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Racketeering case nets $108 million in damages

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A federal judge has ordered an ex-mayor and top allies to pay more than $108 million in damages on a civil racketeering case, but in doing so he's rejected the Indiana Attorney General's most novel and far-reaching legal arguments centered on public corruption in East Chicago.

In issuing his 53-page decision late Thursday afternoon, U.S. Senior Judge James Moody criticized the state's top attorney for failing to flush out legal arguments or provide enough rationale, trying to basically bypass due process in targeting non-parties, and going beyond the scope of federal and state Racketeer Influenced Corrupt Organizations (RICO) statutes.

The ruling comes in State of Indiana and City of East Chicago v. Robert A. Pastrick, et al, No. 3:04-CV-506, a 6-year-old case that AG Greg Zoeller inherited when he took office and involves the decade-old "sidewalks-for-votes" scandal that helped bring down a Lake County political titan. The civil racketeering case went after former mayor Robert Pastrick, and his top aides James Fife III and missing councilman Frank Kollintzas, for misusing $24 million in public money to pave sidewalks and driveways to gain votes in the 1999 Democratic primary.

In assessing the damages, Judge Moody counted the $27.3 million originally totaled from the sidewalks-for-votes scheme - $24 million plus legal fees and other financial costs - and added on $8.7 million in prejudgment interest, which is four years worth at an 8 percent interest rate. With treble damages that he determined were allowed through his interpretation of state and federal law, the total came to $108,007,584.33.

But in the legal points the AG made beyond the misused public money, Judge Moody rejected those proposed remedies and essentially told the state agency it was overstepping its authority. Most of the second-half of his order focuses on this, pointing out in multiple stops that the AG has failed to offer authority or missed the point of caselaw.

Judge Moody determined that the city couldn't recover salary or compensation from Pastrick or the aides because that isn't allowed by the civil RICO statute, that plaintiffs couldn't recover money paid to Fife's consulting firms, and that the court didn't have the authority to issue an injunction banning the defendants from holding any public office anywhere in the U.S. He also admonished the AG for trying to open up the finances of for-profit and non-profit organizations - non-parties - that received casino money and provided some of that for local development projects. The AG had offered possible remedies the court might impose, such as civil forfeiture, a state-ordered "forensic audit" of non-party organizations, and having the court serve as a receiver if any money might be recouped from them.

"The obvious and most critical problem with plaintiffs' request is that it cannot be reconciled with principles of due process," Judge Moody wrote, relating to one of the AG's proposed remedies - a forensic audit. "These core, intertwined due process issues prevent the court from ordering the remedy plaintiffs seek in this case."

Zoeller wasn't available for comment by Indiana Lawyer deadline about the legal aspects of the judge's decision, but his office released a statement describing this as a victory for the state.

"I am enormously pleased that the federal judge awarded triple damages against former Mayor Pastrick and the other remaining defendants as a symbol of how brazen and shameless the public corruption was in the municipal government of East Chicago during the Pastrick regime," Zoeller said in the statement.

The statement says the AG will now dedicate all necessary efforts to collect that judgment, which attorneys involved say is largely uncollectable because of the amount and the defendants' little money available to put toward it. The AG's office now can file its brief outlining attorney fees and costs associated with the case.

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  1. Unlike the federal judge who refused to protect me, the Virginia State Bar gave me a hearing. After the hearing, the Virginia State Bar refused to discipline me. VSB said that attacking me with the court ADA coordinator had, " all the grace and charm of a drive-by shooting." One does wonder why the VSB was able to have a hearing and come to that conclusion, but the federal judge in Indiana slammed the door of the courthouse in my face.

  2. I agree. My husband has almost the exact same situation. Age states and all.

  3. Thanks Jim. We surprised ourselves with the first album, so we did a second one. We are releasing it 6/30/17 at the HiFi. The reviews so far are amazing! www.itsjustcraig.com Skope Mag: It’s Just Craig offers a warm intimacy with the tender folk of “Dark Corners”. Rather lovely in execution, It’s Just Craig opts for a full, rich sound. Quite ornate instrumentally, the songs unfurl with such grace and style. Everything about the album feels real and fully lived. By far the highlight of the album are the soft smooth reassuring vocals whose highly articulate lyrics have a dreamy quality to them. Stories emerge out of these small snapshots of reflective moments.... A wide variety of styles are utilized, with folk anchoring it but allowing for chamber pop, soundtrack work, and found electronics filtering their way into the mix. Without a word, It’s Just Craig sets the tone of the album with the warble of “Intro”. From there things get truly started with the hush of “Go”. Building up into a great structure, “Go” has a kindness to it. Organs glisten in the distance on the fragile textures of “Alone” whose light melody adds to the song’s gorgeousness. A wonderful bloom of color defines the spaciousness of “Captain”. Infectious grooves take hold on the otherworldly origins of “Goodnight” with precise drum work giving the song a jazzy feeling. Hazy to its very core is the tragedy of “Leaving Now”. By far the highlight of the album comes with the closing impassioned “Thirty-Nine” where many layers of sound work together possessing a poetic quality.

  4. Andrew, if what you report is true, then it certainly is newsworthy. If what you report is false, then it certainly is newsworthy. Any journalists reading along??? And that same Coordinator blew me up real good as well, even destroying evidence to get the ordered wetwork done. There is a story here, if any have the moxie to go for it. Search ADA here for just some of my experiences with the court's junk yard dog. https://www.scribd.com/document/299040062/Brown-ind-Bar-memo-Pet-cert Yep, drive by shootings. The lawyers of the Old Dominion got that right. Career executions lacking any real semblance of due process. It is the ISC way ... under the bad shepard's leadership ... and a compliant, silent, boot-licking fifth estate.

  5. Journalism may just be asleep. I pray this editorial is more than just a passing toss and turn. Indiana's old boy system of ruling over attorneys is cultish. Unmask them oh guardians of democracy.

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