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Prosecutor Brizzi defends no-cost real estate deal

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Brizzi Brizzi

Marion County Prosecutor Carl Brizzi paid nothing for a 50-percent stake in an Elkhart office building he acquired in partnership with a local defense attorney.

Brizzi and Paul Page, an attorney and condo developer, bought the 15,200-square-foot building at 1659 Mishawaka St. in February 2008 through a company called L & BAB LLC. About five months later, the Department of Child Services agreed to lease 13,000 square feet in a 10-year, $2.5 million deal.

Elkhart factboxPage, an attorney with locally based Baker Pittman & Page and principal in Page Development, acknowledged in interviews with IBJ that Brizzi—whom he called an “equal partner” in the deal—did not contribute cash and isn’t named on the loan the pair used to buy the building.

Brizzi has said in disclosure documents that his equity interest in the property is worth $50,000 to $100,000.

The idea of an elected prosecutor teaming with a defense attorney to buy a building without putting any of his own money or credit at risk gives the appearance of an ethical lapse, said Henry C. Karlson, an Indiana University emeritus professor of law.

“A prosecutor, like a judge, exercises great discretionary power,” Karlson said. “If this man’s clients are being prosecuted in Marion County, in my opinion, there is an inherent conflict of interest because of the business relationship. That conflict would disqualify not just Carl Brizzi, but everyone in his office.”

Records show Page has represented clients in at least 12 criminal cases in Marion County, for traffic-related offenses, since he partnered with Brizzi. Page said the decision to co-invest had nothing to do with Brizzi’s elected position.

Brizzi, a Republican who has opted not to seek re-election after his second term expires at the end of 2010, said in a statement that the Prosecutor’s Office has checks and balances in place to avoid “even the appearance of favoritism influenced by either campaign contributions or outside business dealings.”

“Campaign finance laws and the rules governing the conduct of prosecutors allow for outside business ventures,” Brizzi wrote. “This real estate investment was no different. It was done ethically and by the book.”

Rainmaker

Page said Brizzi earned his stake in the Elkhart building by bringing him an attractive investment opportunity. He said Brizzi and John Bales, a local real estate broker and Brizzi business partner, approached him about the deal, which eventually paid Bales about $100,000 in commission.

No one would say how the building owners arrived at the name L & BAB.

“People bring things to the table—it doesn’t have to be money,” Page said. “If someone has an idea, the rainmaker is entitled to it. If I bring someone to the law firm, I get paid because I make the rain. Bales really put the deal together, but those two guys were friends so I’m assuming that’s how it all developed. I’m the investor, I get the loan.”

Page would not say how much is owed on the building’s loan. Records show the building, a former call center, was most recently assessed for tax purposes at $906,000.

Page said annual lease payments of more than $248,000 from the Department of Child Services cover the loan payments and building expenses. But if that changes?

“I guess I can sue him,” he said, referring to Brizzi. “If it falls south and defaults, he’s going to be in it to me for 50 percent. If I’ve got to pay the bank $10, he owes me $5. It’s not like he’s not at risk.”

Page said Brizzi has not partnered on any of his other deals. Those include the Villagio at Page Pointe condo project in Indianapolis and a handful of condo buildings in Florida.

“This is a one-shot deal,” he said. “I don’t know them that well.”

Bales, a principal at the locally based real estate brokerage Venture Cos., said in an e-mail that he dealt only with Page on the Elkhart deal, and “never saw a document” with Brizzi’s name on it.

“I have never been part of the ownership,” Bales wrote of the Elkhart property. “I do not and have never had an ownership interest in any property leased by the state.”

Bales, who has the exclusive contract to represent state agencies looking for office space, is one of Brizzi’s largest campaign donors and has partnered with the prosecutor on a handful of real estate deals, including a bank branch in Broad Ripple. They tried to raise $30 million in 2007 for a fund to buy distressed residential and commercial projects in Florida and Indiana, but the plan fizzled because of insufficient interest from investors.

