09092007 - News Article - Fraud trial to start for Gary insiders - Three, including county official, face charges of fraud, conspiracy, tax evasion

Fraud trial to start for Gary insiders
Three, including county official, face charges of fraud, conspiracy, tax evasion 

Post-Tribune (IN)
September 9, 2007

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It might not have made it as a grocery store, but the building at 6300 Miller Ave. in Gary has bagged some big-name political players. 

Alleged fraud tied to the sale of the defunct Ralph's grocery building in 2001 and jiggering of the delinquent taxes on the building have landed Lake County Councilman Will Smith and political insiders Roosevelt Powell and Willie Harris in federal court, where the trio head to trial Monday on charges of mail and wire fraud, conspiracy, and tax evasion. 

The trial is the latest in the Operation Restore Public Integrity probe of Lake County political corruption, and the indictments against Powell, Smith and Harris come after lengthy investigations into the scandal-plagued Gary Urban Enterprise Association, which bought the grocery, and of Powell's property tax collection agency, U.S. Research. 

The charges 

Prosecutors allege the three facilitated the sale of the grocery building to GUEA for $200,000, with Powell, Harris and Smith pocketing $150,000 of the sale price. In 2000, Smith was approached by Ralph's owners about donating the building to a not-for-profit group. Smith allegedly asked Gary Historical & Cultural Society President Dolly Millender to "borrow" her group's not-for-profit status, and the land was deeded to the group. 

A year later, Harris allegedly approached GUEA Director Jojuana Meeks about purchasing the building for $400,000, with the pair eventually negotiating a sale price of $200,000, with Harris signing the necessary contracts and title documents. 

But the property had a delinquent tax bill of $60,000, which apparently prompted Harris to contact Powell, who held the contract for property tax collections work for the county, to set up a settlement for only $15,000. Perhaps more galling to any county resident who has gone through the months-long process of challenging their tax bill, Harris and Powell processed the tax appeal and paid off the reduced amount in a single afternoon. 

The Historical Society received $50,000 from the sale with Smith taking $75,000, $25,000 going to Powell and $50,000 to Harris. Prosecutors claim the trio defrauded GUEA, Lake County and the Historical Society in the deal. 

Powell and Harris also would sell a building on Broadway to GUEA that was held in the name of Harris' close friend Dorothy Ard, a deal that netted the pair $51,000 that prosecutors allege never showed up on their tax filings. 

The defendants 

Roosevelt Powell was a fixture at the Lake County Government Center when his close friend, Rudy Clay, served as a county commissioner. 

Powell soon became a familiar face at Gary City Hall when Clay replaced Mayor Scott L. King. 

With Clay's backing, Powell's U.S. Research won the no-bid contract to collect delinquent taxes for the county, one of the most lucrative professional services plums in local government. U.S. Research lost the contract when Powell was indicted, but he still earned nearly $700,000 for his services in 2006. 

Clay has remained a staunch supporter of his longtime friend. Always reserved, if not silent, around the press, Powell has made no comment publicly about the charges against him. 

Will Smith had struggled financially in the years leading up to the alleged GUEA deal, filing bankruptcy when faced with nearly $70,000 in debt in 1997. 

The retired Gary firefighter soon fell behind, despite help from his bankruptcy attorney, Willie Harris, who paid $4,500 to the bankruptcy trustee to keep Smith current on his payment plan. When he allegedly became involved in the GUEA deal, Smith was $36,000 in default. 

Smith, known for his malapropism-laden speeches and genial manner while serving on the council, has kept his seat but resigned his post as council president after his indictment. 

A former attorney for the Gary Housing Authority and other government entities, Willie Harris is known for his close ties to Lake County officials, including Prosecutor Bernard Carter. 

A smooth talker and consummate back-room operator, Harris and Powell are both allied with East Chicago politicians. 

This case also will be a rematch of sorts for Assistant U.S. Attorney Gary Bell and defense attorney Kevin Milner. 

Bell returns in the role of lead prosecutor, the job he held in the trial of East Chicago's Sidewalk Six, a conspiracy in which city officials illegally doled out more than $20 million in concrete sidewalks, driveways and other city services to win votes for candidates backed by then- mayor Robert Pastrick.

Milner, who represented East Chicago controller Ed Maldonado in the Sidewalk case, reprises his role as Bell's opposite number. 

Milner, who is representing Powell, may not have kept Maldonado or his co-conspirators from lengthy jail sentences, but the Sidewalk defendants were found guilty of only one -- the most serious -- of the 13 counts with which they were charged.