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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 expressed my thought in the title, long as it was. I am shocked that there is ever immunity from accountability for ANY Government agency. That appears to violate every principle in the US Constitution, which exists to limit Government power and to ensure Government accountability. I don't know how many cases of legitimate child abuse exist, but in the few cases in which I knew the people involved, in every example an anonymous caller used DCS as their personal weapon to strike at innocent people over trivial disagreements that had no connection with any facts. Given that the system is vulnerable to abuse, and given the extreme harm any action by DCS causes to families, I would assume any degree of failure to comply with the smallest infraction of personal rights would result in mandatory review. Even one day of parent-child separation in the absence of reasonable cause for a felony arrest should result in severe penalties to those involved in the action. It appears to me, that like all bureaucracies, DCS is prone to interpret every case as legitimate. This is not an accusation against DCS. It is a statement about the nature of bureaucracies, and the need for ADDED scrutiny of all bureaucratic actions. Frankly, I question the constitutionality of bureaucracies in general, because their power is delegated, and therefore unaccountable. No Government action can be unaccountable if we want to avoid its eventual degeneration into irrelevance and lawlessness, and the law of the jungle. Our Constitution is the source of all Government power, and it is the contract that legitimizes all Government power. To the extent that its various protections against intrusion are set aside, so is the power afforded by that contract. Eventually overstepping the limits of power eliminates that power, as a law of nature. Even total tyranny eventually crumbles to nothing.

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