INDIANAPOLIS (WISH) - An Indianapolis minister admitted Thursday in federal court to duping a local doctor out of $1.7 million. Michael Russell plead guilty to 20 counts of wire fraud and money laundering.
Russell, 54, was indicted in 2011 along with former Indianapolis City-County Councillor Paul Bateman, 58, and Manuel Gonzalez, 53.
Prosecutors claimed Russell formed a charitable trust called "The Russell Foundation" in 2003 as a religious non-profit. The organization's mission was to provide community leadership and poverty relief, said U.S. Attorney Joe Hogsett.
In front of Judge Tonya Walton-Pratt Thursday, prosecutors say Russell admitted to soliciting $702,000 in investment money from an Indianapolis physician. The doctor was not named in court documents, but is in his 70's, prosecutors said.
Together, the three promised the doctor they would invest his money in an ethanol company known as Indiana Ethanol Capital Investments, Hogsett said. That company was organized in early 2007, with Bateman listed as President, Chief Administrative Officer and Chief Corporate Officer.
According to court documents, Russell then met with the victim again and persuaded him to invest an additional $1 million in a corporate bond to the Russell Foundation, which Russell allegedly said would be used as an investment in the company.
Instead, the three are alleged to have spent the money on at least 8 cars worth $228,000, at least $25,000 in clothing and jewelry and to pay off personal tax liabilities and debts.
"Mr. Russell [Thursday] in federal court admitted that his foundation had one and only one true purpose: to line the pockets of Mr. Russell and his friends," Hogsett said.
Russell also admitted to spending nearly $1 million of the money in just 33 days, Hogsett said.
Court documents also allege that the three used Bateman's position as a City-County Councillor along with an unnamed, but high ranking IMPD officer, to provide the appearance of credibility and legitimacy to the project.
That IMPD officer has not been charged in connection with the case.
Under the terms of the plea agreement, Russell will have to pay all the money back. In exchange, prosecutors will recommend a judge sentence him to the advisory sentence of 4 years and 9 months in prison.
No sentencing date has yet been set and Russell remains on home detention, a U.S. Attorney's office spokesman said.
"It's a sad day," Hogsett said. "It's a sad day when any individual in our community falls short of the standards the public expects and rightfully deserves. But, frankly, it would be even more tragic if these acts went unnoticed or unpunished."
Bateman still faces eight counts of wire fraud and ten counts of money laundering. Gonzalez, who was listed as the Russell Foundation's Chief Financial Advisor and Chief of Latino Affairs, is charged with three counts of wire fraud and two counts of money laundering.
Both are scheduled to go to trial on Feb. 11.
"This office is confident in our ability to prove the charges against those additional individuals beyond a reasonable doubt," Hogsett said.
Prosecutors would not comment Thursday on whether the victim or Russell had agreed to testify at trial, or about whether additional charges could still be filed in the case.
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