Tuesday, October 21, 2014

RIP Sheriff Jack Cottey

Former Marion Co. Sheriff Jack Cottey (R) passed away today at the age of 75. He reportedly had been suffering from cancer for some time. We feel for family members, of course, for the loss of their loved one and express our deepest sympathy to them for their loss.

Below is the reaction to Cottey's death by a number of state and local political luminaries. I don't share their views of the man. The profuse praise of Cottey by these prominent people is disturbing to say the least. The man I most remember is the man in the video above (NSFW), and it's the memory scores of people who got on his bad side for trying to do the right thing most remember. "I've got three more weeks, I'm going to bury some people's asses," Cottey bellows to the poor guy in the towing company office on the receiving end of his profanity-laced tirade because his unmarked car had been towed after he parked it illegally while getting tanked in the Columbia Club.

It's quite alarming that people who hold or have held such powerful positions in our state and local community would describe a man who had so little respect for the law despite being a life-time law enforcement officer in the glowing terms they do. Their effusive praise of this man says more about them than it does Cottey, who was simply a product of one of the most corrupt eras of law enforcement in Indianapolis' history. I'm truly sorry for his family's loss, but his departure is no loss to the local law enforcement community to which he brought so much shame and disrespect. He was no role model for younger law enforcement officers, and I can only hope that most of them view him as I did for the public's sake.

"Marine, state legislator, sheriff -- Karen and I knew Jack as a leader and a friend. We have deep respect for his many contributions to both public service and public safety."

--Mike Pence, Indiana Governor and former U.S. Representative

"Sheriff Cottey will be remembered as a national leader in local crime prevention and community policing. During very critical times, he was among the first to recognize that homeland security begins with hometown security. As a former United States Attorney, he was by my side after 9/11 proudly leading the men and women who serve and protect our local communities, as they worked with state and federal law enforcement to keep us safe from terrorism."

--Susan Brooks, U.S. Member of Congress, former Indianapolis Deputy Mayor for Public Safety and former U.S. Attorney

"Sheriff Jack Cottey displayed a unique blend of leadership traits -- compassion, vision, tenacity, common sense and fairness. He knew Indianapolis and her people well. His absence will be felt deeply by all those knew and worked with him."

--Richard G. Lugar, former U.S. Senator and former Indianapolis Mayor

"Our work together spanned many decades in his constant commitment to public safety and public service. As prosecutor, I worked closely with Jack as deputy chief and legislator to improve Indiana's criminal law. As mayor, I saw how the city benefited from his initiatives as sheriff, in innovated technology and techniques with the help of rank-and-file deputies. Jack was truly a public citizen who served his community and friends loyally and with commitment."

--Stephen Goldsmith, former Indianapolis Mayor and former Marion County Prosecutor

"When I was elected mayor, I appointed Jack as Deputy Chief of Detectives. He served faithfully in that capacity, and we subsequently supported each other in many political contests. I loved his laugh and his enjoyment of life. He was a genuine and caring person, and a good friend and ally. We will miss him."

--William H. Hudnut III, former Indianapolis Mayor

"I am deeply saddened in saying goodbye to one of our community's long-time civic and political leaders. Whether in the state legislature or during his two terms as Marion County Sheriff, Jack Cottey was known for always extending his hand across the political aisle in order to get things done for the people he was elected to serve-a quality that is too often absent in today's political climate. Jack was my friend and colleague. I, along with the rest of Indianapolis, will miss him."

--Joe Hogsett, former Indiana Secretary of State and former U.S. Attorney

"Jack Cottey and I served as deputies together as deputies in the Marion County Sheriff's Department in the early 1960s. He was a longtime friend and a great law enforcement officer. Jack was always able to work across party lines and put public safety first. I was fortunate to follow him as sheriff. He will be truly missed by so many in the law enforcement family."

--Frank Anderson, former Marion County Sheriff and former U.S. Marshal

"What I'll remember most about Jack Cottey is his great laugh. There are people whose laugh 'lights up a room,' as they say. Jack's laugh lit up the room and shook the pictures off the walls. Jack was a great politician, because he really loved politics. And he loved it because he loved people. Not 'the People,' as an abstraction, but individual people. All of them. And politics was for Jack the best chance he had to give each and every person exactly what they wanted and needed from their state and local government."