Brizzi was preparing to take over as prosecutor in late 2002 when he met Bales, who had handled the department’s lease of 71,000 square feet in the 251 East Ohio building. As the pair began partnering on private real estate deals, Brizzi continued to direct more lucrative work to Bales, including three amendments to the original Prosecutor’s Office lease.

Asking questions

The FBI has been asking questions about Brizzi’s real estate and other business dealings while in office. Those include ventures with another friend and prolific Republican donor, Timothy Durham, the target of a securities fraud investigation. Durham was Brizzi’s finance chairman for his 2006 re-election campaign.

Brizzi, 41, also has faced criticism over $29,000 in campaign contributions he accepted from businessman Harrison Epperly at the same time an attorney for Epperly’s daughter was seeking her early release from prison. She had been sentenced to 110 years in 1991 in a murder-for-hire scheme.

Brizzi’s office supported the sentence modification, and Paula Epperly Willoughby was freed in July 2009. Brizzi later returned the contributions and said they were not a factor in his decision.

Brizzi, who also owns a 10-percent stake in the restaurant Harry & Izzy’s, has managed to build an impressive real estate portfolio without much money or extensive assets. He earns $125,000 a year as prosecutor. A 2009 divorce settlement shows Brizzi and his wife had three residences, each with first and second mortgages. He pays about $1,000 a month in child support for his four children.

The Indiana State Bar Association decided about 15 years ago that prosecutors and criminal defense attorneys are allowed to own office buildings together, said Stephen Johnson, executive director of the Indiana Prosecuting Attorneys Council.

“As long as it’s strictly a real estate deal,” Johnson said. “If one was the tenant and the other owed rent to the other, that would create a problem.”

Karlson isn’t convinced Brizzi’s Elkhart deal can even be considered a real estate investment, which typically would require some sort of economic contribution.

“It might appear to some that, in effect, the defense counsel—through this transaction—is funneling money to the prosecutor in the form of a bribe,” Karlson said. “I’m not saying it’s happening, but it is an appearance of evil.”•

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  • What About The Kids?
    Notwithstanding legal and ethic issues raised, I can't help but wonder - what about the four children (ages 16 to 6? Is this another example of our bvery broken child support rules? Does our state's "computation chart" truly square up at $1,000 per month for four kids when one's salary is at $125,000 annually? Sure hope there's more to it than the story reported.

    As usual, the kids have to muddle through divorces --yeah rah Indiana - home of protecting the institution of marriage. Well here's hoping this Dad elects to contribute above and beyond the court required in more ways than money! In the end it's the impact on our kids we should be primarily concerned with.
  • SHOCK
    UN-BE-FREAK-ING-LEAVE-A-BULLL
    (with accent on the BULL)
  • Investigate Page Political Corruption
    Investigative reporting by IBJ into the Page Development (LLC) condomoniums in the city is crucial to the Brizzi & associates issue. Spirit Lake Condominiums (Page resides in separate house near property.) and the Villagio are two Page developments. The former is the one north of Broad Ripple with major issues. Owners of units in the Villagio need to be aware of any potential construction practices before Page relinquishes management to the homeowners.
  • Paul Page,(Brizzi & Associates)
    Media correction regarding where Paul Page resides: Paul Page does not live in a condo north of Broad Ripple. He lives in a gated house adjacent to the condominiums, which he developed. The "luxury" condominiums have catastrophic new construction flaws with accompanying major asssessments. New roof on all 8 bldgs., water poured through windows with substandard caulk, terraces with water ingress, heating and cooling units had to be reattached, raw sewage between some walls, exterior EFIS has fallen off, out-of-warranty appliances, etc. etc. etc. Paul Page formed an LLC to protect himself and his family from claims, and he has "political connections." I live at this place and was told it would be hard to sue due to these connections. I now have that "ahhah" moment. Most all of subcontractors were fly-by-nighters and are now out of business. It's not surprising that he and Brizzi are associates. Birds of a feather.......... "A man is known by the company he keeps." Quite a gang!
    • carl's big problem
      How does Carl's issues affect GOP Mark Massa? See for yourself at Indy Political Stock Exchange tracking the poltical winners and losers in Indy. http://ipse2010.blogspot.com/
    • Houdini cannot escape this one
      From thy master himself, I say I could not escape this one....

