ILNews

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 IBJ.com Dec. 14, 2011.
 

ADVERTISEMENT

Post a comment to this story

COMMENTS POLICY
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
ADVERTISEMENT
Subscribe to Indiana Lawyer
  1. Im very happy for you, getting ready to go down that dirt road myself, and im praying for the same outcome, because it IS sometimes in the childs best interest to have visitation with grandparents. Thanks for sharing, needed to hear some positive posts for once.

  2. Been there 4 months with 1 paycheck what can i do

  3. our hoa has not communicated any thing that takes place in their "executive meetings" not executive session. They make decisions in these meetings, do not have an agenda, do not notify association memebers and do not keep general meetings minutes. They do not communicate info of any kind to the member, except annual meeting, nobody attends or votes because they think the board is self serving. They keep a deposit fee from club house rental for inspection after someone uses it, there is no inspection I know becausee I rented it, they did not disclose to members that board memebers would be keeping this money, I know it is only 10 dollars but still it is not their money, they hire from within the board for paid positions, no advertising and no request for bids from anyone else, I atteended last annual meeting, went into executive session to elect officers in that session the president brought up the motion to give the secretary a raise of course they all agreed they hired her in, then the minutes stated that a diffeerent board member motioned to give this raise. This board is very clickish and has done things anyway they pleased for over 5 years, what recourse to members have to make changes in the boards conduct

  4. Where may I find an attorney working Pro Bono? Many issues with divorce, my Disability, distribution of IRA's, property, money's and pressured into agreement by my attorney. Leaving me far less than 5% of all after 15 years of marriage. No money to appeal, disabled living on disability income. Attorney's decision brought forward to judge, no evidence ever to finalize divorce. Just 2 weeks ago. Please help.

  5. For the record no one could answer the equal protection / substantive due process challenge I issued in the first post below. The lawless and accountable only to power bureaucrats never did either. All who interface with the Indiana law examiners or JLAP be warned.

ADVERTISEMENT