--Scott Newman, former Marion County Prosecutor

Former Deputy Prosecutor Gets Six-Month Suspension For Felony Drunk Driving Conviction

A spokesman and deputy prosecutor for former Marion Co. Prosecutor Carl Brizzi received a six-month suspension by the Indiana Supreme Court from the practice of law for his recent felony drunk driving conviction in Hamilton County. Mario Massillamany pleaded guilty on April 9, 2014 to operating a vehicle while intoxicated, his third such conviction, which was elevated to a felony due to a prior OWI conviction within the past five years.

According to the Supreme Court's Order, Massillamany promptly self-reported his arrest last July. In 2010, Massillamany received a public reprimand from the Supreme Court after he pleaded guilty to operating a vehicle while intoxicated and endangering another person's life, a Class A misdemeanor. Massillamany had a prior conviction for OWI dating back to 2000. The Court's Order also says that Massillamany had neglected to report a prior illegal consumption arrest in 1996 on his initial application to practice law in Indiana or in his renewed application. Massillamany will be reinstated following his six-month suspension as long as he complies with the terms of his probation.

The order found that Massillamany violated the following rules of professional conduct:
8.1(a): Knowingly making a false statement of material fact to the Board of Law Examiners in connection with a bar admission application.
8.1(b): Failure to disclose relevant facts to the Board of Law Examiners.
8.4(b): Committing a criminal act that reflects adversely on Respondent's trustworthiness or fitness as a lawyer.
Hat tip to Indiana Law Blog.

Obama Ebola Czar: Population Control In Africa And Asia Top Concern

This older interview of Indianapolis native Ron Klain, the consummate Washington insider and political hack who President Barack Obama has just appointed as his Ebola czar despite having no medical credentials, should send chills up the spines of West Africans where the deadly virus has reached epidemic proportions. Population control in places like Africa and Asia is what he sees as a top concern with which America should concern itself.

Monday, October 20, 2014

State Board Of Accounts Staff Slashed 30% In Past Ten Years Due To Budget Cuts

It's a wonder any fraud gets detected in state and local government in Indiana. The State Board of Accounts made public its case today for more funding to beef up its staff. According to Call 6's Kara Kenney, the agency's staff has been slashed 30% in the past ten years.
Due to budget constraints, the State Board of Accounts has seen its staff shrink from 315 in 2004 to 208 in 2014, according to State Examiner Paul Joyce.
Joyce went before the Legislative Council Audit and Financial Reporting Subcommittee Monday morning to make his case.
Joyce did not ask for a specific dollar amount or staffing level, but he made the case for a different schedule of audits and fee structure.
“It goes back to accountability on what happens with taxpayers’ money,” said Joyce. “It costs more to do things than it did before. It’s a systemic issue we’ve had.”
SBOA has been forced to suspend auditing financial records of some entities such as libraries and some public school accounts . . .  
Joyce is hoping for a change in state law that will give SBOA more flexibility with the staff they have.
“I'm in support of the State Board of Accounts receiving the funding it needs to continue to provide audits particularly to small government units,” said Greg Wright, Certified Fraud Examiner and former school board member in MSD Washington Township.
Joyce said if SBOA can’t get the resources it needs, you might see fewer headlines about public corruption, but not because it’s not happening.
“I think it will go unchecked, which therefore, it will go unpunished,” said Joyce . . .

State Let Library Embezzler Off The Hook For More Than $400,000 Theft, Now Earns More Than $54,000 As IUPUI Employee

Juanita L. Mimms

Yesterday, local certified fraud examiner, Greg Wright, retold the sad chapter of the Indianapolis Public Library when Juanita Lynn Hoagland, a former accountant for the municipal corporation, skimmed more than $455,000 in late book return fees over a period of many years, a discovery made by the Indiana State Board of Accounts, which recently announced it would no longer audit libraries and some other local governmental entities because it lacked the resources it needed to audit them. In a follow-up to his research, Wright informs Advance Indiana of an even more grim discovery. It turns out that the state Attorney General's Office in 2005 agreed to release Hoagland from all but $22,200.00 of a judgment it obtained against her in the Marion Circuit Court on January 15, 1991 after Hoagland filed for bankruptcy.

