2 indicted Indy men have ties to former prosecutor

INDIANAPOLIS (AP) - Two men with reported business ties to former Marion County Prosecutor Carl Brizzi were among three people indicted Wednesday on fraud charges.

A federal grand jury in South Bend indicted real estate broker John M. Bales and developer and attorney Paul J. Page on charges that accuse them of conspiring to fraudulently buy a building in Elkhart in northern Indiana to lease office space to the Indiana Department of Child Services. The Indianapolis Business Journal reported  that both Bales and Page have ties to Brizzi, who has an ownership stake in the building.

Bales' partner and general counsel William E. Spencer also was indicted in the case.

A phone number for Bales was not listed. Page and Spencer did not immediately return phone calls to The Associated Press for comment.

Brizzi wasn't charged. He said in an email received by the AP that he had not seen the indictment and would not comment until he has "a better understanding of the allegations."

Bales, 44, and Page, 47, both of Indianapolis, and Spencer, 44, of Carmel were indicted on charges including conspiracy to defraud, bank fraud, mail fraud and wire fraud. Page also was charged with making false statements to a bank.

The 14-count indictment alleges that the state hired Bales' firm, Venture Real Estate Services, in 2006 to locate office space for leasing by state agencies. The contract prohibited Venture from any ownership interest in properties to be leased by the state.

The Department of Child Services allegedly wanted to lease space at a building on Mishawaka Street in Elkhart, and Page's company, L&BAB LLC, bought the building to lease to the agency. But federal prosecutors say Page paid no money up front to buy the building, instead using $361,000 from a company called BAB Equity of which Spencer was a member.

The indictment also alleges that Page borrowed $531,000 from an unnamed bank to buy the building but didn't inform the bank he already was getting money from BAB.

Venture received an $88,000 lease commission, the court documents said, and also received a more than $28,000 broker's fee and a $22,700 development fee even though the firm told the state it would only be compensated through lease commissions. Venture also did not pay a required $22,000 rebate to the state for more than a year, the indictment said.

Bales and Spencer also never informed the state of their deal with the bank, prosecutors said.

The Business Journal reported in 2009 that Brizzi had a share of building owner L&BAB valued between $50,000 and $100,000, according to federal campaign disclosure forms he filed that May. Page allegedly told state officials that he was the sole owner of the company, according to the indictment. The Business Journal also reported that Brizzi had business ties with Bales.

Mary Hatton, spokeswoman for the U.S. Attorney's Office for the Northern District of Indiana, said she could not comment on whether Brizzi might face any charges.