from federal IV-D child support incentive money within months of taking office and taking control of the money.
State Rep. Shelli Vandenburgh, D-Crown Point, who as a deputy under Philpot, testified she warned Philpot that IV-D money was meant only to compensate deputy clerks who performed daily work of recording and accepting child support payments to needy children.
However, Philpot drew up a list of bonus recipients and ordered the money be paid, including $24,000 to himself between 2004 and 2009.
Earlier this week, Moody threw out two felony counts related to bonuses Philpot pocketed prior to 2008 on grounds there wasn't enough evidence to prove he knew taking the bonuses was illegal.
However, he remains convicted of three other theft and mail fraud counts for bonuses after that date because Philpot admitted to his lawyer at the time he thought his supplemental pay might be problematic.
Assistant U.S. Attorney Philip Benson said Philpot violated state law by declining to get the approval of the seven-member County Council to boost his pay with the IV-D money.
Philpot only attempted to get council approval in 2008 and even withdrew that request immediately after Councilwoman Christine Cid questioned the legality of Philpot's maneuvers.
Philpot and his lawyers argue he was misled by an opinion from his longtime attorney David Saks that the IV-D bonuses were legal, but Benson said Saks later admitted the opinion was in error because Philpot withheld important information from him.
Benson adds Philpot also gave large, unnecessary bonuses to a group of favored employees "who did the least for the IV-D program" bonuses to camouflage his own enrichment.
Connors said Philpot already had suffered enough in terms of public humiliation and loss of his public and professional careers.
Philpot's wife, Anne-Marie, said Philpot became so depressed she had to encourage him to even get out of bed and shower, she found him walking in circles in his driveway and that he began drinking alcohol heavily.
She wrote in a letter to the court he has undergone therapy and hasn't had a drink in months.
Former E.C. Mayor Pabey sentenced to 5 years in prison
HAMMOND | East Chicago's most recent former mayor joined the ranks of about 10 other city politicians Friday who have been sentenced for committing federal crimes.
A judge sentenced George Pabey, 61, to five years in prison and ordered the former chief of police to pay a $60,000 fine for his role in a conspiracy to steal money from East Chicago.
"You, sir, did not make a mistake," Senior Judge James Moody said before a packed courtroom. "You knew exactly what you were doing, and you knew exactly what you wanted to achieve. Money."
Pabey was indicted last year after pouring government funds and city labor into remodeling his home in Gary's Miller Beach neighborhood -- and putting the house on the market for more than twice what he paid for it. The assessed loss to East Chicago was about $14,500, which Pabey posted in restitution prior to the hearing.
In September, a jury found Pabey and a former city supervisor, Jose Camacho, guilty of conspiracy and theft of government funds. In April, Camacho was sentenced to 2 1/2 years in prison with a $50,000 fine.
Pabey's sentence was more than his calculated 27- to 33-month guideline range, which Moody said was necessary to prevent the spread of the region's public corruption epidemic. The enhanced sentence also was a result of prosecutors' argument that Pabey's wife, Hilda, lied under oath to protect her husband.
Assistant U.S. Attorney Gary Bell quoted from trial testimony in which Hilda Pabey claimed to have bought with cash items found at the Gary home – but she did not have the receipts to prove it. Bell contrasted her words with photos and receipts showing Camacho bought those same items using a city account.
Pabey's attorney, Scott King, said no intentional misrepresentations were made, and the serious illnesses of some family members at the time caused a memory lapse. King called the accusations "petty" and "vindictive."
But Moody agreed with the prosecutors.
"Her language, her demeanor, did not indicate she did not remember things or was confused," Moody said.
In arguing for a higher sentence, Assistant U.S. Attorney David Nozick said Pabey took advantage of the trust voters had placed in him to end the corruption that had plagued the city for decades.
While East Chicago was facing severe budget issues, laying off 50 city employees and forcing others to retire, Pabey gave his friend Camacho a raise and siphoned off taxpayer money to finish his kitchen and put a bar in his basement, Nozick said.
To give the case "context" before reading the sentence, Moody read excerpts from a 2005 Times article on Pabey's victory in the mayoral race. Public figures and residents at the time were quoted describing their hopes in Pabey breathing life back into the city.