On January 23, 2004, Attorney General Steve Carter's office obtained a final garnishment order in the amount of $455,991 against Hoagland, whose name had changed to Juanita Mimms after she remarried on November 18, 1999. Mimms filed for Chapter 7 bankruptcy on June 3, 2004. The Attorney General's office intervened in her federal bankruptcy case to contest Mimms' attempt to discharge the debt she owed for the embezzled funds. The Attorney General's Office entered into a settlement agreement with Mimms on January 7, 2005 in which it agreed to reduce the debt she owed to $22,200. Mimms agreed to repay the $22,200 through monthly payments of $300, allowing her to repay the debt without interest over a period of a little more than six years. Andrew Swain with the Attorney General's Office confirmed to Wright that her judgment had been fully satisfied in 2011.

According to a database of state employees made available online courtesy of the Indianapolis Star, Mimms is currently employed by IUPUI in Equal Employment Opportunity Construction Support earning over $54,000 a year. According to Mimms' Linked in account, she has been working for IUPUI for over the past 16 years. She was released from prison in April, 1989 after serving only a fraction of her three-year prison sentence according to Wright's research. In an e-mal to Wright, Swain wrote, "I'm sorry to say that the $455,991 judgment was satisfied before my time overseeing SBOA cases." Swain continued, "I would have rather given the person relief for the full amount, given her a 1099-C, and handed it to the IRS to chase her for the taxable income as a result of the cancellation of debt."

UPDATE: The more I think about this case the more I'm reminded of that old Seinfeld episode about Mr. Bookman, the library cop. Here's the clip to refresh your memory. Apparently there was no Mr. Bookman working at the Indianapolis Public Library all of those years that Juanita had her hands in the till.

Mahern Trades Council Seat For County Job

It's the sort of political shenanigans that cause so many of us to lose trust in our public officials. Take the case of Indianapolis City-County Councilor Brian Mahern (D). He staked out a position as an independent-thinking member of his caucus, which drew the ire of his fellow Democrats. He was stripped of his leadership position and committee assignments. He then did the unthinkable. He crossed party lines and attempted an unsuccessful coup of his own Democratic leader, Council President Maggie Lewis, a move that was thwarted because independent-thinking Councilor Christine Scales (R) refused to go along with the coup. That led to her ouster from the Republican caucus. Republicans didn't even resort to that action against Councilor Lincoln Plowman after he was indicted for taking a bribe from an undercover FBI agent.

People who've been watching the council lately noticed that Mahern appeared to lay down the hatchet and begin cozying up to members of his party again. He had an extra incentive to do that since he lost his state job last year and now faced a formidable primary election challenge from at-large Democratic Councilor Zach Adamson, whose seat was eliminated by action of the state legislature, in his newly-drawn council district. Now we learn that Mahern resigned his seat on the council effective yesterday to accept a new job working for the Marion Co. Assessor starting today, which also just happens to employ one of his fellow Democratic councilors, Mary Moriarty-Adams, as well as the husband of Council President Lewis. According to the IBJ, Adamson plans to seek appointment to Mahern's seat and resign his at-large seat. Democratic precinct committeepersons will then meet to appointment someone to fill out the remainder of Adamson's at-large council seat. You see why some of us no longer have faith in our elected officials?

