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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. The Conour embarrassment is an example of why it would be a good idea to NOT name public buildings or to erect monuments to "worthy" people until AFTER they have been dead three years, at least. And we also need to stop naming federal buildings and roads after a worthless politician whose only achievement was getting elected multiple times (like a certain Congressman after whom we renamed the largest post office in the state). Also, why have we renamed BOTH the Center Township government center AND the new bus terminal/bum hangout after Julia Carson?

  2. Other than a complete lack of any verifiable and valid historical citations to back your wild context-free accusations, you also forget to allege "ate Native American children, ate slave children, ate their own children, and often did it all while using salad forks rather than dinner forks." (gasp)

  3. "So we broke with England for the right to "off" our preborn progeny at will, and allow the processing plant doing the dirty deeds (dirt cheap) to profit on the marketing of those "products of conception." I was completely maleducated on our nation's founding, it would seem. (But I know the ACLU is hard at work to remedy that, too.)" Well, you know, we're just following in the footsteps of our founders who raped women, raped slaves, raped children, maimed immigrants, sold children, stole property, broke promises, broke apart families, killed natives... You know, good God fearing down home Christian folk! :/

  4. Who gives a rats behind about all the fluffy ranking nonsense. What students having to pay off debt need to know is that all schools aren't created equal and students from many schools don't have a snowball's chance of getting a decent paying job straight out of law school. Their lowly ranked lawschool won't tell them that though. When schools start honestly (accurately) reporting *those numbers, things will get interesting real quick, and the looks on student's faces will be priceless!

  5. Whilst it may be true that Judges and Justices enjoy such freedom of time and effort, it certainly does not hold true for the average working person. To say that one must 1) take a day or a half day off work every 3 months, 2) gather a list of information including recent photographs, and 3) set up a time that is convenient for the local sheriff or other such office to complete the registry is more than a bit near-sighted. This may be procedural, and hence, in the near-sighted minds of the court, not 'punishment,' but it is in fact 'punishment.' The local sheriffs probably feel a little punished too by the overwork. Registries serve to punish the offender whilst simultaneously providing the public at large with a false sense of security. The false sense of security is dangerous to the public who may not exercise due diligence by thinking there are no offenders in their locale. In fact, the registry only informs them of those who have been convicted.

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