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Former Venture employee turns on Bales during testimony

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SOUTH BEND — An FBI investigation into Venture Real Estate Services and principals John Bales and Bill Spencer had already begun when Matthew Dyer signed on as the company's controller in December 2009.

Bales told him about the federal investigation during the interview process and said the company had done nothing illegal, Dyer testified Wednesday in U.S. District Court for the Northern District of Indiana.

Dyer, who worked at Venture until February 2012, prepared the company's financial statements, cut its checks and managed properties including an Elkhart office building leased by the state's Department of Child Services and owned by Indianapolis attorney Paul Page through a company called L&BAB LLC. Bales provided Page with a down payment to buy the building via a company called BAB Equity LLC.

Prosecutors say the secret arrangement was a violation of a leasing agreement between Venture and the state of Indiana that barred the company from direct or indirect ownership of properties where state agencies leased space. The defense argues the arrangement was a loan and not ownership.

Dyer testified Wednesday that he disagreed with Bales and Spencer about the arrangement being a loan. He recalled three occasions where he discussed the matter with Bales, who never disclosed to the state Venture's involvement in the Elkhart deal outside of brokering the lease.

"Equity means ownership," Dyer said Wednesday. "If it was truly a loan, I would have called it BAB Loan or BAB Mortgage."

Bales' reaction during the conversations, Dyer said, was to blame Spencer, his general counsel and now co-defendant. As Dyer recalls, Bales profanely lamented that he had "trusted" Bill to protect him, and Bill "f--ked" him.

Dyer said he was responsible for managing the Elkhart property on behalf of owner Paul Page. Dyer said he noticed in summer 2009 that Page had withdrawn funds from the building's checking account in violation of an understanding that rent revenue from the state would first go to pay back Bales. There apparently was no pre-arranged payment schedule, as would be typical with a loan.

Dyer said he alerted Bales, who moved to place a mortgage on the property to protect his investment. And Page responded by firing Venture as property manager.

In 2010, Dyer said he realized Venture hadn't paid the state a portion of the Elkhart lease commission, about $22,000, required under the contract. The entire $88,400 commission had gone to Bales to repay part of his $362,000 down payment.

Dyer said he told Bales about the unpaid balance owed to the state. His boss' response, as Dyer recalled it: "F--k them. They owe us money, so I can pay them whenever I want."

A few weeks later, after Dyer completed a full audit and reminded Bales about the outstanding payment, Bales told him to cut the state a check. A portion of the money was routed right back to Venture to cover unpaid commissions on other lease deals.

Bales attorney Larry Mackey noted in his cross examination that Dyer shared more information, including the equity versus ownership conversations, in a follow-up interview with the FBI and federal prosecutors shortly before the trial, than he had during an interview months earlier.

Dyer said he simply was not asked to elaborate during the earlier interview, and he was acting on his attorney's advice "not to volunteer information or go on a tangent."

Mackey also sought to challenge Dyer's credibility by bringing up an insurance claim Dyer filed that was later denied.

Dyer acknowledged during questioning that he had received a letter from Erie Insurance Co. shortly before his follow-up interview with federal authorities notifying him that his claim on a stolen vehicle had been denied. The insurance company determined he had made false statements.

Later, on redirect, Dyer said he had told the insurance company the truth.

"The cops caught the guy who stole my car," he added.

Assistant U.S. Attorney Jesse Barrett has argued Bales and Spencer were well aware their arrangement in Elkhart would not pass the state's smell test.

Former Indiana Department of Administration Commissioner Carrie Henderson testified Tuesday about a conversation in which Bales suggested Venture could provide financing for state-leased buildings to help close deals. She told him he "absolutely couldn't do that kind of deal with the state of Indiana."

Former Indianapolis Deputy Mayor Michael Huber, who oversaw Venture's contract as a deputy commissioner at IDOA under Henderson from 2007 to 2008, added more fuel in testimony Wednesday.

Huber said he asked Bales and Spencer in 2007 to explore options for leasing storage space for the Indiana Stadium and Convention Building Authority, which at the time was leading construction of Lucas Oil Stadium and an expansion of the Indiana Convention Center.

He said Venture informally suggested about a dozen options. Huber asked whether Venture had any ownership position in any of the buildings it was suggesting.

"They identified two or three where they had interests," Huber said. "We agreed that future discussions had to be about properties without ownership of Venture."

Huber acknowledged on cross examination by Bales attorney Jason Barclay that he had no personal involvement in the Elkhart deal. Barclay also introduced records indicating Venture's formal recommendations on buildings to lease for the Indiana Stadium and Convention Building Authority included only one building in which Venture had an interest, and that interest was disclosed.

Also on Wednesday, Barrett asked former IDOA Commissioner Mark Everson and Steve Harless, who handles the state's leasing efforts, to characterize their reaction to a series of IBJ stories that addressed the Elkhart deal. The stories prompted state officials to question Venture employees including Bales and Spencer.

