10052012 - News Article - U.S. attorney salutes IRS for latest round of charges

U.S. attorney salutes IRS for latest round of charges

Post-Tribune (IN)
October 5, 2012

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As news of more public corruption in Lake County broke Thursday, local officials expressed concern and the need to continue fighting back against illegal actions by politicians. 

U.S. Attorney David Capp said during a news conference Thursday that the indictments came from his office’s “very active” task force investigating public corruption. Although Capp couldn’t explain why public officials in Lake County continue to violate the law despite the dozens of past convictions, he said his office will continue to pursue these cases. 

He gave credit to the FBI , the IRS and the Indiana State Police for helping investigate the cases, saying most of the indictments came from the hard work of the IRS. 

Rich Weber, chief of the IRS Criminal Investigation unit, said public corruption is a large focus for the IRS and public officials who do not file or file false tax returns “will simply not be tolerated.” 

Weber said the IRS does not focus on Northwest Indiana specifically but will investigate tax fraud anywhere. 

“Unexplained wealth has always been the Achilles’ heel of those who criminally violate their positions of trust,” Weber said. “ ... They are faced with a huge dilemma — enjoying the fruits of their crime without being detected by the IRS. Their efforts seem futile.” 

Gary Mayor Karen Freeman-Wilson said she was stunned at the indictment against Common Council member Marilyn Krusas. “I’m sorry to hear about it. I wish Marilyn the best. One of the things I’ve learned as an attorney is you’re innocent until proven guilty.” 

Gary Common Council President Kyle Allen Sr. said the news took him off-guard but that Krusas is innocent until proven guilty. 

“It’s unfortunate, and I hate to see it happen,” Allen said. “I was surprised.” 

Merrillville Town Council President Shawn Pettit said the town will aggressively seek restitution from former Town Court clerk Virlissa Crenshaw like it did with former bookkeeper Rosemary Barath, who also stole money from the town. 

“We want to recoup as much as we can as quickly as we can,” said Pettit. “If there’s a reverse mortgage, PERF (Public Employee Retirement Fund), whatever, we’ll go after it. (Clerk-Treasurer) Gene (Guernsey) won’t let that money go.” 

The bulk of the money Barath took was reimbursed through a reverse mortgage on her house. The town also received her pension. 

Pettit said Crenshaw’s actions were unfortunate for the town and its employees. 

Pettit said he did not know if the town could seek repayment of the full $310,325 Crenshaw is believed to have stolen, or just the $176,763 named in the plea agreement signed by Crenshaw. 

He applauded Town Court Judge Gina Jones for working diligently with the Indiana State Police on the matter and called Crenshaw’s actions unfortunate. 

“You would have thought employees would’ve learned from Rosemary. It’s a shame one or two bad apples ruin it for everyone else,” Pettit said, adding most town employees are hard-working and honest. 

Jones, who initiated the investigation when she noticed discrepancies, would not comment on the indictment on Thursday. 

Hammond Mayor Tom McDermott Jr. said the indictment of City Councilman Alfonso Salinas was not surprising considering federal investigators interviewed city employees, including the mayor. 

“It’s not a big shock,” McDermott said. “It’s sad since I know Al on a personal level; he’s a nice man with a nice family. But if it’s true, he let the city down.” 

McDermott said the city had done business with Munster businessman David Johnson for years but that relationship is “completely severed now.” 

McDermott said East Chicago City Council member Juda Parks pleaded guilty to a misdemeanor, so he would not lose his elected office. 

“It wouldn’t be my right to encourage him to leave,” said McDermott, who is the chairman of the Lake County Democratic Party. “From what I understand, failure to file (income taxes) is obviously not good, but it’s comparatively minor.” 

Correspondents Michelle L. Quinn and Karen Caffarini contributed to this story. 

10052012 - News Article - Feds deliver public corruption indictments

Feds deliver public corruption indictments

Post-Tribune (IN)
October 5, 2012 

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HAMMOND — Federal indictments rained down Thursday on three Lake County elected officials, a former Merrillville Town Court clerk, the former director of the East Chicago Public Library and a Munster businessman. 

U.S. Attorney David Capp announced the grand jury charges that followed investigations conducted by the Northern District of Indiana’s Public Corruption Task Force. Assistant U.S. Attorneys Gary Bell and Philip Benson will prosecute the cases. The Public Corruption Task Force is a multi-agency effort whose primary participants are the FBI, the Indiana State Police and the Internal Revenue Service. 

Public corruption indictments announced are: 

Gary Common Councilwoman Marilyn Krusas , 69 — charged with one count of tax evasion. The indictment claims Krusas , who has served as a councilwoman since 2000, hasn’t filed a federal income tax return since 1991. In 2001, the IRS started sending her notices of taxes and penalties owed that eventually added up to $157,413. However, according to the indictment, when she received in 2009 and 2010 inheritance payments totalling $232,680, she used the money to pay down other debt and to write $110,000 in cashier’s checks to herself and a relative instead of pay her debt to the federal government. 

