Ex-Indianapolis City-County Councilor Paul Bateman sentenced to 2 years in prison in fraud scheme

Ex-charity leader gets 4 years

INDIANAPOLIS - A former Indianapolis City-County councilman has been sentenced to more than two years in prison for conspiring to defraud an investor out of $1.7 million.

Paul Bateman, 58, was sentenced Monday to 27 months in prison after pleading guilty to wire fraud.

Authorities began investigating the now-defunct 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 Michael Russell, along with partners Bateman and Manuel Gonzalez, over accusations they conspired to defraud a local investor.

Russell was sentenced to four years and nine months in prison after pleading guilty to eight counts of wire fraud and 12 counts of money laundering.

He admitted 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.

"That is brazen. That is criminal. They have admitted their guilt. Now they will be spending several years in prison thinking about the bad decisions they made," said U.S. Attorney Joe Hogsett.

In court, Bateman said, "I never meant to bring shame on my family or my church. I apologize to this court. I will do everything to make restitution. My heart is pure."

Russell and Bateman were both ordered to pay $1.7 million in restitution to the victim in the scheme.    

"He is one of our good citizens who has a very good heart, who thought he was doing something to help others," Yvonne Watkins-Ferguson, attorney for the victim, told RTV6. "He ends up in a very precarious situation at this age."

Gonzalez went to trial in February and was acquitted of wire fraud and money laundering.

Follow Derrik Thomas on Twitter: @derrikthomas

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