09022015 - News Article - Lake Station mayor's trial begins

Lake Station mayor's trial begins

NWI Times
September 02, 2015 - 12 AM

http://www.nwitimes.com/news/local/lake/lake-station-mayor-s-trial-begins/article_3111ad6f-2210-5cd9-9e30-2090f5c274dc.html

HAMMOND | Opening statements Tuesday in the public corruption trial of Lake Station Mayor Keith Soderquist and his wife, Deborah, painted two vastly different pictures of the couple.

Assistant U.S. Attorney Joshua Kolar described a couple who made numerous improper withdrawals from campaign accounts and the town's food pantry before going gambling at local casinos.

Defense attorney Scott King, however, described a caring couple whose withdrawals were merely reimbursements for legitimate expenditures they had made.

The trial is expected to continue at 8:30 a.m. Wednesday with witnesses that could include donors to Soderquist's campaign.

The Soderquists face charges of conspiracy to commit wire fraud, seven counts of wire fraud, and three counts of false filing. If convicted, they face up to 20 years in prison and up to $250,000 in fines on each wire fraud charge. The pair are expected to contend money taken from his campaign fund and Lake Station's food pantry were reimbursement for money owed to them.

The Soderquists are represented by King and attorney Lakeisha Murdaugh. Kolar and Assistant U.S. Attorney Philip Benson represent the government.

The government's indictment against the couple alleges that between spring 2010 and December 2012, the Soderquists were improperly taking funds from the campaign fund and food pantry fund at the same time they were losing $104,000 at region casinos.

In a three-year span, the couple are alleged to have taken $18,500 from the election campaign account before going gambling at the Four Winds Casino in New Buffalo, Mich. The indictment also contends the pair at one point in July 2011 had a check issued from Lake Station to the Food Pantry account. Later, $300 was withdrawn from the account and about two hours later the pair were allegedly gambling at Four Winds Casino.

The Lake Station Food Pantry received private donations as well as donations from the city and the Indiana State Department of Health.

Kolar said the Soderquists funded their gambling with money donated to their campaign and the food pantry. He said the couple withdrew donated money from an automatic teller machine within 24 hours of going gambling more than 50 times.

The Soderquists did not record these expenditures as required on campaign forms, said Kolar. He also said some of the donors are expected to testify as to how they thought the money given to the couple would be spent.

"They certainly weren't told the defendants were gambling with their money," Kolar said.

King, however, said the couple used much of their own money to help fund his campaigns for office in Lake Station. They initially did not seek reimbursement for some of these expenditures, King said, but they kept receipts and eventually paid themselves back for these legitimate expenses from the campaign fund.

King told the jury that because the money taken from the campaign fund was reimbursement for funds they had advanced, it was not money that needed to be listed as income on their tax forms.

Keith Soderquist has served as mayor since 2008 and prior to that served on the City Council. Soderquist ran for a third term as mayor this year but was defeated in the Democratic primary. His wife served as his administrative assistant and was also allegedly involved in the operation of the Food Pantry. She also served as treasurer of her husband's election campaign committee. 

Kolar, in his opening remarks to the jury, also outlined the couple's financial difficulties. Information contained in the indictment against the couple said they lost more than $160,000 gambling at casinos from 2007 to 2013. Kolar indicated Tuesday the couple's gambling expenditures were tracked by the casinos through their participation in a reward club.

The government contends the couple withdrew more than $45,000 from retirement accounts in 2009 and 2010 and $5,000 in 2011. After cashing out retirement savings, prosecutors say the couple's financial conditions grew worse and in 2010 and 2011 they discharged over $35,000 in credit card debt because they were insolvent.

King, however, indicated the Soderquists financial difficulties were tied to a flood that hit the area in 2008.

The need created by that devastating flood overwhelmed the food pantry and the Soderquists were involved in bolstering the fund with donations, according to King. He indicated Keith Soderquist's dedication to his mayoral duties at the time prevented him from concentrating as much as he should on his private job and resulted in his dismissal.

In the wake of this financial downturn, Soderquist sought to renegotiate his debt but found that in order to do so he first had to stop making payments on his credit cards.

The couple is also scheduled to stand trial in November along with the mayor's stepdaughter, Miranda Brakley, on separate charges. In that case, they are accused of knowing Brakley took at least $5,000 from the Lake Station City Court and helping to prevent her apprehension by police.