This past April, Lake County Sheriff John Buncich went into a Gary towing operator's vehicle and fetched a $3,500 cash bribe from the front seat, a payment federal court records claim was part of a larger scheme to steer towing business to companies based on cash payments and campaign contributions to the sheriff.
Within a week of the payment, which also included $2,500 from another towing operator, Buncich directed the sheriff's department to enforce Gary's ordinance violations, according to court records.
Later, after an officer assigned to enforcing ordinance violations in Gary was injured, two towing operators involved in the bribery scheme complained about a subsequent dip in the city's tow business, court records say. Buncich responded by assigning another Lake County patrol officer to enforce ordinance violations in Gary, according to a federal indictment announced Friday against the sheriff, his second-in-command and a towing operator.
"This is a sad day for the citizens of Northwest Indiana," U.S. Attorney David Capp said at a Friday press conference.
The indictments announced Friday unveiled startling public corruption allegations that included charges against Buncich and, in a separate case, Portage Mayor James Snyder. While the investigations in Lake and Porter counties were separate, both involved allegedly soliciting and accepting money from towing company operators.
In addition to Buncich and Snyder, Capp announced indictments against Timothy Downs, chief of the Lake County Sheriff's Department police; William Szarmach, of Chase Street Auto in Lake Station; and John Cortina, of Kustom Auto Body in Portage.
Buncich, Downs and Szarmach are named in the multicount indictment alleging the illegal towing scheme in which the sheriff accepted bribes in the form of thousands of dollars in cash and in donations to his campaign fund, Buncich's Boosters. All three are facing charges of wire fraud, while Buncich and Szarmach also are charged with bribery.
Buncich, Downs, Szarmach and Cortina were all arrested and taken into custody Friday morning, Capp said, adding that he's asked that Szarmach remain in federal detention.
Buncich and Downs each were each released on $20,000 unsecured bonds.
Snyder surrendered to federal authorities Friday afternoon, officials said. He was released on a $20,000 unsecured bond. If he attends all of his hearings, Snyder will owe no money. If he misses any, he will have to pay the $20,000 and faces arrest. Snyder also was ordered to turn over his passport and any firearms to federal authorities.
Buncich, a Democrat, was elected to his fourth term as sheriff in 2015. Snyder, a Republican, was elected to his second term as mayor in 2015.
"The citizens of the region are tired of this," Capp said.
Lake County allegations
The sheriff, whose department was in charge of deciding which companies were called for towing services, and the chief allegedly steered business toward towing operators in exchange for cash and checks, the U.S. attorney alleged in a 14-page indictment. Buncich allegedly took more than $25,000 in cash bribes and $7,000 in checks from Szarmach and another towing operator identified as Individual A, an unidentified towing operator who was working with investigators, according to the indictment.
Individual A voluntarily offered to provide information to federal authorities, Capp said, adding that the decision by Individual A to step forward was critical for the investigation.
While Buncich's office had the authority to determine what towing operators were awarded contracts, according to Lake County ordinance, the county commissioners ultimately approved the sheriff's recommendations.
According to the indictment, Buncich's office had a list of up to a dozen towing companies used to handle tows in different parts of Lake County. But from February 2014 to October 2016, according to the indictment, Buncich used his power and authority as sheriff to steer towing business to firms based on their cash payments and campaign contributions.
Certain towing companies on the towing list saw an increase or drop in business based on their cash payments and campaign contributions, the indictment alleges. Certain towing firms were allowed to remain on the towing list based on the level of campaign fundraising tickets they bought, the indictment said.
Szarmach and Individual A were awarded towing operations in Gary, the indictment said.
Buncich and Downs allegedly collected money from Szarmach and Individual A, the indictment said.
In July, the indictment said, Individual A handed Buncich $2,500 in cash, which he pocketed. That same person handed Buncich a $7,500 cash payment, which he put in his right rear pocket, the indictment said.