      Carl appears to often operate with impunity in the courtroom of his life, without the sunshine of any one above him in Indiana politics who will dare to do anything.

    • Brizzi/bales/etc. etc.
      the man in charge of the indiana social services is former Marion County Juvenile Court Judge James Payne. What a surprise that he would approve an over market rate lease. Its no surprise he also found a job for brizzi's wife.

      As for Page, there isn't anything he won't do. He's been suspended once for allowing a client to commit perjury, and he has been playing his connection to brizzi for years as a way to land high priced legal fees that his meager skills would not command.
      Perhaps the IBJ should be looking into the community court building lease that Bales, Brizzi, and others have a piece of.
      • How is Brizzi going to defend this?
        Carl, Carl, Carl...you can't do stuff like this. You got caught, darling...it's over. Time to cut a deal.

        Securities NO NO: Search for BRIZZI in this disclosure filed today by CLST:

        http://www.fairfinanceinvestors.com/CLSTHoldingsInc8K-20100323.pdf
      • Here's the form to file a complaint against attorneys Carl Brizzi and Tim Durham

        Don Lundgren has been replaced by Seth. He can be reached at 317-232-1807. While you are talking to him ask if they want to consider documenting on the record the fact that Don was briefed fully about Brizzi and Durham, and then turned around after these briefings and went to work where? Oh yeah, the firm representing at least Durham.

        Nothing like brotherly love in good ol' white-collar-crime ridden Indianapolis.

        http://www.in.gov/judiciary/discipline/complaining.html
      • re
        JohnnyO, c'mon, you cannot receive COMPENSATION OF ANY SORT for arranging a real estate transaction without a real estate license, which Carl does not have.

        As for his previously unemployed wife (according to his campaign disclosures) who suddenly landed a top level govt position, give me a break. You want to tell me that Carl Brizzi just knew to go locate a building in Elkhart, Indiana--a town that is not exactly the Geist party he normally enjoys as his lifestyle--and he just happened to "locate it" for a free 50% interest just in time for a signficantly above market rate triple net lease rent.

        How stupid do you think the Indiana public is?

        But, hey, now that Don is over at Indy's Barnes and Noble without disclosing his internal investigation on Brizzi to them and the FACT that he was fully briefed on Cellstar and some other issues associated with the firm now representing you know who, well, maybe Carl isn't so stupid after all because it doesn't appear anyone in Indiana is going to do anything to him at all.
      • John Q Public is right
        There is enough to sort through without having wrong information brought into the picture. It is a distraction and puts the IBJ and anyone who uses the information at risk.
      • Re: Ooops...Melanie
        I could care less about any of the people involved but folks should get their facts straight before posting. Melanie does work for Bureau of Child Care, which is part of FSSA's Division of Family Resources, NOT DCS. Also, I didn't read where Carl has actually received any commission or cash compensation as others have said/implied. Yes, he has a 50% stake but "The Indiana State Bar Association decided about 15 years ago that prosecutors and criminal defense attorneys are allowed to own office buildings together..."
        • Triple Net?
          If anyone has information this is in fact a NNN triple net lease, please forward it to me. Publicly accessible information preferred.

          www.fairfinanceinvestors.com
        • Sorry that Rev Proc does not apply
          This is a high quality 10 year State of Indiana lease so its income to Mr. Brizzi. It's certainly worth more than $50,000 to $100,000 he professes. The lease payments are $2,248,000 for the lease term... Find out the Recorded Mortgage amount (likely less than a $1,000,000). Difference is equity.
          Go look on Marcus and Millichaps website to see how much they had it listed for!

          The $50,000 to $100,000 should be a good starting point for taxable income for Mr. Brizzi for his RAINMAKER SERVICES but his interest is worth much more than that. Its a NNN (Triple Net Lease) so the State pays almost everything for the building operations as a CAM charge....

