UPDATE: Former state lawmaker accepted bribe from casino for favorable legislation, prosecutors say

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Former State Rep. Sean Eberhart agreed to plead guilty to a federal conspiracy fraud charge. (Photo from the Indiana House Republicans)

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.”

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17 thoughts on “UPDATE: Former state lawmaker accepted bribe from casino for favorable legislation, prosecutors say

  1. Where is the outrage from the Indiana GOP; from those who expressed gross dissatisfaction that Hogsett (Dem) was re-elected mayor in Indianapolis by a plurality of its residents. Will Shelbyville be boycotted as well?

    1. The difference is there is evidence and proof here…. So far there is literally nothing they can show to make Biden even look guilty…

  2. It’s so frustrating that the story can’t just be the story. Somehow, we have to tie it to an R or D stance which has nothing to do with the story at hand.

    The story should be: how many times does an elected official need to fall in order for others to be leary of any improprieties or to be very cautious about their potential conflicts. This is yet another sad state of affairs for a person I believed to be honest and straightforward. So disappointing and sad for his family and friends.

    1. Absolutely agree! This has nothing to do with what side of the aisle he sat on, rather than someone who committed a crime and happened to be a politician.

    2. Here’s what the penalty should be for a legislator: You lose your entire salary you earned during your time in all elected office. From school board up, pay it all back. Plus, the crime remains a felony that stays on your record for a long period of time.

      For the company? Divest the assets. Those involved are not allowed to work in that industry any longer. And fines? Best I can tell in this case, the company got an $80 million dollar benefit for their troubles. Maybe that should be the starting point for their fine.

      Make the crime not worth the time.

    3. Robert and Mary Ann, this indeed DOES have to do with what side of the aisle they sat on.

      All of the elected officials involved in the Spectacle conspiracies were Republicans in the supermajorities, doing favors for a former elected Republican who was a co-owner of Spectacle.

      In Indiana, because of the supermajority, this stuff can happen and go undetected for a while because the guilty look like “fine upstanding citizens” and the special deals look like regular lawmaking.

  3. “The U.S. attorney agreed to recommend a sentence no higher than the low end of advisory guidelines.” Which is what exactly? And a $60,000 fine? How about Spectacle be forced to pay the extra $80 million transfer fee they woudl have had to pay had they not bribed this guy?

  4. If you’ve followed this issue nation wide, you know that almost all legislators and former legislators who get into criminal trouble it involves the gambling industry. The objections when this wave of gambling legislation covered the country were correct. When John Gregg was Speaker, there were no, as in zero, gambling criminal cases in Indiana. He never met alone with anyone who wanted to talk about gambling matters, not lobbyists not anyone else. Integrity prevailed but it requires constant attention.