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State alleges fraud in Warsaw

Suit seeks $334,000 from ex-city official, contractor

INDIANAPOLIS – Indiana Attorney General Greg Zoeller filed a lawsuit Thursday in Kosciusko County against a former Warsaw city official and a pipe contractor, seeking repayment of $334,000 in public funds allegedly defrauded from the city.

The defendants are Lacy Francis Jr., former Warsaw street superintendent; Pro Form Pipe Lining Co. of Mishawaka; and Marc Campbell, owner and president of Pro Form.

“Defrauding the taxpayers through overpayment for an infrastructure project for personal gain undermines the public trust.

“My office will use all the legal tools at our disposal to claw back funds from the defendants involved in this brazen scheme and will work with the county prosecutor to obtain restitution for the city,” Zoeller said.

According to the July 15 certified audit report of the State Board of Accounts, between January 2011 and December 2013, the defendants participated in a scheme to defraud Warsaw by intentionally overbilling the city for the costs of storm sewer projects to install linings in the pipes and clean and repair them.

The audit found that Francis used his position at the time as street superintendent to manipulate the public bidding process so that Campbell’s company would win the bid for the projects, which were conducted in 11 sections.

Francis, 59, of Warsaw, has been charged with corrupt business influence; aiding, inducing or causing theft; two counts of theft; providing false information to a governmental entity to obtain contract; two counts of official misconduct; and conflict of interest.

Kevin R. Brown, 45, of Mishawaka – identified by police as a ProForm field supervisor – faces charges of corrupt business influence; aiding, inducing or caus­ing theft; and four counts of providing false information to a governmental entity to obtain contract.

Campbell, 53, of Mishawaka, has been charged with corrupt business influence; theft; and four counts of providing false information to a governmental entity to obtain contract.

According to Zoeller, when the projects were conducted, Campbell allegedly billed the city for significantly more work than his company actually performed: A total of 1,813 more lineal feet of pipe lining was billed to the city than was actually installed, unnecessarily costing the city $267,569 over three years.

The audit found that Francis, the street superintendent, signed off on the fraudulent invoices from Pro Form.

Moreover, Campbell allegedly paid $51,000 back to Francis for steering the work to his company, the audit alleged.

If a civil judgment is entered, then the state can use the same methods any creditor can use against a debtor to collect on a debt, including executing on assets, garnisheeing wages or bank accounts and placing liens on property.

Zoeller’s office also asked Kosciusko Circuit Court for a temporary restraining order pro­hibiting the defendants from selling, moving, con­ceal­ing or transferring any fi­nancial assets they own, including vehicles, real estate, bank accounts or pension and retirement accounts.

Judge Michael W. Reed granted the temporary restraining order and scheduled a hearing Wednesday on a mo­tion for a preliminary injunction that would freeze the defendants’ assets until the lawsuit is concluded.