Both men said they were satisfied, to varying degrees, with Venture's claim it had no ownership interest in the Elkhart building.

That apparently changed when an IBJ story in May 2010 revealed several details that were news to state officials. The story, based on a review of dozens of pages of records relating to the Elkhart deal, reported that the Bales-controlled BAB Equity held a second mortgage and that Venture had been paid both a commission and a development fee on the deal.

Venture had told the state the landlord, L&BAB, had not yet paid Venture's commission.

Harless testified Thursday that the IBJ story was the first he heard about the commission or development fee. And his skepticism grew as Venture's principals began ignoring his questions via email. He called the notion that Venture invested in a state-leased building a "significant conflict of interest."

Mackey took a particularly confrontational approach when he cross-examined Harless, questioning his credentials and asking whether Harless had a "hard-on" for Venture, meaning an ax to grind. Harless said no.

By way of example, Mackey noted that Venture had worked for months on a plan to lease offices for the Department of Revenue, but Harless wound up tapping competitor Resource Commercial Real Estate to broker the deal and collect a commission in the neighborhood of $200,000.

Harless gave more testimony Thursday morning, which was expected to be followed by additional government witnesses. The defense is scheduled to make its case next week.

One name that's unlikely to resurface: Carl Brizzi, the former two-term Marion County prosecutor. A couple of witnesses mentioned his name during testimony Wednesday, and defense attorneys promptly objected and asked for the references to be stricken from the record.

At some point after the Elkhart deal closed, Page added Brizzi as a co-owner of the building without requiring him to invest money or take out debt. Brizzi has not been charged with a crime and has denied wrongdoing.

The IBJ is a sister publication of Indiana Lawyer.
 

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  1. Am I the only one who sees that the City is essentially giving away the MSA site AND giving millions to build new buildings on the site when this site would be the perfect place for the Justice Complex? Across from City-County, check; keeping it centrally located, check, etc. It's my understanding that the GM site must be purchased by the City from Motors Liquidation Company. STOP WASTING WHAT WE ALREADY HAVE AND OUR TAX DOLLARS! The Ballard Administration has not been known for it's common sense...never voted for him and never will!

  2. This guy sounds like the classic molester/manipulator.

  3. Louis D. Brandeis was born in 1856. At 9 years of age it would have been 1865. The Brandeis family did not own slaves. My source Louis D. Brandeis: A Life, by Melvin L. Urofsky.