Krusas surrendered herself Thursday afternoon to the U.S. Marshals Service and pleaded not guilty to the charge before U.S. Judge Andrew Rodovich. She was released on a $20,000 bond and had to turn over her passport. 

Assistant U.S. Attorney Gary Bell said during her initial appearance that the goverment’s case would take about three to four days to present at trial. Rodovich set a status hearing for Dec. 9. 

Her attorney, Scott King, said he has known about the case for several months and that none of it has anything to do with her position as a city councilwoman. 

“Her conduct as a public official has been above reproach,” he said. 

King said that Krusas planned to stay on the City Council for now but they would discuss her future. 

Not only does Krusas faces up to five years in prison on the felony count if convicted, but she would also immediately lose her office. 

Virlissa Crenshaw, 42, of East Chicago — charged with theft from a local government entity and with filing a false tax return for the 2009 tax year. 

The offenses relate to Crenshaw’s theft of cash bonds while working as a clerk for the Merrillville Town Court in 2008. Crenshaw was the only one responsible for the bonds during after hours. The Indiana State Board of Accounts discovered in an audit that the records books did not match the actual money collected. 

Crenshaw is also being sued by the state for the missing money, and that lawsuit claims she would sometimes use bond money from one defendant to cover the missing bond from another defendant to cover her tracks. 

Crenshaw, who is married to a nephew of Lake County Prosecutor Bernard Carter, signed a plea agreement filed in conjunction with the indictment admitting her guilt to all charges. The loss to the town of Merrillville is $176,763 and the tax loss to the United States is $55,203. 

Crenshaw faces up to 10 years in prison for pleading guilty to the counts, although the government promises not to prosecute her husband with any criminal tax charges. The government will also recommend she serve the minimum of federal sentencing guidelines. 

Crenshaw’s change of plea hearing is scheduled for Tuesday morning. 

Manuel Montalvo, 38, of East Chicago — charged with two counts of filing false tax returns for the tax years 2009 and 2010. The indictment alleges that Montalvo, the former director of the East Chicago Public Library, overstated unreimbursed business expenses and medical/dental expenses by a total of $80,577. 

It was unclear as of Thursday evening if Montalvo, who was arrested Thursday morning, had made his initial appearance. He faces up to three years in prison if convicted. 

This is not Montalvo’s first brush with the law. Montalvo, who also once served as the Lake County Democratic Party secretary, was found guilty in 2010 of battery against two South Shore commuter railroad police officers, disorderly conduct and criminal tresspass. The conviction was in connection to a fight he got into with police while trying to get on a South Shore train. 

He was sentenced to a year of court supervision and 40 hours of community service. 

East Chicago City Councilman Juda Parks, 40 — charged with two counts of failure to file income tax returns for the tax years 2008 and 2009. Parks, who is also an East Chicago police officer, owes the IRS $10,123 in taxes for that time period. 

Parks signed a plea agreement filed in conjunction with the indictment admitting his guilt to all charges and agreeing to cooperate with the government. The plea agreement says the total tax loss is $15,160, which he agrees to pay to the IRS along with any penalties and interest. 

U.S. Attorney David Capp said Thursday that Parks has agreed to cooperate with the government’s “ongoing investigations.” 

Parks, who was supposed to turn himself in Thursday, faces up to one year in prison. Because the charge is a misdemeanor, he can still continue to serve on the East Chicago City Council. 

A change of plea hearing had not been scheduled as of Thursday evening. 

Hammond City Councilman Alfonso Salinas, 52 — charged with receipt of a bribe by an agent of a local government receiving federal funds. Salinas is the District 2 councilman for Hammond and has held that office since 1995. 

David Johnson, 56, of Munster, owner of Dave’s Tree Service — charged with payment of a bribe to an agent of a local government receiving federal funds. 

The indictment alleges that Johnson paid Salinas $10,500 in exchange for Salinas giving Johnson $310,000 worth of work trimming trees in Salinas’ district. The money for the trees came from casino tax revenue that each Hammond council membes gets to benefit his or her district. 

Salinas is also charged with four counts of willful failure to file tax returns for tax years 2006 through 2009. 

The federal government has also filed a forfeiture allegation against Salinas, demanding he pay back the $10,500 to the government. 

It was unclear if Salinas, who was arrested Thursday morning, or Johnson have had their initial appearance. 

Caption: Guy Rhodes Leslie Adkins 

Memo: Fact Box: Indicted Thursday in federal court 

Marilyn Krusas , Gary city councilwoman 

Juda Parks, East Chicago city councilman 

Alfonso Salinas, Hammond city councilman 

Manual Montalvo, former director of the East Chicago Public Library 

Virlissa Crenshaw, East Chicago, former Merrillville Town Court clerk 

David Johnson, Munster businessman 

Statement from the U.S. Attorney 

“Our public corruption task force is very active and we are certainly interested in hearing from any citizen who believes he or she may have some information to help us in that regard.” 

