Would-be donor's big promises vex trail of victims

April 14, 2012

Indianapolis not-for-profit executives weren’t the first to believe Joe Bilby’s story of inherited wealth, or the grand plans he had for using it.

This time last year, he was planning an $8 million Arabian horse-breeding facility in Tennessee, according to the Pennsylvania firm that drew up designs. All the work revolved around a 700-acre estate, for which Bilby had not deposited a dime of earnest money.

rop-bilby-jump-041612-15col.jpg Bilby recently was sentenced to probation after pleading guilty to check fraud in Johnson County. (IBJ Photo/Kathleen McLaughlin)

Bilby’s promises about multimillion-dollar charitable gifts and business deals remain unfulfilled, bringing to mind the cliché about offers that sound too good to be true. His story would fit neatly with any number of investment schemes but for the ending. Bilby didn’t walk away with anyone’s money.

“Everybody that hears about it said, ‘Wait a minute, what does this guy have to gain from all this, other than some kind of ego trip?’” said Dan Nissley, a sales representative for King Construction Co. in New Holland, Pa., which sank $51,000 in travel and design work into Bilby’s project. “It just makes no sense.”

Equally puzzling, Bilby promised multimillion-dollar gifts to local cultural institutions, including the Eiteljorg Museum of American Indians and Western Art.

The motive for making big, dramatic promises isn’t always financial, experts said.

“You know all those guys that pretend they were in the military? Why do they do it? Recognition,” said Jack Schafer, a psychologist and former FBI behavior analyst who advises law enforcement and attorneys on deception. Schafer teaches at Western Illinois University in Macomb, Ill.

Bilby didn’t seek public recognition for his philanthropy, but word about a deep-pocketed newcomer from Trafalgar quickly spread in fundraising circles last fall.

Bilby attended the Indianapolis Symphony Orchestra’s season-opening gala in September with his wife, Patricia Jefferson-Bilby, a dean at the University of Indianapolis. She has been on a personal leave since February, a university spokesman said.

There’s nothing about the 70-year-old’s circumstances to suggest he had the means to make good.

Bilby has filed for bankruptcy twice since 1991. He recently lost his home in Trafalgar through foreclosure, and he’ll spend the next six years on probation for check fraud in Johnson County.

Bilby wrote $61,000 in bad checks to contractors who were building horse barns on his property in 2007. At Bilby’s April 5 sentencing, attorney Mary Zahn said his actions stemmed from dire financial straits.

Zahn did not return messages from IBJ. Bilby could not be reached through his last known phone numbers.

Bilby was behind a $17 million anonymous pledge the Eiteljorg announced in November. The museum recently sent a letter to major supporters, saying the gift wasn’t expected to come through.

“We need them now more than ever,” CEO John Vanausdall said. The Eiteljorg is trying to raise $8 million this year toward a capital campaign called Project New Moon and has $4.3 million in valid pledges so far, he said.

Bilby also signed pledge agreements with the Indianapolis Zoo and Indianapolis Symphony Orchestra, according to people familiar with those agreements, and he talked to several other museums, universities and a hospital. Citing donor confidentiality, other organizations haven’t acknowledged Bilby’s pledges.

Executives finally wrote off Bilby after he canceled a Jan. 26 meeting at Meridian Hills Country Club, where he was supposed to deliver checks.

Schafer thinks fundraisers went along with Bilby for months because his story fit their needs.

Likability is another factor that makes people ignore oddities in a story, Schafer said.

Indianapolis fraud examiner Jack Sandlin has even seen auditors fall under the spell of a charming chief financial officer.

The CFO, who worked at a company in Michigan, would take his auditor’s field team—all junior associates—out for lunch and evening entertainment.

“They all just became real buds,” Sandlin said. “He charmed his way through four years of embezzlement … because he’s such a sweet guy.”

bilby-factbox.gifFormer NASCAR team owner Gary Baker made Bilby’s acquaintance last year when he showed up with a real estate agent to look at Baker’s $27.5 million estate in Franklin, Tenn.

“He’s sort of been looking at it ever since,” Baker said. He allowed Bilby and his contractors to access the property, though Bilby hadn’t put down earnest money.

Baker told Bilby recently that he didn’t want to discuss the transaction further until he’d received a deposit. Yet he doesn’t resent the months he lost.

“The crazy thing, he’s a great guy,” Baker said. “So that’s why, I don’t know, I’m one of those live-and-let-live guys.”

King Construction Co. builds stables that look as refined as any old-money manse on Meridian Street. Yet Nissley couldn’t tell Bilby from the rest of the company’s wealthy clientele.

“He comes across as this stately guy,” Nissley said. “He’s got this mellow, baritone voice. He just sounds like somebody who is so believable.”

Bilby said he was the sole heir to an uncle who had owned mines in central America, Nissley said.

That’s slightly different from the stories that circulated in local charitable circles. One version is that he sold a health care business a decade ago. In another, he’s the beneficiary of a trust, which was unbeknownst to him until recently.

Nissley remembers the exact date Bilby entered his life. Bilby called him on Feb. 28, 2011, saying his wife had found the company’s website, and they thought King Construction was the perfect firm to build state-of-the-art barns in Tennessee.

Such a project would require a $35,000 engineering deposit, Nissley told him, but Bilby persuaded him to put it off until their meeting in Tennessee, which included company owner John King.

At the meeting, Bilby offered to put up $100,000 to cover the company’s pre-construction costs. That far exceeded their expectations, Nissley said, and it sealed the deal.

“We went home, started doing design work, but we could not get him to finalize this agreement,” Nissley said.

Finally, Bilby sent him a copy of the agreement with his name typed in red on the signature page. He promised to send a hard copy later.

“Of course, it never arrived,” Nissley said.

At one point, Bilby fell out of touch for about 10 days, Nissley said. When he surfaced, he explained that word about his wealth had gotten out, and he’d taken his family to New York for personal security training.

Nissley looked up the security firm Bilby mentioned.

“Sure enough, that’s what they do is provide security for people with a lot of wealth,” he said. “Of course, we couldn’t contact them to say, ‘Are you doing work for Joe Bilby?’”

Nissley finally saw the red flags last June, thanks to Baker’s farm manager. As she was opening the property gate for a subcontractor, she remarked that she didn’t understand why all that work was taking place when Baker hadn’t received any money from Bilby.

Nissley confirmed the situation with Baker. He also told Bilby he’d found out the sale wasn’t final.

Bilby agreed that work at the farm should stop for the time being, though he blamed events in Baker’s personal life, Nissley said.

“He was much more difficult to get ahold of after that.”•


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