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Feds: Bribery case has Pabey connections

George Pabey former East Chicago mayor.

George Pabey, former East Chicago mayor.

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Updated: February 2, 2013 6:17AM



Former School City of East Chicago Treasurer Frank Ramirez, now a convicted felon, wasn’t a local businessman’s only connection to the profits of tax dollars, according to a government filing in the U.S. District Court in Hammond.

Federal attorneys now say that Gerardo Lozano, a Hobart resident and owner of Greentree Builders, benefited from a friendship with former East Chicago Mayor George Pabey, who is serving a six-year sentence for stealing city dollars and employees to renovate his house in Gary, to the tune $1.3 million in contracts with the city, school district and East Chicago Public Library.

“The common denominator for all of this work was former Mayor George Pabey, who made appointments to the boards managing the School City and the library,” a sentencing memorandum filed last week says.

The memorandum goes on to say that Lozano also performed work at a house Pabey owned in Gary, the same one that led to his conviction because he had city employees work on it during city work hours.

When an unnamed East Chicago School Board member questioned a $26,887 payment to Lozano, Pabey called her afterward to tell her she should resign for her comments, according to court documents.

“I lost my job because I stood up to him,” the board member said, according to court records. “I lost income for three years.”

Lozano has pleaded guilty to bribing Ramirez with free renovation work at Ramirez’s house in exchange for $173,000 worth of landscaping work on several schools just before then-U.S. presidential candidate Hillary Clinton visited in 2008. Lozano is scheduled to be sentenced Friday.

Federal attorneys say that Lozano is disputing the amount of work he provided for Ramirez, however, which shows he hasn’t fully accepted responsibility for his crime.

They are now seeking a sentence at the high end of federal sentencing recommendations, which is not known yet.



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