Grand jury indicts 2 attorneys, real estate broker

Back to TopCommentsE-mailPrintBookmark and Share

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 Dec. 14, 2011.


Post a comment to this story

We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
You are legally responsible for what you post and your anonymity is not guaranteed.
Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in Indiana Lawyer editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.

Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

Sponsored by
Subscribe to Indiana Lawyer
  1. Heritage, what Heritage? The New Age is dawning .... an experiment in disordered liberty and social fragmentation is upon us .... "Carmel City Council approved a human rights ordinance with a 4-3 vote Monday night after hearing about two hours of divided public testimony. The ordinance bans discrimination on the basis of sexual orientation or gender identity, among other traits. Council members Rick Sharp, Carol Schleif, Sue Finkam and Ron Carter voted in favor of it. The three council members opposing it—Luci Snyder, Kevin Rider and Eric Seidensticker—all said they were against any form of discrimination, but had issues with the wording and possible unintended consequences of the proposal." Kardashian is the new Black.

  2. Can anyone please tell me if anyone is appealing the law that certain sex offenders can't be on school property. How is somebody supposed to watch their children's sports games or graduations, this law needs revised such as sex offenders that are on school property must have another non-offender adult with them at all times while on school property. That they must go to the event and then leave directly afterwards. This is only going to hurt the children of the offenders and the father/ son mother/ daughter vice versa relationship. Please email me and let me know if there is a group that is appealing this for reasons other than voting and religion. Thank you.

  3. Should any attorney who argues against the abortion industry, or presents arguments based upon the Founders' concept of Higher Law, (like that marriage precedes the State) have to check in with the Judges and Lawyers Assistance Program for a mandatory mental health review? Some think so ... that could certainly cut down on cases such as this "cluttering up" the SCOTUS docket ... use JLAP to deny all uber conservative attorneys licenses and uber conservative representation will tank. If the ends justify the means, why not?

  4. Tell them sherry Mckay told you to call, they're trying to get all the people that have been wronged and held unlawfully to sign up on this class action lawsuit.

  5. Call Young and Young aAttorneys at Law theres ones handling a class action lawsuit