Ex-Rep. Eberhart gets year+ prison; $85K+ in fines/restitution
Former Rep. Sean Eberhart (R) of Shelbyville, once the top Republican on the House Committee on Public Policy, where he helped shape gaming laws, is sentenced to one year and one day in federal prison; fined $25,000; ordered to repay $60,000 to the State to approximate his annual legislative stipend; and must serve one year on supervised release for his role in advocating changes in the 2019 gaming omnibus legislation that cost the state at least $80 million in lost transfer fees and millions more in foregone tax revenue. United States v. Eberhart, No. 1:23-cr-00170-MPB-TAB.
Eberhart had admitted last fall that he worked on behalf of Spectacle Entertainment, LLC and its principal in exchange for a promise of a casino job with annual pay of at least $350,000 “and an equity stake.”
Judge Matthew Brookman of the U.S. District Court for the Southern District of Indiana reminded a contrite Eberhart at sentencing that he was well-blessed with an undergraduate education from Purdue University and an MBA from Indiana University that allowed him to earn plenty of money and accumulate significant assets. “But you wanted more,” the judge declared. “I have to believe that it was simply a matter of greed.”
Left unsaid in the proceedings – and by both the government and defense counsel who later declined to comment – was the extent to which Eberhart had cooperated with the government in the investigation into the gaming industry and legislation . . . and the status of the larger probe (recall that he had pleaded guilty to Conspiracy to Commit Honest Services Fraud, and we can’t recall ever seeing a conspiracy of one).
But back to the sentence – details of which were broken by Hannah News Service (just as we broke the news of the government sentencing request, the guilty plea, and the original filing of charges against Eberhart last fall). And if you want more detail, be sure to check out coverage in this week’s issue of our Hannah News sister newsletter, INDIANA GAMING INSIGHT.
The Government’s Sentencing Request
The sentencing memorandum filed by the Office of the U.S. Attorney for the Southern District of Indiana with the court was unusually sparse, lacking details about or an explication of Eberhart’s crime, with the government seemingly more concerned about detailing the impact of the sentence upon the public trust and attendant public apathy.
The sentencing memo explains that “empirical data shows that instances of corruption erode the sense of civic duty and leads to less voting and participation in elections,” and “voters may respond to corruption not by punishing the offending public official, but by withdrawing from the political process all together.”
The OUSA trial attorney making these arguments, Senior Litigation Counsel Brad Shepard, elaborated for the judge during Wednesday’s hearing the importance of “the breach of the public trust” as a “bedrock” principle of republican government, citing Jefferson and Adams. Public service was supposed to be “superior to all private passion,” Shepard told the court.
Shepard acknowledged that the 2019 omnibus gaming legislation at the heart of the prosecution might well have passed without Eberhart’s vote, “but not like this,” with an $80 million reduction in the transfer fee and other multi-million tax benefits for Spectacle at the expense of taxpayers thanks to behind-the-scenes help from Eberhart.
Those tax breaks are “so generous that the revenue set to be generated following their expiration on July 1, 2025, will be used to develop a Lake County convention center, a new Metro Center transit hub in downtown Gary, and to pay for blighted building demolition in the Steel City,” Dan Carden reminds readers of the Times of Northwest Indiana.
In court Wednesday, Shepard pointed to one familiar case as being somewhat similar to that of Eberhart: The matter involving Spectacle and former Sen. Brent Waltz (R) of Greenwood, who was a sitting member of the General Assembly at the same time as Eberhart, and who pleaded guilty to accepting $40,000+ from Spectacle and its top executives. “Those are different, sure,” Shepard acknowledged, with Waltz actually getting his money, and Eberhart ultimately taking responsibility for his actions (a subtle dig at Waltz, who left the sentencing courtroom blasting the entire proceeding and effectively denying responsibility for his actions; his challenge of the sentence he had knowingly and voluntarily accepted is still pending). Waltz’s prison sentence had been 10 months, Shepard reminded the judge.
While the sentencing memo did not formally request a specific prison sentence the low end worked out to 12 months imprisonment, and that’s what OUSA asked Judge Brookman to impose, citing, in part, the need for deterrence.
When one GOP lawmaker who had served with Eberhart saw the recommendation, they labeled it “ridiculously light,” a sentiment largely shared by at least two other former Republican legislators who were not active in gaming issues.
Sentencing Argument by Eberhart’s Counsel
Attorney Patrick J. Cotter with UB Greensfelder LLP in Chicago stated the case against any prison time whatsoever for his client, labeling hard time as “unnecessary” here.
Cotter conceded that there was like no one who “can not be moved by the concepts” of democracy and public trust as advanced by Shepard using the founding fathers, but told Judge Brookman that “I don’t think it’s fair that Sean Eberhart should be sentenced as though he is the cause of political cynicism in Indiana today.” That cynicism, according to Cotter, was “there before him,” and “will be there after him.”
The 10-month Waltz sentence, in Cotter’s eyes, was not a valid comparison. Waltz profited to the tune of $40,000, Cotter noted, but Eberhart “got zero.” He suggested that Eberhart had served the public for 24 years “without one hint” of any problems, and he had done so at considerable sacrifice.
Do not allow what he labeled as the “media interest” in the Eberhart case “to enhance the message sent” with the sentence, Cotter told the judge. “No citizen should lose even a day of their freedom because the media chooses to focus on one case for eyeballs and rating and revenues.” He added, “That’s not what we do in this country.”
We counted reporters from four outlets present at the hearing, and none were from broadcast entities. Given that this was the sentencing for the first conviction for the personal enrichment of a legislator in exchange for “favorable official action” since a big bribery/extortion scandal in the Senate more than 40 years ago, we would have expected more media attention.
