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Bales trial in jury's hands after colorful closings

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SOUTH BEND — The jury began deliberations Thursday in the federal fraud trial of Indianapolis real estate broker John M. Bales and partner William E. Spencer after three hours of spirited closing arguments Wednesday.

A federal prosecutor and two top-tier Indianapolis defense attorneys representing Bales and Spencer closed their cases with a series of rhetorical flourishes and one-liners designed to stick with jurors as they consider whether the men are guilty of 13 felony charges, including bank, wire and mail fraud.

Previous coverage of the trial and Elkhart lease deal can be found here.

Here's a sample of what the attorneys had to say in U.S. District Court for the Northern District of Indiana:

— "Bales and Spencer decide to make extra money on a state deal, even though it's not allowed, and then hide it."  - Assistant U.S. Attorney Jesse Barrett, summarizing the government's case that the defendants defrauded the state and a bank by secretly taking any ownership interest in an Elkhart building the state later leased. Their company, Venture Real Estate Services, had a state contract that banned direct or indirect ownership in buildings where the firm brokered lease deals.

— "This is a fraud case where the defendant is the single biggest loser." - Bales defense attorney Larry Mackey, arguing both Bales and Spencer ultimately will lose money on their investment in the Elkhart building. He contends Bales put up his own money for a down payment on the building to expedite a move by the state's Department of Child Services out of a crime-plagued former office location.

— "The government is saying the victims here are the state and bank. We're saying the two victims are Mr. Spencer and Mr. Bales." - Spencer attorney Bernard Pylitt.

— "During this trial, I could almost feel Lady Justice looking over us and just shaking her head." - Mackey, just warming up.

— "Keep your eye on the ball, and the ball is Mr. Page, Mr. Page, Mr. Page." - Mackey, referring to Indianapolis attorney Paul J. Page, the deed owner of the Elkhart building, who declined to pony up his own down payment to buy the building.

— "It would have been so easy if there was no intent to cover up to say that 'we gave some money to Paul Page.'" - Barrett, on Venture's missed opportunities to come clean with state officials who questioned Venture's role in the Elkhart deal.

— "I'm going to show you 29 different times John Bales, Bill Spencer or someone at Venture lied to the state or bank about the Elkhart deal." - Barrett, before showing the jury 29 emails and other documents he argued advanced a cover-up.

— "The pathetic proof on the bank fraud tells you a lot about the rest of their case." - Mackey, noting that neither Bales nor Spencer signed for Page's bank loan from Huntington. Page was also charged but agreed in January to plead guilty and cooperate with the government.

— "Two weeks ago, Huntington gave Mr. Bales a car loan." - Mackey, suggested a truly defrauded bank might stop doing business with the one doing the defrauding.

— "I'm going to submit to you Paul Page earned the label." - Mackey, referring to the limited liability company called L&BAB that owned the Elkhart building. Bales used the acronym "lazy and broke-ass bitch" when he formed the company as an "inside joke" smearing Page.

— "Paul Page was the lazy and broken-ass bitch in this deal." - Pylitt.

— "Paul Page is a crook." - Mackey.

— "They knew when they approached him and formed the LLC that he was lazy and broke." - Barrett.

— "We gave you high-tech, now we're going low-tech." - Barrett, eschewing PowerPoint and instead showing the jury giant posters of financial statements Bales and Spencer submitted to another bank as they considered an outright purchase of the Elkhart building from Page in the summer of 2009. (Such a deal, which did not materialize, would have been an unequivocal violation of their state contract.) Both men showed as assets their interest in BAB Equity LLC, which provided the down payment for the Elkhart building. Bales valued his stake at $290,000, and Spencer valued his at $51,350.

— "A grand conspiracy born in the U.S. Attorney's Office." - Mackey, referring to the government's case.

— "At some point, it's not everyone else's fault." - Barrett.

— "You gotta evaluate a witness' credibility. He doesn't deserve any." - Mackey, referring to state leasing director Steve Harless, one of several government witnesses the defense sought to discredit.

