Grand jury tags trustee, recorder
Lake County building official also named in U.S. indictment
Post-Tribune (IN)
December 3, 2004
County officials are scrambling to figure out the extent of illegal contractor licenses after federal prosecutors on Thursday indicted County Recorder Morris Carter and assistant building commissioner Jan Allison on extortion charges.
North Township Trustee Greg Cvitkovich was also indicted Thursday on tax evasion charges, stemming from alleged illegal deductions on his 1999 and 2000 federal income taxes.
Cvitkovich, 48, of Highland, is one of several partners in a corporation with a contract to run East Chicago's recycling program. IRS agents found evidence of excessive tax deductions totalling $369,332 for Cvitkovich's private consulting company, called The C Corp.
It is the alleged illegal contractor licenses uncovered by federal agents that has county officials most concerned.
According to U.S. Attorney Joseph Van Bokkelen, Carter accepted $500 from an informant in July to change the results of a building contractor licensing test. Court documents say Carter paid Allison $100 to change the results so the person could obtain a license to work in the unincorporated areas of Lake County.
"The informant would not have passed the examination if it were not for Jan Allison changing the results," said Assistant U.S. Attorney Tom Kirsch.
The U.S. Attorney's Office would not comment on who paid Carter, but sources inside Lake County government familiar with the case said the county recorder was caught up in a federal sting operation. Carter, who is scheduled to leave office at the end of the year, allegedly had accepted money from undercover agents to perform various acts.
Carter, 50, of Gary, is charged with extortion for allegedly accepting $400 to purge a lien recorded in the Recorder's Office on Feb. 20, 2003.
He is also charged with accepting $1,000 to provide a list of properties up for tax sale, though such lists are readily available from the county for a nominal copying fee.
County officials were most alarmed by an apparent hole federal agents uncovered in the county's contractor licensing process.
Allison, 66, of Gary, is charged with Carter in one count of extortion under the federal Hobbs Act.
He has been with Lake County government for more than 25 years. He has been in charge of administering and grading the contractor licensing tests for at least 15 years, said Building Administrator Ben Nuzzo, Allison's supervisor.
Lake County has issued 1,368 licenses to general contractors and various subcontractors working in the county. Once the contractors pass the test, they pay an annual renewal fee, Nuzzo said.
Over the years the county has set up safeguards to guard against potential cheating on the tests, including changing the questions periodically. He remembered a contractor filing a Freedom of Information Act request to review the test questions. There also have been allegations of contractors using tape recorders during the test.
Nuzzo conceded that no checks and balances were in place to prevent his office staff from changing the results of the tests. While he and other staff members have occasionally administered and helped grade the monthly examinations, Allison usually performed both of those duties, by himself, Nuzzo said.
"There really aren't any safeguards, at least on changing the results," he said.
At least five contractors are on the list for renewal at the Dec. 17 meeting of the Lake County Professional Licensing Board, he said.
Caught off guard by the federal sting operation, County Commissioners attorney John Dull said the county Plan Commission will review the procedure before determining whether hundreds of contractors will be required to retake their exams.
"I'm sure the licensing board will look at all of those renewals very closely," Dull said.
County officials expect to spend today talking to Allison, licensing board members and federal agents. They want to get a handle on whether contractors who failed the test received their licenses anyway and may be working in unincorporated Lake County, Dull said.
Under a county ordinance, to work in unincorporated areas, contractors have to answer questions on their trade and the state Uniform Building Code.
The county licenses only contractors in unincorporated areas. Cities and towns have their own licensing requirements and often administer their own tests, Nuzzo said.
In the second federal indictment released Thursday, Cvitkovich is charged with tax evasion.
He was not indicted in connection with his duties as North Township trustee. Instead, the U.S. attorney indicted him on income tax charges relating to a consulting firm. Cvitkovich is a partner in a firm that runs East Chicago's recycling program, at the site of the former city incinerator, according to sources close to the case.
According to documents on file with the Indiana Secretary of State's office, Cvitkovich was one of the principles in The C Corporation, along with James Fife III, former special assistant to outgoing Mayor Robert Pastrick.
Fife was indicted in August on similar income tax charges, stemming from four unnamed companies to which he had ties. At the time, federal prosecutors said the companies had won contracts with East Chicago.
Fife was also an unnamed co-conspirator in the 1999 concrete-for-votes scandal. Fife's name came up frequently in the recent trial of three Sidewalk Six defendants -- City Controller Edwardo Maldonado and city councilmen Joe De La Cruz and Frank Kollintzas -- as one of the people at city hall responsible for the coverup of how millions of taxpayer dollars were spent without bids.
Court records show that federal agents looked at Cvitkovich's questionable deductions from two periods -- May 7, 1997, to April 30, 1998, when deductions totaled $203,467 and again from May 1, 1998, to April 30 1999, with deductions of $165,865.
Sources close to he case say the two are part of a private group who have run the city's multi-million-dollar recycling program since at least 1997.
Cvitkovich did not return a phone call left with his secretary at the North Township office.
Carter did not return a message left with his secretary at the Recorder's Office.
Allison would not comment on his indictment.
Reporter Steve Walsh can be reached at 648-3120 or swalsh@post-trib.com.
The charges
Morris Carter
Lake County recorder
Charged with three counts of Hobbs Act violations for alleg-ed extortion. He allegedly accepted money to purge a lien, provide a public document and have the grade changed on a failed contract-or licensing exam.
Jan Allison
Lake County assistant building administrator
Charged with one count of a Hobbs Act violation for alleged extortion. He allegedly changed the answers on the failed licensing exam and accepting money in return.
Greg Cvitkovich
North Township trustee
Charged with two counts of tax fraud for filing false corp-orate federal income tax returns. He alleg-edly reported inflat-ed deductions for his private consult-ing firm.
What's next
Carter is set to ap-pear before a federal judge today, while co-defendant Allison is scheduled for arraignment on Dec. 16. Cvitkovich is set to appear Dec. 10.
If convicted, Carter and Allison could face up to 20 years in prison for each charge against them, while Cvitkovich could face up to three years on each tax count.
Caption: Morris Carter, Lake County recorder, leaves his Crown Point office without comment about his indictment on Thursday. A federal grand jury indicted Carter on charges of extortion.(PHOTO - Color) (DAVE BARTMAN/POST-TRIBUNE) Greg Cvitkovich(PHOTO - Color)
