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Grand jury indicts 2 attorneys, real estate broker

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A grand jury in South Bend has returned a 14-count criminal indictment against two attorneys and a real estate broker from central Indiana over a state lease deal in Elkhart.  

The deal was first revealed as part of an Indianapolis Business Journal investigation. The IBJ is a sister publication of Indiana Lawyer.

The complaint alleges real estate broker John M. Bales, his partner and general counsel William E. Spencer and Indianapolis developer and attorney Paul J. Page defrauded the state and an unnamed bank. The charges, brought by the U.S. Attorney for the Northern District of Indiana, allege each man committed eight counts of wire fraud, three counts of mail fraud, one count of bank fraud and one count of conspiracy to defraud. Page also faces a charge of making false statements to influence the actions of a bank insured by the Federal Deposit Insurance Corp.

The state hired Venture Real Estate Services in 2006 to handle leasing for state agencies in a contract that explicitly banned Venture and its partners and employees from “any ownership interest” or any “attempt to acquire” properties to be leased by the state.

But as IBJ reported last year, the politically connected real estate broker over the years has acted as a developer for several public-sector tenants he represents — putting government agencies into buildings he owns or those owned by his friends and associates.

The indictment points to one transaction in particular that prosecutors allege ran afoul of Bales' agreement with the state: A lease deal in Elkhart for the state's Department of Child Services in a building jointly owned by Page and former Marion County Prosecutor Carl Brizzi. The government has not charged Brizzi.

According to the indictment, Page bought the office building through a company called L&BAB LLC, then leased it to the state's Department of Child Services. Page paid no money to buy the building, but put up $361,000 in cash for the property, which had been wired from Bales' account under an entity called BAB Equity.

"Page promised to repay BAB Equity and to give it 25 percent of the profits when the Elkhart building was resold, even though Bales and Spencer could not have any sort of ownership interest in the building and even though Venture told the state that it would only be compensated through commissions," U.S. Attorney David Capp said in a statement.

The indictment alleges that Page also used $531,000 from a bank without noting the details of his arrangement with BAB Equity.

Venture was paid an $88,400 commission on the lease deal, then took more than a year to rebate $22,100 to the state as required under its deal. The firm also received a $28,875 broker's fee and a $22,700 development fee, the indictment alleges.

The charges follow an FBI investigation that lasted more than a year. The U.S. Attorney's Office anticipates that the defendants' initial appearance will be at 2 p.m. Thursday in the South Bend Federal Courthouse.

According to the Indiana Roll of Attorneys, Page, who was admitted to the bar in 1990, has been disciplined in the past, but currently is active in good standing. Spencer was admitted in 2002 and has no disciplinary history. He is also active in good standing.

This story originally ran on IBJ.com Dec. 14, 2011.
 

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  1. OK, now do something about this preverted anacronism

  2. William Hartley prosecutor of Wabash county constantly violates people rights. Withholds statement's, is bias towards certain people. His actions have ruined lives and families. In this county you question him or go out of town for a lawyer,he finds a way to make things worse for you. Unfair,biased and crooked.

  3. why is the State trying to play GOD? Automatic sealing of a record is immoral. People should have the right to decide how to handle a record. the state is playing GOD. I have searched for decades, then you want me to pay someone a huge price to contact my son. THIS is extortion and gestapo control. OPEN THE RECORDS NOW. OPEN THE RECORDS NOW. OPEN THE RECORDS NOW.

  4. I haven't made some of the best choices in the last two years I have been to marion county jail 1 and two on three different occasions each time of release dates I've spent 48 to 72 hours after date of release losing a job being denied my freedom after ordered please help

  5. Out here in Kansas, where I now work as a government attorney, we are nearing the end of a process that could have relevance in this matter: "Senate Bill 45 would allow any adult otherwise able to possess a handgun under state and federal laws to carry that gun concealed as a matter of course without a permit. This move, commonly called constitutional carry, would elevate the state to the same club that Vermont, Arizona, Alaska and Wyoming have joined in the past generation." More reading here: http://www.guns.com/2015/03/18/kansas-house-panel-goes-all-in-on-constitutional-carry-measure/ Time to man up, Hoosiers. (And I do not mean that in a sexist way.)

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