Fraud victim files civil suit against ex-councilor

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An Indianapolis physician who lost $1.7 million in a fraud scheme orchestrated in part by former Democratic City-County Councilor Paul C. Bateman Jr. has sued Bateman and two associates in Marion Circuit Court.

The civil suit comes as a criminal trial stemming from the case begins in U.S. District Court for the Southern District of Indiana. Jury selection began Monday morning in the trial of co-defendant Manuel Gonzalez, 53, who is facing three counts of wire fraud and two counts of money laundering.

Bateman, 58, pleaded guilty last month to 13 counts of money laundering and wire fraud. A third co-defendant, ringleader Michael Russell, 54, agreed to a plea deal a week earlier on 20 counts of wire fraud and money laundering.

The men are accused of persuading Dr. Arthur Sumrall to invest the money in their foundation and an ethanol-production business they said would fund it, but instead spent the money on personal luxuries.

Sumrall filed his civil suit seeking unspecified damages on Feb. 5. The lawsuit names all three criminal defendants and The Russell Foundation Inc., the not-for-profit the ethanol business was supposed to support.

The suit says the men solicited Sumrall's cash to invest both in ethanol production and development of a monorail system. It alleges the men used the funds "in a scheme of unauthorized selling and refinancing of vehicles purchased by The Russell Foundation."

"The titles were fraudulently signed by a law enforcement officer associated with the defendants," the suit alleges.

Bateman, along with Russell, also has agreed to pay back the $1.7 million they obtained from the physician, referred to as A.S. in the indictment filed in December 2011 against Russell, Bateman and Gonzalez.

According to the indictment, Russell approached the physician in January 2007 during a medical appointment about making an investment in an entity later established as Indiana Ethanol Capital Investments LLC. Russell, Bateman and Gonzalez attended several meetings with the doctor at a Denny's restaurant to further sell him on the investment.

Russell told the physician that the ethanol operation could reap an $18.5 million return on a $600,000 investment, and that he would be the last of 12 people to invest in it. In fact, the doctor was the only investor.

Between February 2007 and April 2007, according to court documents, Bateman picked up five checks for the ethanol investment totaling $702,000, most of which was deposited into Bateman’s personal account. The remainder was put into The Russell Foundation account, and later was transferred between that account and Bateman’s personal account.

The trio allegedly spent all but $30,000 of the money, purchasing seven cars, as well as custom clothing, home furnishings, entertainment and “elaborate security details” that included members of the Indianapolis Metropolitan Police Department, the indictment said.

The IBJ is a sister publication of Indiana Lawyer.


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  1. Joe, you might want to do some reading on the fate of Hoosier whistleblowers before you get your expectations raised up.

  2. I had a hospital and dcs caseworker falsify reports that my child was born with drugs in her system. I filed a complaint with the Indiana department of health....and they found that the hospital falsified drug screens in their investigation. Then I filed a complaint with human health services in Washington DC...dcs drug Testing is unregulated and is indicating false positives...they are currently being investigated by human health services. Then I located an attorney and signed contracts one month ago to sue dcs and Anderson community hospital. Once the suit is filed I am taking out a loan against the suit and paying a law firm to file a writ of mandamus challenging the courts jurisdiction to invoke chins case against me. I also forwarded evidence to a u.s. senator who contacted hhs to push an investigation faster. Once the lawsuit is filed local news stations will be running coverage on the situation. Easy day....people will be losing their jobs soon...and judge pancol...who has attempted to cover up what has happened will also be in trouble. The drug testing is a kids for cash and federal funding situation.

  3. (A)ll (C)riminals (L)ove (U)s is up to their old, "If it's honorable and pro-American, we're against it," nonsense. I'm not a big Pence fan but at least he's showing his patriotism which is something the left won't do.

  4. While if true this auto dealer should be held liable, where was the BMV in all of this? How is it that the dealer was able to get "clean" titles to these vehicles in order to sell them to unsuspecting consumers?

  5. He has refused his Assent to Laws, the most wholesome and necessary for the public good. He has forbidden his Governors to pass Laws of immediate and pressing importance, He has erected a multitude of New Offices, and sent hither swarms of Officers to harrass our people, and eat out their substance. He has combined with others to subject us to a jurisdiction foreign to our constitution, and unacknowledged by our laws; giving his Assent to their Acts of pretended Legislation: For imposing Taxes on us without our Consent: He is at this time transporting large Armies of foreign Mercenaries to compleat the works of death, desolation and tyranny, already begun with circumstances of Cruelty & perfidy scarcely paralleled in the most barbarous ages, and totally unworthy the Head of a civilized nation.. He has excited domestic insurrections amongst us, and has endeavoured to bring on the inhabitants of our frontiers, the merciless [ ] Savages, whose known rule of warfare, is an undistinguished destruction of all ages, sexes and conditions. GOD BLESS THE GOVERNORS RESISTING! Count on the gutless judiciary to tie our children down and facilitate the swords being drawn across their throats. Wake Up America ...