Michael Russell, former leader of the Russell Foundation, gets prison time for defrauding investor
Michael Russell gets nearly 5 years
Last Updated: 210 days ago
INDIANAPOLIS - The leader of a defunct Indianapolis charitable foundation is headed to federal prison for conspiring to defraud an investor out of $1.7 million.
Michael Russell, 54, who pleaded guilty to eight counts of wire fraud and 12 counts of money laundering, was sentenced Monday to four years and nine months in prison.
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.
"In just a few short months, these defendants threw away millions of dollars that it had taken their victim a lifetime to collect," U.S. Attorney Joe Hogsett said. "This case represents the worst of greed and gluttony, and the U.S. Attorney's Office remains committed to combating the scourge of corruption and fraud wherever it is found."
Russell was also ordered to pay $1.7 million in restitution to the victim in the scheme.
Gonzalez went to trial in February and was acquitted of wire fraud and money laundering.
Bateman, who faced eight counts of wire fraud and 10 counts of money laundering, also pleaded guilty, and will be sentenced next week.
Copyright 2013 Scripps Media, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.