Another Botched Public Corruption Case: Paul Bateman Co-Defendant Acquitted of Defrauding Physician Out of $1.7 Million

The U.S. Attorney's Office for the Southern District of Indiana didn't want to be outdone by the U.S. Attorney's Office in the Northern District Indiana, where last week John Bales and his business partner, William Spencer, were found not guilty of defrauding the state while serving as the state's exclusive real estate leasing agent after federal prosecutors failed to call a key witness, co-conspirator Paul Page, who had already pleaded guilty to wire fraud charges. This week Manuel Gonzales was found not guilty of defrauding an Indianapolis physician out of $1.7 million in a federal courtroom in Indianapolis despite the fact that his two co-defendants, former Indianapolis City-County Councilor Paul Bateman and Michael Russell had pleaded guilty to taking money from Dr. Arthur Sumrall to invest in their nonprofit foundation and instead went on a shopping spree buying vehicles, clothing and other luxury items for themselves. The IBJ's Cory Schouten covers this latest botched public corruption case:

. . . During the trial, Theodore J. Minch, a public defender representing Gonzalez, argued his client was only following orders from Russell and Bateman when he orchestrated bank withdrawals and cut checks on behalf of The Russell Foundation, the not-for-profit the ethanol business was supposed to support.

The organization spent large sums of money on cars for its employees, on office furnishings including big-screen televisions from Best Buy, and on "pre-operational bonuses" in the $10,000 to $20,000 range for its principals, Bateman testified during the trial. But there was no indication the foundation spent a dime on its stated mission of alleviating poverty.

In testimony that turned emotional at times, Bateman said he gradually came to realize what he had done was wrong and accepted a plea deal to make peace. In exchange for cooperation, the government agreed to recommend a prison sentence of 30 to 37 months for Bateman, who otherwise would have faced up to six years.

Bateman, Russell and Gonzalez still are facing a civil suit in Marion County brought by Dr. Sumrall, who is seeking unspecified damages.

Apparently, Gonzalez' lame Sgt. Schultz defense that he didn't know why they were buying all those luxury items for themselves with checks he personally processed using Dr. Sumrall's money was more convincing to the jury than the case federal prosecutors presented to them of his guilt.