Indianapolis attorney and developer Paul J. Page has agreed to cooperate with federal prosecutors in an investigation that also targets former Marion County Prosecutor Carl Brizzi.
Page on Friday pleaded guilty to a felony wire fraud charge in U.S. District Court in South Bend, agreeing to testify if necessary against co-defendants John M. Bales, a real estate broker, and Bales' partner William E. Spencer in the Northern District case.
Page separately agreed to cooperate with a Southern District investigation that could forestall additional charges against him, Assistant U.S. Attorney Jesse M. Barrett noted during the morning hearing.
Page, 47, could face up to 20 years in prison and a $250,000 fine for the wire fraud charge, but he opted to take his chance on leniency in exchange for his cooperation.
A 14-count indictment in South Bend alleges Page, Bales and Spencer defrauded the state and a bank over their purchase of a building in Elkhart and a subsequent lease deal with the state's Department of Child Services first revealed as part of an IBJ investigation.
A trial in that case is scheduled to begin Jan. 28 and last up to two weeks.
The government agreed to drop the 13 other charges Page was facing, assuming he cooperates as promised. Page also agreed to forfeit the office building in Elkhart he has said he co-owned with Brizzi. Page's sentencing is scheduled for April 12.
Page declined to comment as he left the courtroom Friday to meet with a probation officer.
His attorney, Robert W. Hammerle, said Page was a victim of a scheme orchestrated by Bales. He pointed to the fact that Bales named the company that wound up owning the Elkhart building L&BAB LLC, an acronym for "lazy and broke-ass bitch", an apparent reference to Page and perhaps Brizzi as well.
The government has not filed any charges against Brizzi.
Asked whether the investigation in the Southern District has Brizzi as its target, Hammerle said: "Use your own judgement. Beyond that, I'd refer you to the U.S. Attorney's Office."
A spokesman for the U.S. Attorney's Office in Indianapolis declined to comment.
Barrett declined to comment or provide a copy of the cooperation agreement involving Page, which was was not filed in court.
During the hearing, Barrett described the probe as a "parallel investigation in the Southern District into conduct in which Mr. Page was involved."
U.S. District Judge Robert L. Miller Jr. asked Page several questions about the agreement to ascertain whether the terms were clear. Page acknowledged he could be called to testify in the case against Bales and Spencer, and agreed to stipulations that could extend his potential prison sentence including the fact that the crime required "sophisticated means" and "special skills".
Page acknowledged in court and in the agreement that he concealed from the bank that he received funds from Bales to buy the Elkhart building in 2008.
The two had agreed to split the proceeds, despite the fact Bales' firm, Venture Cos., represented the state in lease deals for state agencies. The firm's contract with the state explicitly banned Venture and its partners and employees from “any ownership interest” or any “attempt to acquire” properties to be leased by the state.
"I'm guilty of these charges," Page told the judge.
Hammerle said the lender has not lost money on the deal since Page honored his deal.
"As long as I've done this, the toughest cases, right or wrong, are when you like your clients," Hammerle said. "I like Mr. Page."
Page was admitted to the Indiana bar in 1990 and does have a history of discipline, according to the Indiana Roll of Attorneys. The details of the discipline are not posted on the Indiana Supreme Court's website.
Jason Barclay, an attorney for Bales, said his client has not entertained or accepted a deal with federal prosecutors.
"We're looking forward to proving his innocence on January 28," he said.
The Indianapolis Business Journal is a sister publication of Indiana Lawyer.