— "Go back and guess these guys guilty. That's what the government is asking you do do." - Pylitt, on the lack of a definition of the term "indirect ownership" in Venture's contract with the state.

— "I know you told us none of you are reporters, but you can write tomorrow's headline, and this is what it should be: Not guilty. Not guilty. Not guilty." - Mackey.

— "You can be dumb, stupid and foolish, but that doesn't make you a criminal." - Pylitt, following Mackey in arguing their clients would not have left so many breadcrumbs had they intended to defraud the state or bank.

— "I can't tell you whether Bales or Spencer were smart crooks or stupid crooks." - Barrett.
 

The IBJ is a sister pubilcation of Indiana Lawyer.

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  1. I grew up on a farm and live in the county and it's interesting that the big industrial farmers like Jeff Shoaf don't live next to their industrial operations...

  2. So that none are misinformed by my posting wihtout a non de plume here, please allow me to state that I am NOT an Indiana licensed attorney, although I am an Indiana resident approved to practice law and represent clients in Indiana's fed court of Nth Dist and before the 7th circuit. I remain licensed in KS, since 1996, no discipline. This must be clarified since the IN court records will reveal that I did sit for and pass the Indiana bar last February. Yet be not confused by the fact that I was so allowed to be tested .... I am not, to be clear in the service of my duty to be absolutely candid about this, I AM NOT a member of the Indiana bar, and might never be so licensed given my unrepented from errors of thought documented in this opinion, at fn2, which likely supports Mr Smith's initial post in this thread: http://caselaw.findlaw.com/us-7th-circuit/1592921.html

  3. When I served the State of Kansas as Deputy AG over Consumer Protection & Antitrust for four years, supervising 20 special agents and assistant attorneys general (back before the IBLE denied me the right to practice law in Indiana for not having the right stuff and pretty much crushed my legal career) we had a saying around the office: Resist the lure of the ring!!! It was a take off on Tolkiem, the idea that absolute power (I signed investigative subpoenas as a judge would in many other contexts, no need to show probable cause)could corrupt absolutely. We feared that we would overreach constitutional limits if not reminded, over and over, to be mindful to not do so. Our approach in so challenging one another was Madisonian, as the following quotes from the Father of our Constitution reveal: The essence of Government is power; and power, lodged as it must be in human hands, will ever be liable to abuse. We are right to take alarm at the first experiment upon our liberties. I believe there are more instances of the abridgement of freedom of the people by gradual and silent encroachments by those in power than by violent and sudden usurpations. Liberty may be endangered by the abuse of liberty, but also by the abuse of power. All men having power ought to be mistrusted. -- James Madison, Federalist Papers and other sources: http://www.constitution.org/jm/jm_quotes.htm RESIST THE LURE OF THE RING ALL YE WITH POLITICAL OR JUDICIAL POWER!

  4. My dear Mr Smith, I respect your opinions and much enjoy your posts here. We do differ on our view of the benefits and viability of the American Experiment in Ordered Liberty. While I do agree that it could be better, and that your points in criticism are well taken, Utopia does indeed mean nowhere. I think Madison, Jefferson, Adams and company got it about as good as it gets in a fallen post-Enlightenment social order. That said, a constitution only protects the citizens if it is followed. We currently have a bevy of public officials and judicial agents who believe that their subjectivism, their personal ideology, their elitist fears and concerns and cause celebs trump the constitutions of our forefathers. This is most troubling. More to follow in the next post on that subject.

  5. Yep I am not Bryan Brown. Bryan you appear to be a bigger believer in the Constitution than I am. Were I still a big believer then I might be using my real name like you. Personally, I am no longer a fan of secularism. I favor the confessional state. In religious mattes, it seems to me that social diversity is chaos and conflict, while uniformity is order and peace.... secularism has been imposed by America on other nations now by force and that has not exactly worked out very well.... I think the American historical experiment with disestablishmentarianism is withering on the vine before our eyes..... Since I do not know if that is OK for an officially licensed lawyer to say, I keep the nom de plume.

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