Former State Rep. Eberhart pleads guilty to felony fraud involving gaming company implicated in other indictments

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Sean Eberhart

Former Indiana State Rep. Sean Eberhart has agreed to plead guilty to a federal charge of conspiracy to commit honest services fraud as part of his dealings with a gaming company that has landed others in prison.

Eberhart, a Republican from Shelbyville, faces up to five years in prison, a $250,000 fine and three years of supervised release, as well as an order to pay $60,000 in restitution.

The former lawmaker, represented by Chicago attorney Patrick J. Cotter, signed the guilty plea on Tuesday, according to online court records. The U.S. Attorney’s Office for the Southern District of Indiana announced the plea on Friday following media reports late Thursday.

Eberhart is no longer in office as he did not seek reelection in 2022.

According to an information dated Thursday, Eberhart used his position as a member of the Indiana House Committee on Public Policy to conspire with Spectacle Entertainment to obtain favorable terms for the gaming company to relocate two casinos. In exchange, Eberhart would be offered a lucrative position with the company.

The Spectacle representative in the conspiracy is identified in court documents only as “Individual A.” Indiana Lawyer has not yet confirmed the identity of that individual.

Spectacle was created by Individual A after Caesars Entertainment Corporation acquired Centaur Holdings LLC in 2018, the information says. Previous reporting from The Associated Press says former state representative John Keeler and longtime Indiana casino exec Rod Ratcliff led a group that formed Spectacle.

Centaur had been the owner of the Indiana Grand Casino and Racetrack in Shelbyville, located in Eberhart’s former district.

According to the information, “Spectacle utilized the same office space that was previously utilized by Centaur. Many of the executives of Centaur continued in substantially similar roles as executives of Spectacle.”

In late 2018, Spectacle sought to purchase two casinos located on Lake Michigan in Gary — Majestic Star I and Majestic Star II — as well as the accompanying licenses. The company wanted to move the casinos to inland locations in Gary and Vigo County, which required legislative approval.

That legislation became the 2019 bill known as House Enrolled Act 1015.

The final version of the bill, among other things, allowed Spectacle to transfer the licenses for the two casinos; authorized the relocation of those two licenses to inland locations in Gary and Terre Haute; reduced a transfer fee to be paid by Spectacle from $100 million to $20 million; and authorized tax incentives that would benefit Spectacle.

In exchange, Eberhart accepted a $350,000 position with Spectacle that had been offered by Individual A.

That position was offered in February 2019, according to the information. The next month, during a Public Policy Committee hearing, Eberhart advocated to lower the $100 million transfer fee.

A report from Indianapolis Business Journal quotes Eberhart as saying during the meeting, “That’s an extreme amount of money.”

Keeler, who was then general counsel for Spectacle, was also quoted by IBJ as saying, “It’s a pretty significant price. But it’s a process and we’ve gotta work through it.”

As for the tax incentives, the information says Eberhart advocated on the House floor for a “20% tax rate that would save Spectacle tens of millions of dollars.”

Finally, when the bill was in conference committee, Eberhart “proposed removing one of the Conference Committee chairs who was perceived as holding up passage of the Gaming Bill,” the information says.

The conference committee members included Indiana House Speaker Todd Huston, R-Fishers; former Rep. Terri Austin, D-Anderson; Sen. Mark Messmer, R-Jasper; and former Sen. Tim Lanane, D-Anderson.

The information cites a text exchange with a “person” who asked Eberhart, “What is her issue though? Where did this come from?” Eberhart replied, “No idea. I talked to her 3 different times. Told her I couldn’t believe she would let the bill die because of hold harmless language.”

The text exchange occurred on April 24, 2019, according to the information, and HEA 1015 was approved later that night.

Austin, Messmer and Lanane all voted for the bill on final passage, while Huston was excused from voting.

The following day, Eberhart texted the person, “We got work to do and 2 casinos to open. … Meeting with [Individual A] later this week.”

The signed plea agreement says of Eberhart, “I make no claim of innocence, and I am freely and voluntarily pleading guilty in this case. … I am pleading guilty as set forth in this Plea Agreement because I am guilty of the crime(s) to which I am entering my plea.”

Sentencing will be left to the discretion of the judge — here, Judge Matthew Brookman of the Indiana Southern District Court — but the government agreed to recommend a sentence at the lower end of the advisory range. A sentencing date has not yet been set.

As part of his plea agreement, Eberhart has waived his right to appeal his conviction or sentence.

The case is USA v. Eberhart, 1:230cv-00170.

Other former lawmakers involved with Spectacle Entertainment have also found themselves in federal court.

That includes Keeler, who had been general counsel and co-owner of Centaur before it was acquired.

Keeler was indicted in September 2020 and pleaded guilty in April 2022 to filing a false tax return. He was sentenced to two months in prison and was fined $55,000. His law license was also suspended.

According to his plea agreement, Keeler claimed a business expense of $41,000 that Centaur paid to a political consultant who made contributions through a straw donor to the campaign of former State Sen. Brent Waltz, who unsuccessfully ran for Congress in 2016.

Waltz was indicted alongside Keeler and pleaded guilty in April 2022 to making and receiving conduit contributions and making false statements to the FBI. He was sentenced to 10 months in prison.

The indictments of Keeler and Waltz led to Spectacle being forced from ownership of the Gary and Terre Haute casino projects.

For his part, Ratcliff was permanently banned from the state’s gambling industry as part of a March 2021 settlement agreement between Ratcliff and the Indiana Gaming Commission, according to IBJ. Ratcliff had been chairman and CEO of both Centaur and Spectacle.

The revocation of Ratcliff’s license came after the commission discovered alleged wrongdoing, including funneling money from Centaur into Ratcliff’s personal gambling account and repeatedly concealing financial information from the commission, IBJ reported.

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