          Lets see for Mr. Page to practice law in Marion County opposing his business partner perhaps he can sell his interest to a relative or donate it to a charity of his choice... someone deserving of the ill gotten gain.
          • Taxable Income for the Rainmaker
            Rev. Proc. 93-27, 1993-2 C.B. 343, provides generally that if a person receives a profits interest for the provision of services to or for the benefit of a partnership in a partner capacity or in anticipation of becoming a partner, the Service will not treat the receipt of such an interest as a taxable event for the partner or the partnership. The revenue procedure does not apply if (1) the profits interest relates to a substantially certain and predictable stream of income from partnership assets, such as income from high-quality debt securities or a high-quality net lease; (2) within two years of receipt, the partner disposes of the profits interest; or (3) the profits interest is a limited partnership interest in a â??publicly traded partnershipâ?? within the meaning of § 7704(b).

          • What's In A Name?
            Come on, Corey, you must know what L & BAB means or you wouldn't have asked. Don't keep us all in suspense.
          • Jim Cochran arrested and in Hamilton County Jail--hearing today at 1:15
            http://www.hamiltoncounty.in.gov/app/sheriff/charges.asp?JacketID=-253653
          • Bar
            I think the Bar Association might be interested in some of Brizzi's deals. Hope someone nails this guy and all of his "friends". Abuse of power.
          • ...
            You can post all you want on message boards like this, but at the end of the day Brizzi and Durham are laughing over the millions they have pocketed...nothing happens....no one is charged...so why should they care?

            None of you are using your law licenses to file formal complaints...you just want to post on here and yap about it...
          • That Patina Don't Shine No More
            â??This is a one-shot deal,â?? he said. â??I donâ??t know them that well.â??

            Really? You really wanted that in print...You do not know them that well. Wasn't it a 2 shot deal. Wasn't another lease brought to you in 2009...

            How much research did you do to locate that piece of property?

            You were never on the same flight to Florida (Certain Agencies can get that information)... If Paul Page does not know them that well why would they bring him the deal? Cause he would cut Carl in the deal? Is that why Carl brought the deal to Paul?

            When was Carl placed in the deal? WHY???
          • SMELLS LIKE ACID RAIN
            There is a 2nd State Lease at that location from 2009. Does any of this involve Federal Funding? Is DCS funded from the Federal Government as well... The Leases are available on the Indiana Department of Administrations website.

            How do I get a no bid state lease. How does a Criminal Defense Attorney in Marion County mysteriously get under contract a piece of real estate and THEN once the State LEASE is secured and Signed he closes on the Real Estate. Has Paul Page ever been to Elkhart County before? He have any other holdings in Elhart County? I am sure some other local business man/woman in Elkhart County would have like to get a NO BID STATE LEASE...
          • Venture Companies
            Lets see Bales is quoted as never seeing a document with Carl's name on it? Did Greg Rankin (John's Partner?)
          • Guilty
            Paul Paige and Carl Brizzi cut a deal.

            Paul Paige puts up the cash for the deal and Paul Paige's clients gets preferential treatment from Carl Brizzi and the Prosecutor's office.

            Paul Paige and Carl Brizzi are guilty. It's a bribe!!! CONVICT THEM BOTH!!!

            • Am I Following This?
              A private firm, with a state contract, funnels state real estate deals to his friends, who get free equity stakes (for being a "rainmaker"), and he gets commission from both sides? And then pours cash into his friend's campaign? How is this not illegal?
            • Indiana code as to payment of commission or any type of compensation to non-licensees: NOT ALLOWED
              Mr. Brizzi, we have a problem.

              http://www.in.gov/legislative/iac/T08760/A00010.PDF
            • Re


              No, Carl does not have a real estate license. But, then, he doesn't seem to follow the law with regards to anything he does these days, does he?

