INDIANAPOLIS - The leader of a former Indianapolis charitable foundation will plead guilty to federal charges he conspired to defraud an investor out of $1.7 million.
U.S. Attorney Joe Hogsett announced Thursday that Michael Russell would plead guilty to eight counts of wire fraud and 12 counts of money laundering.
Authorities began investigating the Russell Foundation in 2008 after the organization, which listed its mission as trying to develop rail- and ethanol-related economic ventures that benefit minority workers and contractors, declared bankruptcy, citing alleged misappropriation of money.
In 2011, federal charges were filed against Russell, along with partners Paul Bateman, a former Indianapolis City-County councilor, and Manuel Gonzalez, over accusations they conspired to defraud a local investor.
With his guilty plea, Russell has acknowledged that he solicited $702,000 from an Indianapolis victim, telling that investor that he planned to fund the Russell Foundation by investing in Indiana Ethanol Capital Investments, a company founded in 2007 with Bateman listed as president, chief administrative officer and chief corporate officer.
Russell admitted that he and his alleged co-conspirators solicited another $1 million from the same investor, and that it was spent within 33 days.
According to court documents, the defendants spent the money on entertainment, clothes, jewelry, travel, vehicles, rent and more.
Bateman faces eight counts of wire fraud and 10 counts of money laundering. Gonzalez has been charged with three counts of wire fraud and two counts of money laundering.
Bateman and Gonzales will stand trial in early February, authorities said.
Russell will serve a minimum of 57 months in prison.