A former state representative from Shelbyville has agreed to plead guilty to a federal criminal charge related to a scheme in which he supported legislation beneficial to a casino company in exchange for a lucrative job, according to the U.S. Attorney’s Office.
Sean Eberhart, a Republican who served House on the Committee on Public Policy, which reviewed legislation concerning casinos and gaming in Indiana, used his position as a lawmaker “to enrich himself by soliciting and accepting gifts, payments, and other things of value” from Spectacle Entertainment in exchange for “favorable official action, namely future employment at and compensation from Spectacle,” according to the charging documents.
Spectacle was a company created following the sale of Centaur Holdings LLC. Spectacle utilized the same office space that was previously used by Centaur, and many Centaur executives continued in substantially similar roles as executives of Spectacle, prosecutors said.
In late 2018 and early 2019, Spectacle sought to purchase the state licenses for two casinos that were located on the waterfront of Lake Michigan and to relocate those casinos to other areas beneficial to Spectacle. The purchases and relocations had to be approved through state legislation.
Federal prosecutors said Eberhart accepted the job offer, which included annual compensation of at least $350,000, from a Spectacle owner identified in court documents only as “Individual A.”
In exchange, Eberhart used his position to advocate and vote for passage of a state gambling bill “on terms favorable to Spectacle,” including reducing or eliminating the originally proposed $100 million transfer fee that Spectacle would have had to pay for acquiring licenses, court documents say. That fee was ultimately reduced to $20 million.
A plea agreement filed late Thursday in U.S District Court in Indianapolis shows Eberhart has agreed to plead guilty to a charge of conspiracy to commit honest services fraud.
Under the agreement, Eberhart would pay restitution of $60,000, roughly the amount of his annual legislative salary. The charge of conspiracy to commit honest services fraud also carries a prison sentence of up to five years. The U.S. attorney agreed to recommend a sentence no higher than the low end of advisory guidelines.
Court documents say the charge is based on evidence gathered from text messages to and from Eberhart, call records involving Eberhart, digital images of documents sent to and/or received from Eberhart and others, covert recordings of conversations with Eberhart, and audio and video recordings and other records of statements and actions in the Indiana Legislature.
The charging documents also revealed text messages exchanged between Eberhart and a person not identified in court documents.
When the gaming bill was in jeopardy in April 2019, Eberhart received a text from the person that said “[Individual A] is losing his mind,” referring to one of the owners of Spectacle Entertainment.
“Tell him stay calm. We are going to let the bull simmer tonight,” Eberhart responded, later correcting himself to say “bill.”
The unidentified person texted back: “What is her issue though? Where did this come from?”
Eberhart responded: “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. Just told [Individual A] to hold tight.”
Patrick Cotter, the attorney representing Eberhart, declined to comment on the case.
Eberhart is the third former state lawmaker to find themselves in court over their dealings with Spectacle or its predecessor, Centaur.
In September 2020, former state Sen. Brent Waltz and Centaur casino executive John Keeler, himself a former state representative, were named in a federal investigation involving a scheme that funneled corporate contributions from a casino to political candidates. The investigation involved former executives of Centaur Gaming, a company that previously owned and managed the state’s horse-track casinos in Anderson and Shelbyville.
The case prompted the Indiana Gaming Commission to force Keeler and another top Spectacle executive, Rod Ratcliff, to give up their ownership stakes in casino projects in Gary and Terre Haute.
Waltz later pleaded guilty to two felonies and was sentenced to 10 months in prison. Keeler, the former general counsel and co-owner of Indianapolis-based Centaur Gaming, was sentenced to two months in prison and fined $55,000.
Ratcliff has not been charged with a crime.
Republican legislative leaders expressed disappointment in Eberhart’s alleged conduct disclosed in court documents on Friday.
“As elected officials, it is imperative we conduct ourselves with the utmost integrity as we serve the people of our state,” Senate Pro Tem Rod Bray, R-Martinsville, said in a statement to IBJ, adding that he was “disappointed and shocked” to learn of the investigation.
“I’m beyond disappointed and extremely frustrated to learn of this news involving a former state representative,” said House Speaker Todd Huston, R-Fishers. “Any such conduct runs counter to our core values and everything our assembly stands for and strives to protect–a trusted, credible and transparent institution that’s responsible only to Hoosiers. I’ll continue working every day to ensure we serve and protect the public interest, and that this legislative body conducts itself with the highest level of integrity and civility.”