— U.S. Attorney David Capp 

Citizens may contact the FBI office with information at 769-3719. 

10042012 - News Article - Feds to announce details of public corruption investigation

Feds to announce details of public corruption investigation

Post-Tribune (IN)
October 4, 2012

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The U.S. Attorney’s office in Hammond will announce details Thursday morning of an “ongoing investigation of public corruption,” according to a release. 

The office will hold a news conference at 11 a.m. at the U.S. District Court in Hammond. 

The news release did not have any more details on what will be announced, and Mary Hatton, spokeswoman for the office, said she had no comment. 

The news conference will come a year after the U.S. Attorney’s office’s last announcement of public corruption cases. U.S. Attorney David Capp then announced indictments against three Lake County Sheriff’s Department officers and a separate indictment against former Lake County Coroner Thomas Philpot. 

The officers — Edward Kabella , Joseph Kumstar and Ronald Slusser — all pleaded guilty to buying guns illegally through the Sheriff’s Department and then selling parts online. Kabella is scheduled to be sentenced Oct. 17. Sentencings for the other two have not been set. 

A federal jury found Philpot guilty this summer of theft and wire fraud while he was Lake County clerk. His sentencing has not been scheduled. 

10042012 - News Article - NW Indiana council members face federal charges

NW Indiana council members face federal charges

Associated Press State Wire: Indiana (IN)
October 4, 2012 

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HAMMOND, Ind. (AP) — City council members from Gary, Hammond and East Chicago, a former Merrillville town court clerk, the former head of the East Chicago library and a Munster contractor have been indicted on federal charges. 

The U.S. attorney's office says Gary City Councilwoman Marilyn Krusas , Hammond Councilman Alfonso Salinas and East Chicago city councilman Juda Parks are all charged with failing to file tax returns. Salinas also is charged with receipt of a bribe by an agent of a local government receiving federal funds. 

Former East Chicago Public Library Director Manuel Montalvo is charged with filing false tax returns. Former Merrillville Town Court Clerk Virlissa Crenshaw of East Chicago is charged with theft from a local government entity and filing a false tax return. 

10042012 - News Article - Indiana city council members indicted on tax charges

Indiana city council members indicted on tax charges

Associated Press State Wire: Indiana (IN)
October 4, 2012 

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HAMMOND, Ind. (AP) — A sweeping indictment released Thursday accuses a Hammond city councilman of accepting kickbacks to steer city contracts toward a local business, a Gary councilwoman of failing to file tax returns for 20 years, and others of filing faulty tax returns. 

Hammond Councilman Alfonso Salinas, Gary Councilwoman Marilyn Krusas and East Chicago Councilman Juda Parks were all indicted on charges of failing to file tax returns. Salinas also is facing bribery charges. 

A former Merrillville town court clerk, the former head of the East Chicago library and a Munster contractor also were indicted following an investigation by the U.S. attorney into tax fraud. 

"Failure to file tax returns and the filing of false tax returns by public officials will not be tolerated. Those who disobey the tax laws will be held accountable," said Richard Weber, chief of the IRS' criminal investigation unit. 

Salinas, 52, a city council member in Hammond since 1995, is accused of steering $310,000 toward a Munster tree-cutting service in exchange for a $10,500 kickback. He is charged with receipt of a bribe by an agent of a local government receiving federal funds, while David Johnson, owner of Dave's Tree Service, was charged with payment of a bribe to an agent of a local government receiving federal funds. 

According to the indictment, Salinas accepted at least $10,500 from Johnson, 56, as payment for hiring his company to work in Hammond. Salinas also is charged with four counts of willful failure to file tax returns for tax years 2006 through 2009. 

Phone messages left for Salinas at his city council office and for Johnson at his company by The Associated Press weren't returned. 

The indictment alleges that Krusas , a Gary City Council member since 2000, has failed to file tax returns since 1991, and allegedly committed several acts of evasion in connection with an inheritance of $230,000. A message left at the 69-year-old's office seeking comment also wasn't immediately returned. 

Parks, 40, an East Chicago police officer and city councilman since 2008, was charged with two counts of failure to file income tax returns for the tax years 2008 and 2009. 

Parks signed a plea agreement that was filed in conjunction with the indictment admitting his guilt to all charges and agreeing to cooperate with the government. Parks declined comment on the charges. 

The former director of the East Chicago Public Library, Manuel Montalvo, is charged with filing false tax returns for the tax years 2009 and 2010. The indictment alleges he overstated unreimbursed business expenses and medical-dental expenses. 

A listed phone number couldn't be found for Montalvo on Thursday. 

Former Merrillville Town Court Clerk Virlissa Crenshaw of East Chicago is charged with theft from a local government entity and filing a false tax return. The indictment says the charge involves theft of cash bonds while working for the town court. 

Crenshaw signed a plea agreement that was filed with the indictment admitting her guilt to all charges. The loss to the town of Merrillville is $176,763, according to the court documents. 

A call to Crenshaw's home was met with a message saying the number could not be reached at this time.