SOUTH BEND—Federal authorities suffered a near-complete defeat in their efforts to prosecute the players in an unusual real estate deal in Elkhart, a setback that ultimately doomed an ambitious public-corruption case targeting former Marion County Prosecutor Carl Brizzi.
U.S. District Court Judge Robert Miller Jr. sentenced Indianapolis defense attorney Paul J. Page to probation on Monday, nine months after a South Bend jury returned not-guilty verdicts against two co-defendants. Page pleaded guilty before trial.
Federal prosecutors and an FBI-led task force had hoped to use the Northern District of Indiana case—and a Marion County case against a former deputy prosecutor—to turn defendants they believed could help convict the former prosecutor for accepting bribes.
But the three-year-old case unraveled when the government's best hope for providing information implicating Brizzi, the real estate broker John M. Bales, beat the 13 felony charges he was facing. And Page and a former Brizzi lieutenant who also struck a deal in exchange for cooperation maintained they had no evidence to suggest Brizzi took bribes.
Newly filed court documents detail for the first time the government's strategy as investigators built a case against Brizzi that never made it to a courtroom.
Most notably, Brizzi is alleged to have pocketed more than $48,000 in distributions from his ownership of the state-leased office building in Elkhart, even though he was never officially listed as an owner. Prosecutors had hoped to prove the ownership interest was a bribe from Page, a defense attorney who received favorable treatment from the Marion County Prosecutor's Office.
Of particular interest was a drug case involving a Page client, Joseph Mobareki. Brizzi personally ordered a lenient plea deal for Mobareki and for the return of $10,000 of seized drug money to Page for attorney's fees.
Eight days after the plea agreement and 14 days after the Prosecutor's Office had returned the cash, Brizzi and Page each received $25,000 from their interest in the Elkhart property. Brizzi didn't put up any cash or co-sign a loan on the bulding.
Brizzi and Page each went on to receive an additional $23,300 in distributions from the Elkhart property in 2010 and 2011. The cash distributions to Brizzi were revealed for the first time in a Nov. 1 court filing in a case involving former deputy prosecutor David Wyser.
But Page insisted in interviews with investigators that he gave the equity to Brizzi as a "finder's fee" for bringing him the deal, not as a bribe. Brizzi had heard about the deal through Bales, a friend and business partner who floated the down payment Page used to buy the building.
Page did not disclose to his lender the $362,000 down payment he had received—and would have to repay to Bales—which led to Page's wire fraud conviction. He'll spend two years on probation and pay a $10,000 fine for the crime.
Prosecutors argued the deal violated an agreement between Bales' firm, Venture Cos., and the state that barred the company from direct or indirect ownership of properties where state agencies leased space. Venture had a contract to handle the state's leasing.
But the jury in Elkhart didn't hear anything about Brizzi, leaving a fraud case that seemed to hang on technicalities and lacked an identifiable victim. They acquitted both Bales and business partner William E. Spencer.
Separately, prosecutors believed Brizzi accepted $25,000 in campaign contributions from the father of a convicted murderer, Paula Willoughby, as a bribe to modify her prison sentence.
But David Wyser, Brizzi's top deputy, told authorities it was he who approved the sentence modification that set Willoughby free.
Wyser agreed to plead guilty to a single bribery charge—for a $2,500 donation toward his run for Hamilton County prosecutor—and cooperate with the government in exchange for leniency. He's facing up to two years in prison and is scheduled for sentencing Nov. 25.
In a Nov. 1 filing, the government described how Wyser accepted the bribe and approved the release of Willoughby, who wound up serving less than 20 years on a 70-year prison sentence.
The early release in July 2009 was the result of a lobbying campaign by local attorney Jennifer Lukemeyer, who has not been charged in the case. She exchanged several emails with Wyser with the subject line "Free Paula!" according to a sentencing memorandum.
In emails, Wyser was hardly veiled about his interest in collecting campaign funds from Willoughby's father.
“What will Paula do to make me feel warm and fuzzy?" he wrote in one email.
“You should convince him to write me a check on behalf of the whales," Wyser wrote in another, referencing the movie Free Willy.
But it was a phone call on the morning of May 29, 2009, that likely sealed Wyser's fate. Based on testimony from Lukemeyer, Wyser called her that morning and said: “I want him [Willoughby’s Father] to give and you can tell him.”
Willoughby's father, Harrison Epperly, wrote the $2,500 check the same day. It was the largest direct contribution to Wyser's campaign during the 2009 reporting period.
Wyser cashed it on June 22, and he filed the sentence-modification agreement the next day. A few months later, Lukemeyer hosted a fundraiser for Wyser at her home, where she says Wyser sought another campaign contribution from Epperly.
Wyser has maintained that he did not solicit the donation but "corruptly accepted it as a reward."
Investigators discovered Wyser had deleted about 60 emails, including incriminating messages between he and Lukemeyer, from his Prosecutor's Office account.
Epperly and Lukemeyer also met on more than one occasion with Brizzi, who is referred to as "The Prosecutor" in Wyser's sentencing memorandum, but investigators failed to turn up any direct evidence implicating the two-term prosecutor.
Federal prosecutors led by U.S. Attorney Joe Hogsett feared the mostly circumstantial case against Brizzi would not hold up in front of a jury or on appeal. So they opted against charging him despite convictions of his business partner Page and former deputy Wyser.
Hogsett in October announced he would not pursue charges but described Brizzi's actions as "unacceptable." In a statement, Brizzi said "Hogsett's baseless aspersions … are a continuation of his disregard for the boundaries of his office."
Brizzi has maintained his innocence and says the lack of criminal charges supports his position that he conducted his business affairs "both ethically and legally."
Monday's sentencing hearing for Page in South Bend was another setback for prosecutors.
They had argued Page should serve a 14-month prison sentence for a wire fraud count. But the judge scoffed at the sentencing request, noting the crime resulted in no losses to either the lender or the state.
Page's attorney, Robert W. Hammerle, described the offense as an "isolated technical violation" that is actually quite common. The judge seemed to agree, noting that he hadn't seen "many or any" cases with "less aggravating circumstances."
Without a conviction to give Bales strong incentive to cooperate against Brizzi, prosecutors feared a similar ending to a trial of the former prosecutor.