Ball State Writes Off $12.6 Million Lost Through Fraud, State Lawmakers Say Nothing To See Here

A single employee of Ball State University unilaterally made a decision to invest over $13 million with individuals who later defrauded the university out of the money. Nobody at the university charged with supervising this lone employee was disciplined. State lawmakers are padding university officials on the back for a job well done. From the Indianapolis Star:
A report released Friday by a former federal prosecutor who investigated the Ball State University investment scandal does not include what everybody wants to know: How did a lone employee, Gale Prizevoits, the former director of cash and investments, invest $13.165 million with two criminals without the knowledge of anyone else at the university?
“There was not a detailed, play-by-play report about what transpired and how these investment frauds were accomplished,” Indiana­polis attorney Rick Hall, chairman of the Ball State board of trustees, told The Star Press Friday, after he and President Paul Ferguson appeared before the State Budget Committee.
“That information was reviewed by (CPA firm) Crowe Horwath and (former U.S. Attorney) Deborah Daniels,” he said, “and we will provide information in that regard to prosecutors, and they will make a decision as to who should be prosecuted.”
Hall told the State Budget Committee, meeting in Richmond, that the university doesn’t expect to recover any more than half a million dollars of the investments made with two perpetrators of securities fraud, one from Bronx, N.Y., and one from Boynton Beach, Fla. Both pleaded guilty to federal charges . . . 
Hall told lawmakers: “We had a single individual, our director of cash and investments, who intentionally decided to circumvent our internal controls. She knowingly entered into investment contracts outside the scope of the investment policy, and subsequently proceeded to try to cover up those efforts.”
He added, “We had internal controls in place that should have prevented this fraud. Individuals with responsibility of following those internal controls failed us. Those individuals are no longer with the university, so the personnel has changed. This loss of money was not the result of a flawed system. This was a result of flawed individuals.”
In an interview, Hall declined to name any responsible parties other than Prizevoits, saying, “I don’t want to dive into the gory details and re-live that. It’s important to move forward with best management practices in place.”
Prizevoits was fired, but no other BSU employees in the controller’s office or business affairs were disciplined . . .
Here's the reaction of state lawmakers:
“Thank you, folks, for realizing the problem and stamping it out immediately,” Rep. Terry Goodin, D-Austin, told the two BSU officials. “And I think you guys are doing a great job.”
Rep. Tim Brown, R-Crawfordsville, said Ball State’s transparency “re-establishes and elevates your trust in this state.”
“I appreciate your response today,” said Sen. Luke Kenley, R-Noblesville, who chairs the committee.
I guess nobody cares how a person who wasn't even remotely qualified for the job she was hired to do wound up in that job in the first place. Isn't the fired employee living in Florida with one of her former supervisors?

Sunday, October 19, 2014

Indianapolis Library Board Crafts $59 Million Indebtedness For Construction Projects To Evade Referendum Requirement

The Indianapolis Public Library Board in August approved incurring a total of $59 million in debt over the next six years for a series of improvements to existing library branches, as well as the construction of new library branches. A resolution (Proposal No. 302) has been introduced in the Indianapolis City-County Council by Councilors Monroe Gray (D), Vop Osili (D), Robert Lutz (R), John Barth (D) and Steve Talley (D). The proposal would give the board approval to issue a series of bonds over the next several years, including the following:
  • Brightwood Branch Improvement Project-$5.945 million
  • Eagle Branch Improvement Project-$7.66 million
  • Perry Township Branch Improvement Project-$9.415 million
  • Michigan Road Branch Improvement Project-$7.565 million
  • Fort Benjamin Harrison Improvement Project-$10.215 million
  • Multi-branch Facility Improvement Project-$8.2 million
What is particularly troubling about the tact being utilized by the library board is that it seems intentionally designed to break up all of these construction projects into multiple projects with separate bond issuances for the sole purpose of evading the protection property taxpayers have in state law, which requires public improvement projects above a certain dollar threshold ($12 million) that are financed through property tax levies to be approved by voters at a referendum. Each of the bond issuances are crafted to walk up to but not cross that threshold.

The construction projects themselves are very ambitious. The largest project is a new Glendale branch on 6 acres where it seems a lot of money was already invested on the existing branch to accommodate a particular politically-connected real estate developer. The others as described by the IBJ, include:
  • A new branch library is being built in the Brightwood neighborhood on 4 acres of land to replace the current branch.
  • The Eagle branch is replaced with a new branch on 5 acres.  
  • Michigan Road gets a new branch that sits on 5 acres.
  • Perry Township gets a new branch that sits on 6 acres.
  • The new branch at Fort Benjamin Harrison sits on 5 acres.
If you're keeping count, that's over 60 acres of land for new libraries. I haven't assessed the need for these projects, but if the City-County Council is following state law, it will tell the library board it gets one bite at the apple on this major undertaken, which must go before voters at a referendum to let them decide if they want to pay higher property taxes to build more library branches.

