One Year Later, No End In Sight For Coliseum Fraud Case | WGLT

One Year Later, No End In Sight For Coliseum Fraud Case

Sep 13, 2018

It’s been a year since five former U.S. Cellular Coliseum officials were charged with 111 criminal counts—accused of a running a brazen multiyear fraud scheme that stole hundreds of thousands of dollars from Bloomington taxpayers.

In the 353 days since those indictments were unsealed, none of those five cases have been resolved. No one has been convicted or cleared. None of the cases appear close to a trial. And yet that’s not a total surprise, given the complexity of the case.

Here’s the background and the latest on the Coliseum case:

Who Was Charged?

John Butler is the lead defendant. He’s the owner of Central Illinois Arena Management, which ran the city-owned arena from 2006-2016, and a related concessions company. He faced 44 counts—the most of any defendant. Also charged are former Coliseum general manager Bart Rogers, former assistant GM for finance Kelly Klein, former concessions GM Paul Grazar, and former concessions finance chief Jay Laesch.

The city-owned venue is now called Grossinger Motors Arena and is managed by a different, unrelated company, VenuWorks.
Credit Carleigh Gray / WGLT

Their indictments capped a 16-month Illinois State Police investigation that began in 2016 after a new arena-management company noticed financial discrepancies and alerted the city. For years before that, auditors repeatedly warned city leaders their contract with Butler was riddled with ambiguity and needed to be reworked. Several issues that were flagged are now part of the criminal case.

What Are They Accused Of?

The original bills of indictment were light on details. (That’s actually been used by defense attorneys to try and get the charges dismissed.)

Some details have trickled out, namely through a related civil lawsuit between the city and Butler. In a nutshell, prosecutors and city officials allege Butler and some combination of the other four defendants skimmed off hundreds of thousands of dollars in concession fees that should have been paid to the city.

One example: Butler’s CIAM was required to pay the city between a 32 and 42 percent commission on food and beverage sales at the arena. The city would get a smaller cut (15 percent) for suite and catering sales. City officials claim CIAM “deliberately misclassified sales as suite and catering sales instead of (regular) food and beverage sales to pay a lower commission on such sales.”

What Do The Defendants Say?

In short, that they’re not guilty.

Butler’s attorneys argue that authorities improperly took a civil contract dispute between Butler and the city into criminal court. Their attempts to dismiss the case have yielded mixed results. Last month a judge dismissed 14 of the 44 counts against Butler, but prosecutors said they intend to re-indict on those charges soon, addressing the statute-of-limitations issues in the original indictments.

Also last month, two defense attempts to kill the case before trial were dismissed. A third motion to dismiss remains pending.

Other defendants have also tried to get their cases dismissed. Rogers, the former GM, has done it twice. A judge ruled that the indictments against him were too vague and did not fall within the statute of limitations.

“They only allege that the defendant obtained control of the property, in some instances by deception, without specifically alleging how that was done,” Judge Michael Stroh wrote. “That defendant … is then left to guess what acts the State is referencing and how those acts relate to the elements of the offense.”

Rogers still faces one pending theft charge, down from 13 initial charges.

Earlier this year, Grazar was in negotiations with prosecutors to resolve the charges against him. But those negotiations ended, and his attorney, Phil Finegan, filed a motion to dismiss in June. He also cited the vagueness of the charges and the statute of limitations expiration date. That motion is still pending before Stroh.

In response, prosecutor Brag Rigdon said the theft and tax-evasion charges against Grazar had enough detail to stand and were well within the statute of limitations.

“The act is clear: The manipulation of cash sales reporting (by Grazar). The result is clear: that unauthorized control over property of the City occurred by knowingly reducing commissions paid to the City,” Rigdon wrote.

Why Haven’t The Cases Moved More Quickly Toward Trial?

One reason is that these are incredibly complex cases—particularly against Butler. The case has generated thousands and thousands of documents. Butler’s attorneys have been fighting for access to more than 70 boxes of business records seized by police and for search warrant documents issued to local businesses with ties to the arena.

"Neither Jason nor Adam operated in a vacuum when moving forward on the CIAM matter."

Another factor could be prosecutorial and judicial churn. Jason Chambers was McLean County state’s attorney in September 2017 when the charges were filed, with Adam Ghrist as his top deputy. Chambers has since left to become a judge. Ghrist is now a federal prosecutor. The lead prosecutor is now Brad Rigdon, working under new State’s Attorney Don Knapp.

“Neither Jason nor Adam operated in a vacuum when moving forward on the CIAM matter,” Knapp said. “Brad Rigdon was intimately involved in the charging and handling of the case since its inception. Brad has my complete confidence. It would be unwise, and arguably foolish, to publicly discuss any of our internal discussions, processes or analysis of this matter as it proceeds through the court system.”

Judge Bill Yoder took over the Butler case from Judge Robert Freitag, who retired in July.

Joel Brown, Klein’s attorney, said his client is innocent. They’ve engaged in “some discussions” with prosecutors about resolving the 12 counts against her, though he stressed that doesn’t mean she’ll plead guilty. Because of those discussions and staff churn in the state’s attorney’s office, Brown said he’s held off filing motions to dismiss as the other Coliseum defendants have done.

“It’s come to a point where we’re gonna have to fish or cut bait at some point in the very near future,” Brown said. “We are not interested in posturing or playing hardball or puffing our chest. When there’s change, that takes time. We understand that. But we’re getting to the point where decisions have to be made.”

Knapp noted “significant activity” in the Coliseum case over the summer amid staff changes. He said “neither turnover on the bench nor at the bar has had much of an impact regarding the pace at which this matter has proceeded.”

What Would A Trial Look Like?

It might not even be in McLean County, at least for Butler.

Butler’s defense team has asked for a change of venue. They argue that the “case has been sensationalized in the local media and reported on in an unprecedented level of detail in print, on television, on the radio, and on social media, to the degree that nearly potential every juror in McLean County has been exposed to considerable information—much speculative and some untrue—about him.”

GLT’s own reporting is even referenced by Butler’s attorneys, including an October 2017 interview in which Mayor Tari Renner said “trying to deal with CIAM was like trying to deal with a Soviet Gulag.”

Butler hired a jury consulting firm to survey 200 McLean County residents. That survey reportedly found that 26 percent of those who knew about the case thought Butler was probably or definitely guilty.

“Under those circumstances trying the case against the backdrop of a massive flood of local pretrial publicity creates too much risk of denying (Butler) his constitutional right to have his fate decided by people who will listen to the evidence presented at trial without having already made up their minds about what actually occurred,” attorney Steve Beckett wrote in his July 31 motion.

What About The Lawsuit?

On a separate but parallel track, Butler and the City of Bloomington are tied up in an ongoing civil lawsuit over the Coliseum. (The venue is now called Grossinger Motors Arena and is managed by a different, unrelated company, VenuWorks.)

Butler sued the city first, claiming he was owed $67,175 in unpaid commissions. A few months later, the city countersued Butler and his companies, alleging breach of contract, civil conspiracy, fraud, and breach of fiduciary duty.

That civil lawsuit is where city officials have spelled out publicly the greatest detail about the scheme, including an internal secret document allegedly used to track the phony commissions. They claimed Butler used money from the city’s Coliseum fund—meant for operating expenses—to pay his own attorneys. If true, that would mean the city was unknowingly paying a lawyer to negotiate against itself. They also claimed Butler’s company CIAM was effectively billing the city to rent its own cleaning equipment.

The civil case is due back in court Oct. 4.

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