Former Indiana Legislator Arrested After Committing Honest Services Fraud

Federal prosecutors arrested Sean Eberhart, a former Indiana legislator, on Friday after pleading guilty to committing honest services fraud with a gaming company, Spectacle Entertainment, during his time in public office.

The court documents were filed on Thursday with an offense punishable by a maximum sentence of five years in prison, three years of supervised release following any imprisonment, and a $250,000 fine.

Eberhart Arrested for Honest Services Fraud

Indiana State Legislature Holds Special Session To Consider New Abortion Laws — INDIANAPOLIS, IN - JULY 25: Testimony is given in the Indiana state Senate chamber at the Capitol on July 25, 2022 in Indianapolis, Indiana. The legislature is holding a special session to consider curtailing abortion rights in the wake of the U.S. Supreme Court ruling overturning Roe v. Wade last month. Jon Cherry/Getty Images

According to the court documents filed on Thursday, Eberhart agreed to plead guilty to conspiracy to commit honest services fraud.

The prosecutors reported that he was accused of accepting compensation and used his position to promise future employment from a gaming company in exchange for favorable action in the General Assembly. The promise of future employment at Spectacle has an annual compensation of at least $350,000.

The court documents said Spectacle Entertainment planned to purchase two casinos and their accompanying state licenses located on Lake Michigan in Gary, Indiana. The company wanted to relocate them to locations in downtown Gary and western Indiana's Vigo County in 2018.

The U.S. Attorney's office explained that the purchases and relocating of casinos required approval by the Legislature and governor. In 2019, a bill was introduced by the House Committee on Public Policy, wherein Eberhart was a member and voted to pass the bill with the successful relocation approval.

The bill would reduce the transfer fee from $100 million to $20 million and enact tax incentives on terms favorable to Spectacle.

According to the court documents identified as "Individual A," some evidence showed the text messages sent by Eberhart, leading his efforts to secure legislation in favor of the company. The message that he would "make it right" was forwarded to Spectacle's founder.

However, the U.S. Attorney's Office did not immediately respond when asked whether "Individual A" would be under investigation and face charges.

The investigators also collected call records, digital images of documents, and audio and video recordings that state other records of statements and actions in the Indiana legislature.

Republican Speaker of the House Todd Huston commented on Eberhart's case and admitted that he was disappointed and frustrated with him.

"Any such conduct runs counter to our core values and everything our assembly stands for and strives to protect - a trusted, credible and transparent institution that's responsible only to Hoosiers," Huston said.

Spectacle's Past Federal Investigations

In 2022, casino executive John Keeler was convicted by a former Indiana state senator, Brent Waltz, of illegal funneling of gambling money into the lawmaker's unsuccessful 2016 bid for Congress.

Keeler was a Republican legislator for 16 years in the 1980s and 1990s and was convicted to two months in federal prison and fined $55,000.

During Keeler and Waltz's indictments in 2020, the Indiana Gaming Commission forced Keeler and another casino Executive from ownership of two casino projects.

Furthermore, Waltz was sentenced to 10 months in federal prison for directing $40,000 in illegal contributions to his campaign and making false statements to the FBI.