King asked Moody to consider Pabey's life of public service, as well his devotion to family, in determining his client's fate. Moody said he read the 28 letters supporting Pabey but would not give much weight to the good he did while in office because it was expected of him.
At the end of the two-hour hearing, Pabey sat expressionless, staring at his folded hands while Moody explained his reasons for the 60-month sentence.
In the next 14 days, King said he will file an appeal and request that Pabey maintain his freedom while the case makes its way through the appellate court.
"I have a lot of respect for Judge Moody, but I have to say in this particular case I could not disagree more," King said. "We have a great deal of confidence (the case) will be viewed differently in the court of appeals."
King has argued Pabey did not know that Camacho used city money on the house or that city employees were working there while on the clock. He said Pabey was paying Camacho with cash or checks to work on the home during off hours, as Camacho did not have a structured day in his 24-hour, on-call position.
If Pabey's request to be released pending the appeal is denied, he must report to prison June 1.
And while some appeared to cry after the hearing, others said they were happy justice was served.
"He ruined the reputation of East Chicago when it could have been restored," said Jesse Gomez, vice chairman of East Chicago's Democratic Party.
Dozier Allen gets 18 months in corruption case
HAMMOND | Citing former Calumet Township Trustee Dozier Allen
Jr.'s 36-year record of public service and failing physical and
mental health, Hammond federal Judge Philip Simon sentenced the
79-year-old fraud convict on Tuesday to 18 months in federal
prison. The term falls one year short of the low end of the
congressional advisory sentencing guideline range.
Allen, who suffers from hypertension, bipolar disorder and an
as-yet unclear condition involving blood-clotting, will have 120
days to surrender, an unusually long delay Simon granted because of
Allen's medical uncertainty. Allen will split a $143,000
restitution bill with his three co-defendants, two of whom also
were sentenced Tuesday. Simon sentenced Allen to two years of
supervised release after his prison term closes.
Simon sentenced former top deputy Wanda Joshua to 15 months in
prison. The judge placed former aide Albert Young Jr., who signed a
plea agreement and admitted guilt, to two years on probation. The
final former deputy, Ann Marie Karras, is slated for sentencing
Defense lawyer Scott King said Allen, who continues to deny
criminal wrongdoing, plans to appeal his conviction. King had asked
Simon to put Allen on home detention, while prosecutors sought a
Allen, Joshua and Karras were convicted at a jury trial in April
2009 of two counts each of mail fraud. Prosecutors said Allen,
Karras, Joshua and Young intentionally committed fraud by taking
checks worth $143,000 from a contract linked to federal
welfare-to-work programs. Prosecutors said the defendants routed
unearned checks to their own bank accounts without permission of
the Calumet Township Board and did not properly disclose their
interests in the contract.
Defense lawyers argued the defendants were told they could
legally take the payments.
Allen, noticeably thinner than he was last spring but speaking
stridently in full voice, reiterated his disagreement with the jury
verdict Tuesday in court. He said he signed the contract hoping to
help the poor of Calumet Township. He said he administered more
than $300 million in funds during his 32 years as township trustee.
He noted he reported the welfare-to-work contract payments to the
Township Board. He voiced remorse at his "hasty" behavior and
acknowledged his decisions were "flawed," but he denied knowingly
"I absolutely did not violate federal law with any willful
intent of deception," Allen said.
Assistant U.S. Attorney Gary Bell pointed out that Allen's crime
was committed against impoverished residents of Calumet Township.
He called the crime, which spanned years, "brazen" and
King, a former Gary mayor defending a man who was briefly mayor
of Gary after King resigned, eulogized Allen's political career in
a speech redolent of King's own political experience. He said
Allen, a decorated Korean War veteran, entered politics at a time
when a black man would not have been welcome in certain Gary
neighborhoods. King observed that Lake County Democratic politics
set a low standard for cordiality, but he said Allen drew respect
from his peers. Allen was "legendary" among local politicians, King
"You don't get elected that many times unless you can accurately
be called a warrior," King said.
King said last year's conviction sent Allen into a "spiral."
King challenged as "delusional" a Bureau of Prisons doctor's
testimony Tuesday that the bureau can appropriately treat Allen's
ailments. Simon said court records indicate a pattern of "bizarre
behavior" followed Allen's conviction. Allen showed up at church
"dressed inappropriately" and "lashed out at his wife," Simon said.
