An OmniSource executive says the company wouldn't have made the settlement with the Marion County prosecutor if it knew more than a third of the cash wouldn't be going to Indianapolis police for training programs.
When Marion County Prosecutor Terry Curry announced he was dropping criminal and civil charges against scrap-metal recycling firm OmniSource Inc., he said the company had agreed to make a $300,000 contribution, as a show of good faith, to fund law enforcement training programs.
In reality, the funds are being processed like any other civil forfeiture involving an illegal business enterprise, and less than $200,000 of the settlement cash will actually make it to the Indianapolis Metropolitan Police Department.
First in line to be paid: Contingent-fee private attorneys Greg Garrison, who filed the initial civil forfeiture case while under contract with former Prosecutor Carl Brizzi, and Mark K. Sullivan, an outside attorney brought on by Curry as Garrison's co-counsel. The pair will split 15 percent of the settlement, or $45,000, plus filing fees.
The remaining $255,000 will be split, with 20 percent going to the prosecutor's office, 75 percent going to IMPD, and 5 percent for a joint fund administered by the prosecutor and director of public safety, said Chief Deputy Prosecutor David Rimstidt.
The total going to IMPD, about $191,250, does not sit well with OmniSource officials.
The company would not have agreed to the deal if they knew the settlement would pay an "ounce of tribute to this scurrilous investigation," said Ben Eisbart, a vice president at Fort Wayne-based Steel Dynamics Inc., OmniSource's parent company.
OmniSource intended the "donation" to be used for law enforcement programs, including training on how to prevent scrap-metal theft, an extension of the company's own more-than-$1 million investment in anti-theft measures at its five local scrap yards, Eisbart said.
"The citizens of Indianapolis will be infinitely better served by having well-trained individuals than by paying some lawyers," he said. "We're beside ourselves. We want to meet with the prosecutor to find out where it went off the track. This was never about money."
The $300,000 roughly matches the amount of cash authorities seized from local OmniSource scrap yards in 2009, after a year-long investigation into the company's alleged purchases of stolen cars, boats, gutters and wiring.
A Marion County grand jury returned a 16-page indictment against OmniSource in October 2010, charging the company with three counts of corrupt business influence and five counts of attempted receipt of stolen property.
There was plenty of evidence to prove employees of OmniSource bought stolen property, Curry said. The problem was proving employees knew the metal had been stolen. And after a judge threw out the corrupt business influence charge, that left just five counts of attempted stolen property.
Curry said he decided against investing the resources in pursuing the charges that at most would result in a fine of $10,000 per count and no jail time for anyone. The seized cash will be returned to OmniSource, which will then make its $300,000 contribution.
"It's fair to say there was a negotiation on all the terms of the ultimate agreement," Curry said. "We will process it as a civil forfeiture."
The prosecutor's office is no longer using outside contingent-fee attorneys to handle civil forfeitures, Curry noted, though he said he had no choice but to honor the prior agreement between Brizzi and Garrison.
Even though Garrison stands to collect a cut of the settlement, he said he was livid when he heard Curry would be dropping the charges.
In his forfeiture filing against OmniSource of behalf of Brizzi, Garrison wrote that the company buys millions of dollars worth of stolen metal per year as its “regular way of doing business” and operates in a similar fashion all over the state.
"Letting those guys go in the face of the powerful evidence that supported both the criminal and civil cases is inconceivable to me," Garrison wrote in an e-mail to Indianapolis Business Journal on Thursday. "Damn."
OmniSource had described the civil suit, which sought the forfeiture of five Indianapolis-area scrap yards and a foundry facility in Hendricks County, as part of a plan by Brizzi and Garrison to “extract money” under threat of civil forfeiture. Garrison filed the case during Brizzi's last week as prosecutor.
This story originally ran in the July 15, 2011, IBJ Daily. The IBJ is a sister pubilcation of Indiana Lawyer.