Monday, October 26, 2020

Muncie Sanitary District official admits conspiracy to solicit bribes

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The administrator of the Muncie Sanitary District from 2014 until her arrest last July has struck a deal with federal prosecutors, admitting to conspiring to solicit bribes in exchange for rigging bids on MSD projects.

The proposed deal calls for Debra “Nikki” Grigsby to plead guilty to conspiracy to commit wire fraud.

U.S. Attorney Josh Minkler’s office would then dismiss 16 other counts pending against Grigsby.

The plea deal — apparently signed by Grigsby in late February, and by attorneys in the case more recently — includes a “factual basis for a guilty plea” that details her alleged involvement in criminal activities tied to Sanitary District projects.

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TIMELINE: The FBI’s investigation of corruption in Muncie

Also named in that account, and said to have participated in the criminal conspiracy, are several of Grigsby’s co-defendants, including former Democratic Party chairman Phil Nichols, Muncie police officer Jess Neal, fellow MSD official Tracy Barton and local contractors Tony Franklin and Rodney Barber.

According to that document:

• “Beginning in or about 2015,” Grigsby, Nichols, Neal, Franklin, Barton and others participated in a scheme to award bids for MSD projects “in exchange for cash bribes and kickbacks, benefits or property.”

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• After Neal approached Grigsby about awarding MSD contracts to Franklin’s firm, she enlisted Barton, who arranged to receive two bogus bids for higher amounts than those submitted by Franklin.

• After Franklin began work on those projects, Nichols ordered Grigsby and Barton “to discontinue awarding contracts” to Franklin’s firm.

• Later, Neal gave Grigsby an envelope “that appeared to contain cash.” She was told to give the envelope to Nichols, and to tell the former party chairman that it was from Franklin.

“Grigsby delivered the cash bribe from Franklin through Neal to Nichols at Nichols’ office in (the local Democratic Party headquarters).”

• Grigsby told Nichols “the cash bribe was from Franklin”, and that Nichols could use the money “for a candidate known to the grand jury, or for whatever purpose Nichols saw fit.”

• Another witness reported Franklin then continued to receive demolition contracts from the MSD because he had “paid his dues.”

• Grigsby also used “money, benefits or property she received from Franklin, through Neal, for her own personal expenditures.”

The document also described contracts being awarded to Barber’s company in a similar fashion. It alleges the conspirators “falsified documents” in a bid to hide their crimes from federal investigators.

Grigsby also acknowledges she willfully made false statements while being questioned by FBI agents.

The crime Grigsby is set to plead guilty to carries up to 20 years in prison and a $250,000 fine.

However, prosecutors will recommend a sentence “at the low end of the applicable sentencing guidelines range,” and will not recommend a fine be imposed.

However, Grigsby “agrees to pay restitution for all loses caused by the defendant’s conduct.”

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She will also waive her right to appeal her conviction and sentence.

Grigsby and Franklin were indicted on bid-rigging allegations in July 2019.

While she was then placed on unpaid leave, a U.S. District Court official later gave her permission to discuss the MSD’s “day-to-day issues” with Bill Smith, president of the sanitary district’s board of directors.

On March 11, Grigsby and Franklin were essentially indicted a second time, on the same allegations, but this time in documents that also named Nichols and Neal as co-defendants.

Grigsby’s trial, which had been set for June 8, has been removed from the court’s calendar. A hearing at which she would plead guilty and be sentenced will be “set by separate order,” U.S. District Court James Sweeney II ruled.

Barton, the MSD’s superintendent of sewer maintenance, was indicted in September 2018 on charges of conspiracy to commit wire fraud, falsification of documents in a federal investigation and witness tampering.

His trial had been set for April 13, but it was recently rescheduled for Aug. 31.

Charges stemming from the years-long federal investigation of corruption in and near then-Mayor Dennis Tyler’s administration and the Sanitary District are also still pending against Barber, Franklin, Neal, Nichols, Tyler and local businessman Jeffrey Burke.

Grigsby would become the second defendant in the “Operation Public Trust” investigation to enter a guilty plea.

Last year, Craig Nichols — Phil Nichols’ son, and Tyler’s former building commissioner — pleaded guilty to wire fraud and money laundering, and was sentenced to two years in federal prison.

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