King said Allen's record and his deteriorating health justified
"Mercy and justice are coequals in this particular case," King
Simon disagreed with King's argument that the prison bureau
can't appropriately treat Allen. He lauded Allen for his public
service, but Simon decried corruption as "corrosive" to the public
trust in democracy. Simon described Allen's "cover story" as
"I do think that this was motivated by greed," Simon said.
In sentencing Joshua, Simon said he had to balance factors
including the support of family and friends -- who turned in an
exceptional volume of letters praising Joshua -- with Joshua's
prior embezzlement conviction and tax issues discovered by Internal
Revenue Service investigators after the criminal investigation
started. Joshua pleaded guilty to failing to file tax returns in
2001 and 2002.
Joshua plans to appeal, said her lawyer, Karen
Simon said Young, now of Mississippi, was "clearly less
culpable" than his co-defendants. Young's plea agreement precludes
Cantrell sentenced to 6 1/2 years in prison
HAMMOND | Blasting Robert Cantrell for using his talents to
steal from taxpayers, a federal judge sentenced the former Lake
County political power-broker to 6 1/2 years in federal prison.
Finishing Cantrell's long-delayed sentencing in Hammond federal
court Tuesday, U.S. District Court Judge Rudy Lozano seemed
unconvinced by defense attorney Kevin Milner's portrayal of
Cantrell, 67, of Schererville, as a benevolent patriarch, good
Samaritan and patriot who deserved no prison time for his 11 fraud
Milner argued Cantrell's crimes were "victimless" because
Cantrell, a former political fixer based in East Chicago, can pay
back the $68,000 he took from North Township through contract
Lozano disagreed. He called Cantrell a "blessed" man who stole
"You were ahead of what most people had," Lozano told Cantrell.
"But from the evidence in this case, it also appears that you fell
into that ditch called politics."
Lozano sentenced Cantrell to 78 months in prison to be followed
by three years of supervised release. Lozano also ordered Cantrell
to repay the $68,000 to North Township. Cantrell must report for
prison May 13.
Milner drew smiles and quiet chuckles when he requested Cantrell
be sent to a federal prison in Oxford, Wis., a common destination
for local public servants convicted of federal crimes. Lozano
agreed to recommend to the prison bureau that Cantrell be sent to a
jail near Chicago.
"There are some people at the (Oxford) facility that are casual
acquaintances," Milner said.
Milner said outside court he planned to file appeals to
Cantrell's conviction and sentence Tuesday afternoon.
Cantrell was convicted June 6 of four counts of depriving the
public of honest services, three counts of insurance fraud using
the U.S. mail and four counts of filing false tax returns between
2000 and 2003. The indictment accused him of taking cash kickbacks
from a contract between his then-employer, the North Township
trustee's office, and a political ally's company.
The sentencing was delayed almost 10 months, most recently so
that Lozano could review trial transcripts for evidence relevant to
Milner's objections to sentence enhancements proposed in a
pre-sentence report prepared by probation agents.
Milner argued unsuccessfully that his "friend Bob" deserved a
lighter sentence, claiming the township lost no money in the fraud
and that Cantrell had no decision-making or supervisory power at
the township. Milner pleaded with Lozano to ignore advisory
sentencing guidelines that called for a sentence of up to eight
years in prison.
Assistant U.S Attorney Orest Szewciw asked for an eight-year
"Lake County, Ind., has a history of public corruption, and this
case is just one more sordid chapter," Szewciw said.
In his statement to Lozano, Cantrell did not apologize. He
reminded Lozano of his military service in the Gulf War.
"No matter what happens here today, I am proud to be an
American," Cantrell said.
Smith, Powell, Harris guilty
HAMMOND | A federal jury returned guilty verdicts Thursday night
against three political heavyweights -- Lake County Councilman Will
Smith Jr., tax collector Roosevelt Powell and Gary attorney Willie
All three were found guilty of filing false tax returns for
failing to report a combined $150,000 in "finder's fees" they got
for arranging the $200,000 sale of a vacant grocery store in Gary's
Miller neighborhood to the Gary Urban Enterprise Association in
Smith, 68, who was president of County Council when he was
indicted last year, was convicted of one count of filing a false
tax return in 2001. He was acquitted of two conspiracy charges.