Between July and August, Buncich also accepted $3,500 in cash and checks from Szarmach, the indictment alleges.
Both Szarmach and Individual A got "a larger share of towing involving large semi-tractor trailers, ordinance towing in the City of Gary, towing in other Lake County municipalities and towing for other entities," the indictment said.
Portage mayor
Snyder and Cortina, named in a separate indictment, were charged with bribery. Capp said the mayor solicited money from Cortina and Individual A and gave them a towing contract for Portage.
According to the indictment, Cortina paid Snyder $12,000 in exchange for a towing contract between him, Individual A and the City of Portage.
Snyder also allegedly accepted $13,000 in connection with a Board of Works contract and obstructed tax laws by impeding the government's collection of tens of thousands of dollars in personal taxes he owed and payroll taxes owed by his mortgage business, First Financial Trust Mortgage LLC.
Snyder declined to comment after his hearing, but his lead attorney, Thomas Kirsch, of the law firm Winston and Strawn, said they were surprised by the indictment, "particularly so because these charges are meritless."
A woman who answered the phone Friday afternoon at Cortina's body shop, 5409 U.S. Highway 6, Portage, promptly hung up when asked for comment on the indictments. The business was the site of a raid by officials with the U.S. Department of Treasury on Nov. 10, the same day of a sweep of several Lake County offices.
According to online campaign finance reports, Cortina donated thousands of dollars to Snyder's campaigns.
Local reaction
Buncich's office on Friday released a statement that said services will go uninterrupted at the department.
"The Sheriff's Department is continuing to run as normal. There has been no disruption of any operations. The proud men and women of the Lake County Indiana Sheriff's Department continue to serve and protect our citizens," Buncich said.
Dan Murchek, deputy chief of police for the sheriff's department, declined to comment on the charges or the investigation. He said in his position as deputy chief he is responsible for the day-to-day operations of the sheriff's department and providing the services the public needs and that will not change.
Gary Mayor Karen Freeman-Wilson, a former Indiana attorney general, said she has always believed a person is innocent until proven guilty. But she called the indictments a sad day from a personal standpoint, from a professional standpoint and a political standpoint. She described both Buncich and Snyder as friends.
"It shows the U.S. Attorney is not targeting one group over another," Freeman-Wilson said of the cross-party charges.
Buncich also is Lake County's Democratic Party chairman. His Republican Party counterpart, Chairman Dan Dernulc, said he was "extremely disappointed, even upset."
Dernulc said he has had a good working relationship with Buncich despite not always agreeing.
"As elected officials and appointed officials, we really have to always be above. People look up to us. This is another black eye in Lake County," Dernulc said.
Lake County Commissioner Mike Repay said the charges undermine both the hard, honest work most police officers do, and the work by outside contractors who are playing by the rules.
"I'm disappointed. It's a mark on the county. It's a mark on county government. It's unfortunate and sad. I'm mad. I'm just kind of conflicted on the whole thing. There is a range of different emotions. It is not a great day in Lake County," Repay said.
"We have a great city, and we're going to continue to move forward," Portage City Council President Mark Oprisko said. "It's a sad day for me, and I'm beside myself. In 28 years on the council, I've never dealt with anything like this, but the mayor has a very good staff, and he does care about the citizens of Portage.
"(Snyder) needs to keep his head up and keep leading."
FBI agent Jay Abbott said that when the public trust is betrayed, it erodes the trust in public institutions that people rely on.
"When these types of cases occur, it's a tragedy," Abbott said. "It's a tragedy for law enforcement, and it's a tragedy for the community."
Capp said the investigations into corruption related to towing contracts in Northwest Indiana continue and more charges are anticipated.
"You know who you are, and we know, currently, who some of you are," Capp said. "And we are coming after you. And if any of you want to try to help yourself, time is running short."
Michael Gonzalez and Carrie Napoleon are freelance reporters for the Post-Tribune. The Associated Press contributed.
