An attorney for the lead defendant in the Coliseum fraud case claims that prosecutors are trying to “criminalize” a contract dispute between the City of Bloomington and its former arena managers, arguing the charges should be dismissed.
John Butler’s attorney filed six motions Thursday, trying to attack the case against him on many fronts. Butler faces 44 criminal counts of fraud, theft, and money laundering related to his decade of management at the city-owned arena. Butler and four co-defendants who worked for him have pleaded not guilty on all charges.
In his motion to dismiss the case, attorney Steve Beckett says Butler’s management contract with the city called for disputes to be resolved through mediation. The city was conducting annual audits of the Coliseum, and Butler “relied on (the audits) to believe that (his company’s) business decisions about the allocation and categories of income and expenses were correct,” wrote Beckett.
Prosecutors are attempting to “criminalize a civil contractual dispute by prosecuting (Butler) for what amounts to no more than a contract dispute, and one for which the City never used its contractually mandated methods to resolve,” Beckett wrote.
Those audits show the city was warned eight years ago that its finance department wasn’t providing adequate oversight over the arena’s records, due in part to staffing shortages, GLT reported previously.
The city declined to comment Friday on the new filings. It referred back to a statement from October:
"We are aware there are many questions about the criminal charges related to the Arena. In time, we believe all of these questions will be answered and addressed. Until that time, we ask for the continued patience of the public. The possibility of fraud and collusion can never be eliminated entirely from any organization or business, but the City has taken affirmative steps to mitigate the reoccurrence of similar allegations and will continue to do so. The City’s primary focus is to ensure any potential unlawful acts, including theft from the taxpayers, are uncovered and prosecuted. The integrity of the criminal proceedings dictates certain protocols be followed and, as the City and its taxpayers are the alleged victims in this case, the City therefore cannot comment on the situation any further at this time."
In a separate motion to dismiss the case, Beckett says prosecutors misled a grand jury “into believing there was no legal basis” for Butler’s actions as Coliseum manager. That’s because prosecutors failed to enter a copy of Butler’s management contract into evidence, Beckett claims. That grand jury handed down a 111-count indictment against Butler and four others.
Beckett argues that Coliseum management records obtained by an Illinois State Police investigator through grand jury subpoenas were obtained illegally, because that investigator misused the grand jury process. One of those subpoenas—included in Thursday’s filings—shows investigators seeking a wide range of financial and business records from Butler’s Central Illinois Arena Management as early as Dec. 21, 2016, with Butler aware he was under investigation for months before his arrest.
Butler and the other four defendants are accused of an elaborate scheme that skimmed off concession fees, over-billed for cleaning supplies, and disguised other charges. Exact figures are not known; the charges indicate theft of around $1 million. Those charges stemmed from a 16-month investigation, led by Illinois State Police, generating thousands of documents and exhibits for the case.
The defense also wants Illinois State Police to return $31,430 it seized from Butler’s CEFCU bank account, according to another motion. Authorities put a freeze on $69,795 tied to Butler and his companies, spread across 17 CEFCU accounts, in September 2017 when the 111-count indictment was unsealed.
Beckett argues that the warrant used to seize the funds was unconstitutional and that Butler wasn’t given a hearing or due process. Butler “needs that money for personal, family, business, and legal expenses,” according to the motion to return property.
Butler also wants a wire fraud count against him dismissed. His attorney says the state’s fraud statute is unconstitutional because it’s so “vague and indefinite that it fails to provide reasonable notice to (Butler) about the conduct alleged.”
The motions are among many that Butler’s legal team has filed since the indictments were unsealed. Butler is also personally suing the City of Bloomington, claiming it owes him $67,175 in unpaid commissions. The city wants that lawsuit dismissed, claiming Butler isn’t owed the money because those sponsorship deals violated his management contract.
“The City views this lawsuit as an attempt to distract from the 111 felony counts facing the previous managers of the Coliseum,” city spokesperson Nora Dukowitz said in November. “The City will vigorously defend these new, baseless allegations by CIAM and is committed to fighting for the taxpayers in civil and criminal court.”
Prosecutors generally do not comment on pending cases, aside from their own court motions. A message left with McLean County First Assistant State's Attorney Adam Ghrist, who is prosecuting the case, was not immediately returned Friday.
Butler is due back in court for a status hearing Jan. 30. A separate hearing on the pending commissions lawsuit is set for May 4.
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