Harris, 54, and Powell, 63, were convicted of one count each of
filing false tax returns, conspiring to defraud the public charity
that legally owned the store and conspiring to illegally erase back
taxes on the store. They were each acquitted of one conspiracy
Smith faces a maximum of three years in prison and Harris and
Powell face up to 28 years when they're sentenced in early January,
although the sentences are highly dependent on federal guidelines
and U.S. District Judge Philip Simon's judgment.
"The message is don't take advantage of people and don't abuse
your power, because that's what this case was about," Assistant
U.S. Attorney Gary Bell said. "What it affirms is that the U.S.
attorney's office is going to continue to fight corruption."
None of the defendants showed emotion when the verdicts were
read about 7:30 p.m. Thursday.
"I think the verdict is fair, based on the evidence," said
defense attorney Fred Work, who got Smith acquitted of the charges
that could have carried the most prison time.
Harris' wife, Dharathula Hood-Harris, had little to say about
the trial, in which she took the witness stand as Harris'
"He was not guilty," Hood-Harris said.
The jury deliberated for about 16 hours over two days following
the seven-day trial. The verdict came about seven hours after the
jury of eight women and four men wrote Simon a note Thursday saying
they were "hopelessly deadlocked" on eight of the charges.
Though the case featured a blizzard of paperwork -- quit-claim
deeds, cash receipts registers and profit-loss statements -- Bell
said the prosecution's case rested mainly on the testimony of close
friends and family members of the defendants.
One victim who testified was Dharathula Millender, who is
Harris' aunt-in-law and the founder of the Gary Historical and
Cultural Society, which owned the grocery store at 6300 Miller Ave.
and yet lost 75 percent of the profits of the sale to "finder's
Also testifying was Dorothy Ard, a longtime family friend of
Harris, who said Harris betrayed her by forging her signature on a
GUEA check that made it look as though she took an absurd,
twenty-fold profit on the sale of the building at 768-778
Harris and Powell also were convicted of fraudulently reducing
property taxes on the grocery store by $58,000, telling a judge the
building would have to be razed because of poor condition -- on the
same day they received their profits from the sale.
Prosecutors said the three men deliberately failed to report the
income on their 2001 tax returns. Defense attorneys noted that the
taxes were paid in 2004, after a civil audit of Powell's taxes
uncovered the profits.
Fifes headed to federal prison
HAMMOND | A former East Chicago mayoral adviser and his wife are
going to prison for hiding hundreds of thousands of dollars of
income funneled to him by fellow officials.
"One of the hogs at the public trough," was how U.S. District
Court Judge James Moody described the crime of 48-year-old James H.
Fife III, who must begin next month serving a 47-month
His wife, Karen L. Krahn-Fife, 37, must serve a 24-month
sentence for her role in helping hide their income from the IRS
through a baffling array of five shell corporations they created to
receive under the table payments from former East Chicago Mayor
Robert Pastrick and former North Township Trustee Gregory
The two also must reimburse the IRS a total of $627,000 in back
Moody didn't mince words with Fife when pronouncing his
sentence. "This is an egregious crime. You should be ashamed of
yourself. You did a disservice to your profession (as a lawyer),
the city of East Chicago, your family and friends. Shame on
Merrillville lawyer Nick Thiros, who defended the couple and is
a longtime acquaintance of Fife, said, "The biggest disappointment
for Jim is that he feels he dragged Karen into this. Unfortunately,
he did wrong by her. That is his biggest shame."
Assistant U.S. Attorney Thomas Kirsch III said Fife was
"entrusted to make (East Chicago) better," but instead of stopping
others in City Hall from misappropriating public funds Fife "was
loading his pockets."
Government presented evidence at the nearly four-hour sentencing
showing the couple received more than $1 million between 1998 and
2001 when he was a special assistant to former mayor Pastrick.
Kirsch said Fife did little if any legitimate work for the
dollars, but milked his relationships with former mayor Pastrick
and Cvitkovich, a longtime friend of Fife, a political ally of
Pastrick and a cousin of Krahn-Fife.
