Indy councillor indicted for fraud

INDIANAPOLIS (AP) - An Indianapolis city-county councillor and two associates used a charity to dupe a local physician out of $1.7 million dollars, according to a federal indictment announced Wednesday by the U.S. attorney’s office.

Paul Bateman Jr.’s term as a city county councillor for the 11th district ends in little more than a week. He did not seek re-election. Instead, he'll be facing charges that could put him behind bars for decades.

An indictment handed down by a federal grand jury paints a picture of a lavish spending spree in 2007 by three men, Bateman, Michael Russell and Manuel Gonzalez, who ran a so-called charitable organization in Indianapolis known as the Russell Foundation. According to U.S. Attorney Joseph Hogsett, the three men took the money and spent it quickly.

"Cars and clothing for themselves and their families and friends, tent payments and even personal tax liabilities," Hogsett said.

The indictment spells out how the men allegedly bilked the physician out of $1.7 million dollars, promising first that they would turn a $600,000 dollar investment in an ethanol company that would fund the Russell Foundation into $18.5 million. Then, they promised an additional $1million investment in the Russell Foundation would yield a $600,000 return in seven months.

The physician was told there were a dozen investors. Instead, Joe Vaughn, assistant U.S. attorney and the lead prosecutor in the case, alleges, Bateman, Russell and Gonzalez spent almost all of the money.

"The million dollars was spent in 33 days," Vaughn said.

Through his attorney, Bateman sent a statement to 24-Hour News 8, saying he had yet to see the indictment. In part the statement read: "Mr. Bateman has not violated any federal or state laws and he looks forward to his day in court to defend against the allegations in the indictment."

Bateman faces eight counts of wire fraud and 10 counts of money laundering. Each count of wire fraud carries a maximum sentence of 20 years in prison, and each count of money laundering carries a maximum of 10 years.

The indictment says a high ranking IMPD officer was involved with the foundation and added credibility to efforts to get the money from the physician. But the officer was not indicted and therefore not named.

The Russell Foundation went bankrupt in 2008.