The building commissioner of Muncie, Indiana, was arrested and indicted last week on federal charges of wire fraud, theft and money laundering.
Craig Nichols, 38, who has been Muncie’s building commissioner since 2012, used his position for personal gain by steering city business to his private companies.
He is charged with 16 counts of wire fraud, one count of theft of government funds and 16 counts of money laundering.
As building commissioner, Nichols had authority over building inspections, permits and code enforcements in Muncie. The federal indictment alleges Nichols used “sham bidding practices” and “fraudulent invoices” to give city contracts to his private business — which performs demolition work and asbestos removal — and then billed the city $376,000 for work that was done at inflated prices or, in some cases, was never done at all.
“Public officials engaged in personal financial gain with taxpayer funds can never be tolerated,” said IRS Criminal Investigation Special Agent in Charge James Robnett in a press release. “Taxpayers expect government officials to serve their community not steal from them. IRS-Criminal Investigation, together with our law enforcement partners, is committed to investigating these frauds to keep our communities free of corruption.”
The indictment outlines how Nichols took advantage of a Muncie public works project by the White River to make way for the construction of new levees, and another project which was meant to expand a park through acquisition of adjacent lots.
For work associated with these projects, Muncie awarded $376,625 to Nichols’ companies — Advanced Walls and Ceilings and Capitol Consulting and Property Management — and wrote checks that were deposited in the company bank accounts at Star Financial Bank.
The indictment also alleges Nichols intentionally concealed his ownership and interest in his companies. He also failed to file a conflict of interest form until after the FBI subpoenaed his company’s records.
From 2012 to 2016, Muncie has paid $788,471 to Nichols’ companies for various demolition, construction, asbestos inspection and abatement work, according to the indictment.
The city of Muncie has a rule which demands it consider three different quotes for public works projects. Nichols instructed other contractors to submit fake quotes to mask his own companies’ inflated prices and to ensure the work would be awarded to his companies.
Nichols submitted invoices for four properties where his companies allegedly did demolition work and debris removal for the Muncie public works projects in summer and fall of 2015. However, “there were no structures on the properties to demolish, and Advanced Walls and Ceilings performed no work,” prosecutors wrote in the indictment.
To hide the fact that no work had been done, Nichols submitted other sets of invoices that described the properties by city block rather than address, changed the date of when the demolition work had allegedly been completed, and said the work had been done on an emergency basis to bypass the city’s three quote rule.
The indictment refers to multiple other city officials who worked with Nichols in his schemes, but none of them are named.
The FBI has been investigating this case for more than a year, and the investigation is still ongoing. In January, a search warrant was served and executed at Muncie City Hall.
Investigators searched Nichols’ office and his home, seizing several files and a computer.
“Public servants need to serve the public instead of serving themselves,” said United States Attorney Josh Minkler in a press release. “When someone betrays the public’s trust by stealing tax dollars for personal enrichment, my office will identify, investigate and, if the evidence supports a charge, prosecute the individual who violates that sacred trust.”
Nichols’ attorney, Scott Shockley, could not be reached for comment.