Kirsch said Fife was a deal maker. The government alleged Fife
received $135,000 from Cvitkovich "for arranging a contract between
the city (of East Chicago) and Clark Material Terminals, owned by
Dan McArdle, for the removal of sludge." The government alleges
that deal was "in violation of the Indiana bribery law."
McArdle isn't charged with any wrongdoing. He was a major
contributor to Pastrick's campaigns and is best known for owning a
tire recycling business that caught fire in 1994 and polluted local
skies for many days.
Former mayor Pastrick isn't charged with any criminal
wrongdoing, although he is defending himself against a civil
racketeering suit filed by the Indiana attorney general, which
claims Pastrick and others operated the city as a corrupt
Cvitkovich pleaded guilty last October to tax fraud and was
forced to resign as township trustee. He is awaiting
Kirsch said Cvitkovich and the city of East Chicago would have
had to report their payments to the IRS if they had been made
personally to Fife and his wife, so instead they took advantage of
a loophole in tax law and the payments were made to five sham
corporations that didn't have to be reported to the IRS.
Thiros argued Fife was disorganized and guilty only of
negligence. He said the wife trusted her husband and didn't realize
he was committing a crime.
Kirsch said the wife had to know because she was benefiting from
the illicit income too, drawing out $40,000 out of the sham
corporations to buy herself a new Mercedes-Benz.
Fife said, "I'd like to apologize to the court, my family and
friends. My intention was to help my family." Krahn-Fife said, "I'm
deeply sorry for all my wrongdoing. Our marriage was based on love
and trust. There was never a reason to question anything."
The couple left the courtroom hand in hand. They have a
3-year-old son who will be without his parents beginning next
Moody said he will recommend sending Fife and Krahn-Fife to the
Oxford Federal Correctional Institution, a medium security facility
in south central Wisconsin.
There they can serve time with Kevin Pastrick, a son to the
former East Chicago mayor, Peter Manous, another protege of
Pastrick and a former state Democratic party chairman and two other
convicted East Chicago officials.
Markovich gets 18 months in sidewalk case
HAMMOND | "I'm here, and I'm on time," former Lake County
Councilman Joel Markovich proudly told a federal courtroom at his
U.S. District Court Judge Rudy Lozano rewarded the 43-year-old
businessman with leniency -- an 18-month prison sentence -- for his
cooperation in the sidewalks-for-votes case and other public
Markovich must repay East Chicago the $755,088 he overbilled the
city for work JGM Enterprises, his landscaping and contracting
service, did. He also must pay a $6,000 fine.
He is scheduled to report to prison May 17. He will be eligible
for parole after 15 months.
Markovich's sentencing was in sharp contrast to that of Frank
Kollintzas, a former East Chicago city councilman, who fled to
Greece two weeks ago to avoid an 11-year and four-month sentence as
a leader of the sidewalk scandal.
U.S. Attorney Joseph Van Bokkelen said afterward that Markovich
deserved a break.
"He came to us. He received the benefit of cooperation," Van
Bokkelen said. He also said Markovich could have received more than
double the prison time if he hadn't cooperated.
Van Bokkelen said the details of Markovich's cooperation are
being kept secret because the information is being used to pursue
other public officials.
Markovich's firm was one of several that took part in a $24
million windfall ordered by officials of former Mayor Robert
Pastrick's administration. They turned a modest sidewalk
improvement project into an offer of free concrete driveways,
patios, walkways and tree trimming for almost anyone who asked.
It was done in the weeks leading up to the 1999 Democratic
primary election. Stephen R. "Bob" Stiglich was mounting a serious
challenge to Pastrick's re-election. Pastrick beat Stiglich.
The FBI launched an investigation of the scandal in 2000.
Assistant U.S. Attorney Gary Bell said Thursday, "Others lied by
telling us they didn't know anything or refused to be interviewed,
but (Markovich) approached us. We are happy he came to us and told
Markovich pleaded guilty last year to the overbilling and
immediately resigned from the county council.
"I have made some bad life-altering decisions. I want to
apologize to the taxpayers, the IRS, the court, my wife, Sandy, and
our six daughters," Markovich said.
