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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. What a fine article, thank you! I can testify firsthand and by detailed legal reports (at end of this note) as to the dire consequences of rejecting this truth from the fine article above: "The inclusion and expansion of this right [to jury] in Indiana’s Constitution is a clear reflection of our state’s intention to emphasize the importance of every Hoosier’s right to make their case in front of a jury of their peers." Over $20? Every Hoosier? Well then how about when your very vocation is on the line? How about instead of a jury of peers, one faces a bevy of political appointees, mini-czars, who care less about due process of the law than the real czars did? Instead of trial by jury, trial by ideological ordeal run by Orwellian agents? Well that is built into more than a few administrative law committees of the Ind S.Ct., and it is now being weaponized, as is revealed in articles posted at this ezine, to root out post moderns heresies like refusal to stand and pledge allegiance to all things politically correct. My career was burned at the stake for not so saluting, but I think I was just one of the early logs. Due, at least in part, to the removal of the jury from bar admission and bar discipline cases, many more fires will soon be lit. Perhaps one awaits you, dear heretic? Oh, at that Ind. article 12 plank about a remedy at law for every damage done ... ah, well, the founders evidently meant only for those damages done not by the government itself, rabid statists that they were. (Yes, that was sarcasm.) My written reports available here: Denied petition for cert (this time around): http://tinyurl.com/zdmawmw Denied petition for cert (from the 2009 denial and five year banishment): http://tinyurl.com/zcypybh Related, not written by me: Amicus brief: http://tinyurl.com/hvh7qgp

  2. Justice has finally been served. So glad that Dr. Ley can finally sleep peacefully at night knowing the truth has finally come to the surface.

  3. While this right is guaranteed by our Constitution, it has in recent years been hampered by insurance companies, i.e.; the practice of the plaintiff's own insurance company intervening in an action and filing a lien against any proceeds paid to their insured. In essence, causing an additional financial hurdle for a plaintiff to overcome at trial in terms of overall award. In a very real sense an injured party in exercise of their right to trial by jury may be the only party in a cause that would end up with zero compensation.

  4. Why in the world would someone need a person to correct a transcript when a realtime court reporter could provide them with a transcript (rough draft) immediately?

  5. This article proved very enlightening. Right ahead of sitting the LSAT for the first time, I felt a sense of relief that a score of 141 was admitted to an Indiana Law School and did well under unique circumstances. While my GPA is currently 3.91 I fear standardized testing and hope that I too will get a good enough grade for acceptance here at home. Thanks so much for this informative post.

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