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Judge orders law firms to repay city $453,282

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A Merrillville attorney and three law firms must repay East Chicago a total $453,282 in legal fees they collected for defending former city officials in the Sidewalk Six scandal.

Lake Superior Judge John Pera on Wednesday issued a 10-page order in the case City of East Chicago and George Pabey v. Edwardo Maldonado, et al., No. 45D10-0503-PL-32, ruling that former city controller Edwardo Maldonado illegally paid four law firms that amount in 2004 for defending him and former city councilmen Frank Kollintzas and Joe De La Cruz against federal public corruption charges.

The judge ordered Merrillville practitioner Kevin Milner to repay $47,250; Valparaiso law firm Tsoutsouris & Bertig to repay $51,444; and Chicago law firms Cotsirilos Tighe & Streicker, and Mayer Brown Rowe & Maw to repay $63,923 and $290,665 respectively.

The foundation of this case filed five years ago dates back to 1999, when city officials illegally spent $25.5 million in public funds to repave sidewalks, curbs, and make other improvements in exchange for re-election votes favoring former East Chicago Mayor Robert Pastrick and his allies. That led to the federal criminal convictions of Maldonado, Kollintzas, and De La Cruz in 2004 for misappropriating public money, as well as a civil racketeering suit that resulted in a $108 million judgment against Pastrick and two supporters.

Following the verdict, Maldonado pleaded guilty in federal court that making the payments was a crime and he was ordered to pay $453,282 in restitution; but that money hasn’t been collected as he remains incarcerated until 2014. Kollintzas disappeared prior to his sentencing in 2005 and is believed to be in Greece, while De La Cruz has only recently been released from prison.

On this case, Judge Pera noted that the issue before him was: “Given the clear illegality of the payments, is it appropriate to require those receiving them to give the money back to the City? The city is silent as to any duty of attorneys retained by accused officials to return fees that the city may have paid, and is further silent as to any recourse the City might have against attorneys in such event.”

The judge noted that the Indiana General Assembly hasn’t specifically spoken on this issue, but that he can turn to common law for guidance. He relied on the current draft of the Restatement (Third) of Restitution, as well as caselaw dating back more than a century from inside and outside Indiana.

But Judge Pera wrote that the lawyers who accepted the money from Maldonado “almost before the ink was dry on a U.S. District Court jury verdict” should have realized a city ordinance forbid the payments once the officials were convicted of wrongdoing.

“Their suspicion should have been excited, by appearance and circumstances, that Maldonado was committing a breach of his fiduciary duty as agent for the City,” Judge Pera wrote. “Despite this knowledge, they accepted the payments when they should have refused them. Having notice of the circumstances in which the payments were made, the Attorney Defendants cannot claim protection as innocent third-party creditors.”
 

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  1. Can I get this form on line,if not where can I obtain one. I am eligible.

  2. What a fine example of the best of the Hoosier tradition! How sad that the AP has to include partisan snark in the obit for this great American patriot and adventurer.

  3. Why are all these lawyers yakking to the media about pending matters? Trial by media? What the devil happened to not making extrajudicial statements? The system is falling apart.

  4. It is a sad story indeed as this couple has been only in survival mode, NOT found guilty with Ponzi, shaken down for 5 years and pursued by prosecution that has been ignited by a civil suit with very deep pockets wrenched in their bitterness...It has been said that many of us are breaking an average of 300 federal laws a day without even knowing it. Structuring laws, & civilForfeiture laws are among the scariest that need to be restructured or repealed . These laws were initially created for drug Lords and laundering money and now reach over that line. Here you have a couple that took out their own money, not drug money, not laundering. Yes...Many upset that they lost money...but how much did they make before it all fell apart? No one ask that question? A civil suit against Williams was awarded because he has no more money to fight...they pushed for a break in order...they took all his belongings...even underwear, shoes and clothes? who does that? What allows that? Maybe if you had the picture of him purchasing a jacket at the Goodwill just to go to court the next day...his enemy may be satisfied? But not likely...bitterness is a master. For happy ending lovers, you will be happy to know they have a faith that has changed their world and a solid love that many of us can only dream about. They will spend their time in federal jail for taking their money from their account, but at the end of the day they have loyal friends, a true love and a hope of a new life in time...and none of that can be bought or taken That is the real story.

  5. Could be his email did something especially heinous, really over the top like questioning Ind S.Ct. officials or accusing JLAP of being the political correctness police.

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