Lozano said it was public thievery like Markovich's that helped
reduce the once-vibrant East Chicago community "to only a
Kollintzas flees for Europe
EAST CHICAGO | Former City Councilman Frank "Frankie" Kollintzas fled the country and a prison term that he warned in a letter he couldn't face.
U.S. District Court Judge Robert Miller pronounced a sentence of 11 years and four months Thursday to an empty chair at the defense table in his South Bend courtroom after being told the 62-year-old man used either a false passport or a possibly a Greek passport, under the name Fotios Kollintzas, to board a Swissair flight Tuesday afternoon to Zurich, Switzerland.
Kollintzas wrote a letter to the court the day he fled complaining he hadn't slept well since his arrest in 2003 in the sidewalks-for-votes case and that he didn't deserve "to go to prison until I die or become an old man."
The judge issued an arrest warrant for Kollintzas.
U.S. Attorney Joseph Van Bokkelen said, "I will vigorously pursue him." Kollintzas, however, could find sanctuary in Greece, since that nation doesn't return American fugitives who receive Greek citizenship, he said.
He said Kollintzas is a native-born American, but his parents immigrated from Greece. Kollintzas' cousin, Evangelos Kollintzas of Schererville, fled there two years ago to avoid trial on a federal extortion charge.
The judge said Frank Kollintzas' sentence was a "just punishment" for misappropriating nearly $24 million in public funds five years ago to give free concrete driveways, patios and sidewalks to voters to ensure his re-election and that of the former Mayor Robert Pastrick's administration in the 1999 primary election.
There was no reaction Thursday to the announcement of Kollintzas' disappearance from the crowd of his supporters in the courtroom.
A work associate of Kollintzas, who asked to remain anonymous, told The Times Thursday she and another fellow worker last saw Kollintzas Tuesday afternoon. He met with one of his lawyers that day at the city school administration building, where Kollintzas was on the payroll as director of facilities.
Kollintzas apparently left his car in the school parking lot outside an administration building called the warehouse. A member of his family came to drive it away.
His 62nd birthday was Tuesday, and his family had planned a celebration at his home that evening. "But he never showed up," she said. She said his family told others they didn't know where he was. "No one has heard anything. This is like a bad dream," she said.
Van Bokkelen, who was present in court for the sentencing, and Theodore Poulos, lead counsel of Kollintzas' defense team, both said they suspect Kollintzas fled after the judge sentenced his co-defendants, Edwardo Maldonado, former city controller, and Joe De La Cruz, former fellow city councilman, to eight years and six years in prison, respectively.
Poulos said in his sentencing argument, "I don't know why he isn't here, but he continued to insist on his innocence and facing a sentence in such a draconian range... that would put him in prison until age 73 or 75."
He said Kollintzas would have received the same sentence if he had robbed and wounded a bank teller.
Van Bokkelen said the sentence was fair and a warning to others under investigation to cooperate or face a similar price.
He said, "I think the Maldonado sentence (Friday) did scare him. I think Kollintzas hedged his bets up to the last moment."
Kollintzas was supposed to have been sentenced Friday along with Maldonado and De La Cruz, but the judge granted Kollintzas a six-day delay because Poulos had to appear in another court Friday.
Van Bokkelen said he doesn't think that was a ruse. "I think Ted was as shocked as anybody. Ted's client betrayed him. I take him at his word that he wanted to (be sentenced) first."
Van Bokkelen said he never considered detaining Kollintzas before sentencing, despite vague rumors he might flee. He said no federal judge was likely to detain someone like Kollintzas who had lived and worked in Northwest Indiana all his life.
The three-hour sentencing -- described as surreal by one government source -- featured defense lawyers praising Kollintzas' integrity. "He's done a world of good," Poulos said.
The judge ran through the ritual of explaining how he arrived at the sentence, the amount of restitution ($25.5 million) and the right of appeal to an absent defendant.
Assistant U.S. Attorney David Hollar argued that with Kollintzas "getting on an airplane and leaving the country, there was no more powerful statement he could make" in answer to evidence Kollintzas led and organized the corruption that swept the city.
The judge read out a long list of witnesses who implicated Kollintzas in the sidewalk scheme and said that his escape counterbalanced all the good attributed to his private and public good works over the last four decades.
Miller said 25 people wrote him to praise Kollintzas. "He did not return their support today," the judge said.