“The consequences of Sean’s crime have destroyed much of the life he spent decades building,” Cotter continued, and that should serve as sufficient punishment. “He will be a felon, he will be disgraced in his hometown and state … and that’s worth more than any amount of money,” a lesson he acknowledges his client “learned the hard way.”
Cotter contended that Eberhart lived “a life of accomplishment and value.” “Who knows what he might have gone on to be had he not committed this crime,” the out of-state attorney said of his 58-year-old client, suggesting, for example, that he would now not ever see a “Sean Eberhart Junior High” or “Sean Eberhart Highway.”
Cotter alluded to character reference letters submitted to the court but which nevertheless were not available to the public before sentencing (nor even by Thursday, when the sentencing order was formally filed). He observed that most of his clients
have no real friends, but Eberhart attracted such tributes “from people who didn’t have to write letters,” and there were “many, many of those letters.”
Cotter told Judge Brookman that he should sentence “the man, not the symbol,” and “for what he did, not what the media will make of it.”
The Team Eberhart bottom line asked the court for no prison time, restitution of a full year’s legislative salary, a $25,000 fine, and probation that included community service.
Eberhart’s Own Plea to the Court
Eberhart began his relatively brief request for a light sentence by noting that he had deliberately not packed the courtroom with family and friends. He said that all three of his children (adults older than 30) were working that day, that he had asked them not to attend, and he had also suggested that friends “stay away,” citing what he believed would be “a media circus.”
“I am truly and deeply sorry for what I did,” the 16-year former lawmaker told the judge. “I am fully aware of the impact” of the crime committed, and “apologize to anyone that’s been harmed or disappointed (by) my actions.”
His bottom line: “I accept full responsibility” for the criminal actions.
Judge Brookman’s Pronouncements
Judge Brookman reminded the parties that his sentence needed to be sufficient, but not more than was necessary.
Judge Brookman reassured Cotter that “every defendant is sentenced as an individual,” and regretfully, he sentences people almost every day and does not do so lightly. “This is a serious offense,” he explained, and not just because of the amount of money involved, but because it involved an elected official. “You stood to make a lot of money” from your offense, he told Eberhart, “but there are bigger thefts.”
The judge observed that it is “critical” that the public trust its elected representatives, and “You threw that away, Mr. Eberhart. This makes this an extremely serious offense and … the sentence has to reflect that seriousness.”
As mitigating factors, Judge Brookman cited Eberhart’s lack of a prior criminal history and a strong support network of family and friends. “You are lucky in that respect,” he told Eberhart, noting that many defendants have neither the education he had earned nor such support. Considering the totality of the record and presentencing report, he concluded that Eberhart was not an incorrigible criminal but rather, “I have to believe it was simply a matter of greed.”
You “had plenty,” the judge admonished Eberhart, “but you wanted more.”
Judge Brookman then contradicted attorney Cotter, telling him “I don’t believe it was a victimless crime,” and the victims were not just his client’s Shelby County constituents, but everyone in the state.
He then pronounced the sentence we detailed for you above, noting that the 366th day of the sentence would make Eberhart eligible to earn good-time credit and potentially shave a chunk of time off his full sentence.
Meanwhile the judge added that he hoped Eberhart would “use that time to reflect.” “You’ve got a lot of life” ahead, and “You can put this behind you,” and eventually again “become a productive member of society.”
What’s Ahead
When Eberhart reports to prison and the facility in which he will serve will be worked out between the Bureau of Prisons, probation officials, and his attorney. He will continue to abide by the terms of his probation until he reports.
His post-prison probation will apparently not include drug and alcohol testing; Judge Brookman noted that the presentencing report uncovered no problems, and he added that Eberhart “would be described as a ‘social drinker,’ I suppose.”
This makes three former legislators convicted on federal felony counts related to gaming concerns in less than 24 months . . . after that state saw almost 30 years pass since the June 30, 1993 legalization of gambling without any such problems.
And of course, we circle back at the end here to the elephant on the table: What about the larger investigation into gaming matters undertaken locally (as opposed to the earlier convictions of the two other former lawmakers that were directly handled by “Main Justice” – the Public Integrity Section of the U.S. Department of Justice in Washington, D.C.)? The word “Conspiracy” appears six times in the seven-page Criminal Information filed against him (and the word “conspired” also shows up within it) . . . but there was no mention of cooperation in either the Eberhart plea agreement or the government’s sentencing memorandum.
Recall that the government revealed – and effectively boasted –in the Eberhart plea agreement that its evidence against the former lawmaker included text message communications to and
from him, call records involving Eberhart, digital images of documents sent to and/or received from him and others, as well as “covert recordings of conversations with [him], and audio and video recordings and other records of statements and actions in the Indiana legislature.”
We have heard nothing more about that trove since the November reveal, nor have we learned any specifics about the Eberhart arrangement, including how the Feds learned about it, how it was extended and accepted, who else was involved, where this might fit in as one of the pieces of a broader probe, and why the Feds have been keeping their powder dry so long on an investigation that now dates back at least five years . . . and which we believe prosecutors would like to show some results in before the presidential election and a possible change in the direction of the U.S. Department of Justice.
Curiously, in court with AUSA Shepard at the prosecution table Wednesday was FBI Special Agent Matt Stahl . . . who also accompanied Shepard at last fall’s guilty plea hearing for Eberhart, where Stahl declined to answer any of our questions about his role in the investigation.
No one’s talking . . . and we still believe that effectively speaks volumes.
Stay tuned!