12292018 - News Article - Northwest Indiana pay-to-play towing investigation keeps federal courts busy in 2018

Northwest Indiana pay-to-play towing investigation keeps federal courts busy in 2018
Chicago Tribune
December 29, 2018
https://www.chicagotribune.com/suburbs/post-tribune/news/ct-ptb-federal-corruption-cases-2018-st-1227-story.html

High-profile investigations into alleged pay-to-play towing in Northwest Indiana continued to keep federal judges busy in 2018.

Former Lake County Sheriff John Buncich in January 2018 received a more than 15-year sentence for using his office to solicit bribes from tow operators. His two co-defendants, former Chief Timothy Downs and William Szarmach, of C.S.A. Towing, who cooperated with federal investigators, each received two years of probation.

Downs, Szarmach and Buncich were named in a multicount indictment in November 2016 alleging a towing scheme where the sheriff accepted bribes in the form of thousands of dollars in cash and donations to his campaign fund, Buncich Boosters, according to court records.

Szarmach was later charged with filing a false tax return, and agreed to pay upward of $89,000 in restitution as a part of his sentence.

The former sheriff, who is being held in a federal prison in Springfield, Mo., received positive news on his appeal Dec. 21.

In his appeal filed with the 7th U.S. Circuit Court of Appeals in Chicago, Buncich argued successfully that there was insufficient evidence to support any of his wire fraud convictions, court records state.

“The United States concedes that it failed to introduce sufficient evidence of ‘Federal reserve payroll fund’ transfers as alleged in counts 1 through 3 of the indictment,” Assistant U.S. Attorney David Hollar wrote in the response.

“Those counts should be vacated, and the case should be remanded for resentencing on the remaining counts,” Hollar said.

The government argued, however, that there was “sufficient evidence” to convict Buncich of his two remaining wire fraud counts, the response states.

Buncich was indicted the same day as Portage Mayor James Snyder, but that case is expected to go to trial in January.

Much of 2018 was spent litigating how federal investigators handled and screened email communications between Snyder and his attorneys. Snyder argued the faulty process exposed the federal trial team to attorney client privileged information, and should warrant the recusal of those assistant U.S. attorneys or the dismissal of some of the charges.

Federal prosecutors said Snyder has not presented any evidence that shows his email communications were used in any improper way during the investigation, according to court documents, and that a judge should not disqualify the prosecutors on the case or dismiss any charges against the Portage mayor.

Judge Joseph Van Bokkelen declined to remove the trial team or dismiss any of the charges.

“The court finds that, as carried out in this case, the filter process worked sufficiently, even if the process itself has inherent flaws (it has a semblance of the fox guarding the hen house),” Van Bokkelen said, in his order.

Snyder’s attorneys have asked Van Bokkelen to reconsider the order.

A former Merrillville town councilman, who federal investigators said during testimony in Buncich’s case was an early target of the towing investigation, was sentenced to 15 months in prison in June.

Tom Goralcyzk admitted he helped a tow operator secure a contract with Merrillville and accepted two used vehicles and other items to make that arrangement.

The charges said that Goralczyk “did knowingly and corruptly solicit demand, accept and agree to accept” a 2000 Jeep Grand Cherokee; a 2008 Ford Focus; four new camper tires; and free storage for a motorcycle from “Individual A” in return for a towing contract from Merrillville, according to court documents.

Goralczyk presented false bills of sale to the Indiana Bureau of Motor Vehicles for the Jeep Grand Cherokee, which he obtained for $400 though the value was in excess of $2,500, and for the Ford Focus, which he accepted for free though it was valued in excess of $5,000, according to court documents.

Lake County’s former deputy chief of police was pulled into Buncich’s case in April, when he was charged for lying to the FBI when he was interviewed by federal investigators about towing operations.

Dan Murchek, 58, of Schererville, was sentenced in September to two years of probation by federal Judge James Moody. Murchek was indicted in April for allegedly making false statements to the FBI, according to court documents, and reportedly lied to investigators during an interview about towing operations under convicted former Buncich when the former deputy chief was asked about campaign contributions he received from a tow operator.

During the fall of 2016, Murchek had announced he planned to run for sheriff during the 2018 election, as Buncich had served two consecutive terms and was prohibited by term limits from running again.

On Sept. 23, 2016, Murchek met with “Person A,” who was recording the meeting in cooperation with the FBI, and discussed how to structure a campaign donation to avoid Indiana’s limitation on business contributions, according to court documents.

The indictment said “Person A” allegedly gave Murchek a $1,000 donation from his business, which was a towing firm that did work for the Sheriff’s Department, and a personal check for $500 from one of the business’ employees. “Person A” had given an employee $500, according to the U.S. Attorney’s Office, and the employee then wrote a check to Murchek’s campaign.

During a November 2016 interview with the FBI, agents asked Murchek about contributions from “Person A,” according to the indictment, but he denied structuring the donation to skirt Indiana campaign donation limits.

Moody, during Murchek’s September sentencing, decried the former deputy’s chief’s conduct.

“You’ll be remembered as a crook,” Moody said.

“Yes, sir,” Murchek said, during sentencing.

The Porter County assessor in October was indicted on a tax charge related to his personal business, according to court documents, but is expected to cooperate against the Portage mayor, his brother.

Jon Snyder, 42, has pleaded guilty to failing to supply information to the IRS, a misdemeanor charge.

Snyder, as owner of Shoreline Appraisals Inc., allegedly failed to give the IRS an “Informational Return 1099 Form, which is a requirement for non-employees who received more than $600 in payments during a calendar year, according to court documents.

Snyder and Shoreline Appraisals allegedly failed to file the document for “Person A,” who was paid more than $5,000 in 2013, according to court documents.

The long-running case against employees at the Calumet Township Trustee’s office wound down in 2018.

Former Trustee Mary Elgin, 74, was sentenced in May to a year and a day in prison after she pleaded guilty to two counts of wire fraud, one count of conspiracy to commit wire fraud and one count of failure to file a tax return. She is being held at a federal prison in Pekin, Ill. She has a June 28 release date, according to Bureau of Prisons website.

Elgin used township employees and offices to run political campaigns and raise money for political fundraisers. “The higher the employee's salary, the more tickets employees were given and expected to purchase” for the fundraisers, court records state.

Steven Hunter, Elgin’s son who was head of the township's information systems technology department, was sentenced to a year of supervised release after also taking a plea deal.

Ethel Shelton, Elgin’s secretary, and Alex Wheeler, supervisor of the township's Job Search Works, chose to go to trial in April. The jury acquitted Wheeler, but convicted Shelton of conspiracy to commit wire fraud and conspiracy to commit honest services wire fraud.

Shelton’s motion for a mistrial is pending and is scheduled for a hearing in February.