              Would SOMEONE GET THIS CREEP OUT OF OFFICE? Here's a perfect opportunity to:

              NO real estate license:

              https://extranet.in.gov/WebLookup/SearchResults.aspx

              CANNOT TAKE COMPENSATION FOR ARRANGING ANY TYPE OF REAL ESTATE TRANSACTION WITHOUT A LICENSE:

              876 IAC 1-1-21 Associating with unlicensed person; penalty

              Authority: IC 25-34.1-2-5

              Affected: IC 25-34.1-6-1.1

              Sec. 21. Any principal broker found guilty of associating with any person and allowing said person to perform any of the acts

              set forth in the definition of a licensee, whether an initial applicant or a transfer, before the said person is properly licensed, shall

              be, after notice and hearing, subject to suspension or revocation of his license. (Indiana Real Estate Commission; Rule 22; filed Sep

              28, 1977, 4:30 pm: Rules and Regs. 1978, p. 800; filed Dec 11, 1986, 10:40 am: 10 IR 878; readopted filed Jun 29, 2001, 9:56 a.m.:

              24 IR 3824)

              876 IAC 1-1-22 Listing agreements; prohibition

              Authority:





              from:



              [PDF]

              TITLE 876 INDIANA REAL ESTATE COMMISSION
              File Format: PDF/Adobe Acrobat - Quick View
              876 IAC 1-1-21 Associating with unlicensed person; penalty. Authority: IC 25-34.1-2-5. Affected: IC 25-34.1-6-1.1. Sec. 21. Any principal broker found ...
              www.in.gov/legislative/iac/T08760/A00010.PDF - Similar


            • Oops, someone should check Indiana law regarding real estate commissions
              I don't believe you can be paid as a "rain maker" for real estate transaction under Indiana law, now can you?
            • Double header for Brizzi today--look at this other story on IBJ that includes him
              http://www.ibj.com/article?articleId=18779
            • re
              Did everyone forget that Melanie Brizzi, Carl's wife AT THE TIME, had just been appointed to what position? Child Care Administrator, Bureau of Child Care.

              And who is the income-paying tenant, paying higher-than-market rates for the building?

              CHILD CARE SERVICES!!!!

              Isn't that special.
              • Taxman Comenth
                Do people realize that the $50,000 stake Brizzi was given in that building is taxable income? Does anyone think he paid federal taxes on that $50,000? I bet you anything he didn't, because if he did, he would have to shell out about $15,000 in taxes on the $50,000 investment share he was given. Forget the FBI, Brizzi is in major, major trouble with the IRS. If he doesn't spend some time in prison I'll be shocked.

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              1. You are correct that Obamacare requires health insurance policies to include richer benefits and protects patients who get sick. That's what I was getting at when I wrote above, "That’s because Obamacare required insurers to take all customers, regardless of their health status, and also established a floor on how skimpy the benefits paid for by health plans could be." I think it's vital to know exactly how much the essential health benefits are costing over previous policies. Unless we know the cost of the law, we can't do a cost-benefit analysis. Taxes were raised in order to offset a 31% rise in health insurance premiums, an increase that paid for richer benefits. Are those richer benefits worth that much or not? That's the question we need to answer. This study at least gets us started on doing so.

              2. *5 employees per floor. Either way its ridiculous.

              3. Jim, thanks for always ready my stuff and providing thoughtful comments. I am sure that someone more familiar with research design and methods could take issue with Kowalski's study. I thought it was of considerable value, however, because so far we have been crediting Obamacare for all the gains in coverage and all price increases, neither of which is entirely fair. This is at least a rigorous attempt to sort things out. Maybe a quixotic attempt, but it's one of the first ones I've seen try to do it in a sophisticated way.

              4. In addition to rewriting history, the paper (or at least your summary of it) ignores that Obamacare policies now must provide "essential health benefits". Maybe Mr Wall has always been insured in a group plan but even group plans had holes you could drive a truck through, like the Colts defensive line last night. Individual plans were even worse. So, when you come up with a study that factors that in, let me know, otherwise the numbers are garbage.

              5. You guys are absolutely right: Cummins should build a massive 80-story high rise, and give each employee 5 floors. Or, I suppose they could always rent out the top floors if they wanted, since downtown office space is bursting at the seams (http://www.ibj.com/article?articleId=49481).

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