  4. My name is Matthew Lucas Major, I recently went through a jury trial in Bloomington , In. It was the week of Feb 19-21. Although I have been incarcerated since August 5, 2014. The reason I 'am writing to you sir is on the 21 of February the jury came in with a very excessive and wrongful verdict of guilty on 6 child molesting charges against my daughter who was 9 at the time I was accused. I also had 2 other Felonies one of Intimidation and 1 of Sexual Vicarious Gratification. Judge Marc Kellam on the second day of trial gave me a not guilty on those 2 felonies. The jury was sent out during that time and when brought back Judge Kellam told them to not concern themselves with the 2 Felonies that he ruled on them. They were told to not let evidence they had already heard influence there verdicts. I never in my life touched any child sexually and definitely not with my own daughter. When I was arrested Detective Shawn Karr told me I would be convicted guilty just on my daughters word even without evidence. That's just what happened. my public defender did me so wrong he never once proved to the court and jury all the lies the child told, and Jeremy Noel my public defender could of proven the lies easily. The stories in Serenity's depositions and Forensic interview changed and were not consistent as Prosecutor Darcie Fawcett claimed they were. Yet my attorney never mentioned that. The facts that the child accused me of full penetration in her vagina and rectum was proven lies. Doctor Roberta Hibbard of Riley hospital in Indianapolis confirmed Serenity's hymen intact, no scars, no tearing, no signs of rape to her. Yet my attorney didn't use that knowledge . the DNA was all in my favor. I tell you I will spend my entire life in prison going through rape and beatings etc. even Judge Kellam abused his authority by telling the jurors to listen and believe what the prosecutors side in evidence like my daughters testimony. In one interview with the detectives my daughter got flustered with her mom and said on camera " I'm saying what you told me to mom"!! Yet Mr. Noel said nor did anything to even resemble a defense attorney. Judge Kellam allowed edited version of a taped conversation between the child and her mother. Also Judge Kellam allowed the Prosecutor too bring in to my case a knife found under my seat, the knife wasn't part of my case. She was allowed by my attorney and the judge to put a huge picture of it on the screen and huge picture of my naked privates in a full courtroom and open court. Ms. Fawcett says to jury see how easy Mr. Major could reach the knife and cut his Childs throat. Even though I had no weapons charge against these cases. This gave the jurors prejudice thought against me thinking I threatened her with that knife and how scared she would of been knowing i could get it and kill her. On my sentencing court March 19, 2014 my public defender told Judge Kellam he wish to resign from being my attorney and wished for the court to give me outside council to file a error to trial or appeal. We were denied. Now after openly knowing my public defender don't want to represent me he has to. Well when as parents we make our kids clean a room when they really don't wish to, well the child will but don't mean she will do a good job, that's where I'm at with Mr. Noel. please dont ignore mine and my families pleas for your help . we have all the legal proof you could need to prove Im innocent. Please dont make my spend years in prison innocent when you can fix this wrong. Im not saying Im a perfect man or that I was a perfect dad to my 2 children none of us are. Ive made some bad choices in life and I paid for them. But I didnt ever touch or rape my daughter . I love my children with all my heart. And now through needing attention and a ex-wife who told my granny several times she wish she could put me in prison to get me out of their lives. Well my ex finally accomplished her goal. Sad part is she is destroying our daughter with all this horrific lies and things she taught my daughter to say. My daughter will need therapist to ever hope for a chance of a normal life after what she had done to her by her mom and their side of the family. My daughter told everyone even on stand she had a dream months before i supposedly molested her in this dream I was molesting her and when I finally did it matched her dream perfectly. She admitted to watching movies about little girls being molested and watching U-Tube videos about child molesting all before it happened supposedly to her. Doesn't that sound very unusual that a non molested 9 yr old would need to know so much about being molested? The only reason I could think a 9 year old would need so much information is to be prepared to know what to say and be able to say how it felt what took place etc.. So when questioned by authorities she would be prepared. And there again sir if a parent is pre grooming a 9 year old child she would need intimate details . Like telling her daughter about a couple moles on my private area. The child admitted to sneaking my cell and looking many many times at nudes of me and my girlfriend even one where my penis was entering my girlfriends vagina. In that picture my moles are obvious. Yet when prosecutor showed everyone in court my privates and pictures of the moles she said the only way the child would know about them is if she saw them for herself. My attorney once again said nothing about the pictures my child saw. Or could a ex-wife be able to describe my moles to help her case against getting rid of me? I beg you help me. This is my very existence. Ive lost everything , a good job, a wonderful girlfriend, my freedom, but worse thing Ive lost is my children. They were my reason to get up every morning and strive to be better. The wonderful bond I had with my Serenity is gone. After this I would be afraid to even hug her for fear of what next can they do to me. I'm not afraid to tell you I sit here in this cell and try to hold back my tears. Everyone knows you cant show weakness in prison. My life has already been threatened here at Wabash Valley Prison. After only 3 days of arrival. I was tricked into signing a waiver now Im in G Block General Population with 6 child molesting felony charges. Mrs. Hart as a 18 year old I almost died hooked to machines in hospital almost 1 month and now I know that fear was childish compared to this . I cant help but put emotions in this, after all Mrs. Hart Im human and God help Me I never been more afraid in my life. I didnt hurt my little girl I didnt touch her sexually. As much as it shreds me and fills my mind what Im facing I worry more about my mom and granny because of their great love for me mam they are suffering so deeply. I aint done this things but my loved ones suffering right along beside me and If you take my case you will be in essence freeing them also. I sent momma this letter and asked her to email it to you. I'm scared I have been done so unjustly by our legal system and I need you to fix this and give me freedom. I ask you please don't just ignore my pleas. Here in America its nice to be able to trust our legal justice system, well they destroyed my and my loved ones trust in our justice system . And I'm trusting in You !!! My entire family is suffering this nightmare with me. My 77 year old granny had a stroke and isn't doing so well. My single mother that raised 3 kids alone is dying from Lupus and since my arrest has stayed so sick and weary. Our lives torn to peices by a government I was taught I could trust in. my momma has tried so many innocent project and wrongfully accused and cant get anywhere. please please help me. A quote from the late Nelson Mandela: To be free is not merely to cast off ones chains, But to live in a way that respects and enhances The Freedom Of Others. I have Faith in you and your clinic to cast my chains off and give me freedom I do deserve as a wrongfully accused Man, son, brother, father, friend. Matthew Major DOC# 246179 Cause # : 53c02-1308-FA-000779 God Bless you. Please contact me with your decision so I know you made a life changing decision for me , just please at least write me so I know you care enough about your citizens to respond to cries for your help. You can speak openly with my mother Charlotte Spain (828) 476-0406: 71 Lakeview Dr. Canton, NC 28716 Thank You Matthew Major I know yall get thousands of request and inmates claiming innocence, and each person who are innocent deserve to have organizations like yours willing to fight for them and I give yall so much Thanks and I thank God everyday yall are out there caring enough to help free the innocents. Since discovering firsthand how easily lives and families can be destroyed by Poor Defense attorneys not doing their job . And Prosecutors allowed to do as they please in court

  5. Frankly, it is tragic that you are even considering going to an expensive, unaccredited "law school." It is extremely difficult to get a job with a degree from a real school. If you are going to make the investment of time, money, and tears into law school, it should not be to a place that won't actually enable you to practice law when you graduate.

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