An Old Library Embezzlement Case Just Won't Fade Away

This guest post by Greg Wright, owner of Greg Wright & Associates, LLC, a certified fraud examiner, shines light on an old embezzlement case uncovered by the State Board of Accounts which involved a former employee of the Indianapolis Public Library. Greg's post is quite timely given the state agency's announcement that it will stop auditing many units of local government like library districts due to lack of state funding.

At a time when budget constraints at Indiana’s State Board of Accounts have forced it to consider discontinuing the audit of libraries, an old Marion County Public Library embezzlement case has resurfaced. My research into Juanita Lynn Hoagland started out to be just another example of a long-running embezzlement case in my upcoming talk on fraudster gender differences to be given next month in Cincinnati. The convicted fraudster, perhaps a current Indiana government employee, was tracked down as part of my research to ask her side of the story .

During the years 1978 to 1988, this library embezzlement was described as one of the largest uncovered by the SBOA. According to the audit report, the State Examiner at that time described the embezzler’s methods as “quite a masterpiece” and “very artfully done. He described the library employee as "very calculating" in the "approach to both taking the money and concealing the theft."

The Indianapolis Public Library collected monies for overdue book fines (5 cents a day), lost books, etc., from its 27 branches. These cash receipts were then forwarded to the central office where a two-part receipt was prepared by an employee. The original of the receipt was returned to the branch and a carbon copy was retained. The cash – minus the skimmed amount --was delivered to the bank and a deposit slip was used to validate the deposit amount.

Juanita Lynn Hoagland, according to a SBOA report, used a stylus to ". . . record a lower amount on the carbon, while leaving the original blank. This lower amount was used in preparing the bank deposit and the subsequent posting." "The original copy … was then removed from the receipt book and written for the proper amount. This original copy was sent to the respective branch …” According to the records, Juanita pocketed the cash difference between the original receipt and her retained copy. In addition to Juanita’s $18,900 salary, she was able to skim an additional $1,000 a week in nickels and dollar bills.

A civil judgment naming Juanita Lynn Hoagland was filed on Jan. 1, 1991 by the State of Indiana in the amount of $455,991.

It is believed that this embezzlement started at least fifteen years before the 1988 audit; but, the older records were incomplete or had been destroyed. I wanted to ask Juanita Lynn who taught her and when she first started to skim; but, she would not answer my questions. In fact, this Juanita Lynn denied being the fraudster.
Greg Wright: Have you ever used the name ‘Juanita Lynn Hoagland’?
Juanita: No
Greg Wright: Have you ever worked at the Indianapolis Public Library?
Juanita: No
Greg Wright: Is your date of birth July 18, 1953?
Juanita: No.
Juanita Lynn Hoagland was released from jail in April 1989 and appears to have changed her last name when she married on November 18, 1989. The Juanita interviewed above was using the same last name as was used on the November 18, 1989 marriage certificate. I sent this Juanita an e-mail at her government job requesting that she confirm the verbal answers she gave to my questions. She has not replied.

A copy of my file has been sent to Staci Schneider, the Indiana Attorney General’s Chief of Staff. If you include Juanita Lynn’s State of Indiana Pension Plan, she appears to have sufficient assets to repay the $455,991 judgment. Maybe the AG can claw the money back.

Greg Wright, CFE, has researched red flag and number invention differences between male and female embezzlers. He has found that female embezzlers take 50% longer to identify, and the overwhelming majority of long-term embezzlements have been committed by females.

Ballard Expected To Make Announcement On Future

Sources tell Advance Indiana that Mayor Greg Ballard is expected to announce shortly that he won't be seeking a third term as Indianapolis mayor next year as this blog has been telling you for months. The announcement could come as soon as this week. Stay tuned.