Lake Station mayor, wife indicted
By Teresa Auch Schultz firstname.lastname@example.org | (219) 713-7818 April 16, 2014 6:23PM
Lake Station Mayor Keith Soderquist, March 15, 2011. | Sun-Times Media
Updated: April 17, 2014 11:38AM
Lake Station Mayor Keith Soderquist and his wife used money meant to feed the needy to feed their gambling habit, according to federal prosecutors.
The U.S. attorney’s office in Hammond announced Wednesday evening two separate indictments against Soderquist, 44, and Deborah Soderquist, 55, and one of the cases accuses his stepdaughter, a former Lake Station employee, of stealing bond money posted at city court and committing bankruptcy fraud.
Scott King, who is representing the Soderquists, said his clients have been cooperating with federal agents for more than a year.
“We really have a very fundamental disagreement about their interpretation and our interpretation,” King said.
The first indictment charges the Soderquists with taking money from the Lake Station Food Pantry, which receives money from city and state tax dollars and local donations, and the mayor’s campaign fund for their personal use, including dozens of trips to Four Winds Casino in New Buffalo, Mich., from 2010 to 2012.
The indictment claims that on 67 days over the three-year period, the couple withdrew money — at least $18,500 — from the bank account of the Committee to Elect Keith Soderquist and traveled to the casino each time.
On at least one occasion, the couple withdrew $300 from the food pantry’s bank account and were at the casino within three hours, according to the indictment. It says they are also accused of making 14 wire transfers from the two funds for personal use over the same time period.
The indictment says they lost $45,000 to gambling in 2010, $32,000 in 2011 and $27,000 in 2012.
The Soderquists hid their activity by not reporting the campaign fund withdrawals on election forms they must file, and Mayor Soderquist had all bank statements for the pantry, which his wife oversaw, sent directly to his office. Deborah Soderquist worked as the mayor’s administrative assistant.
The indictment does not say exactly how much money was taken from the pantry or campaign fund. It charges the Soderquists each with one count of conspiracy to commit wire fraud, six counts of wire fraud and three counts of filing false tax returns for not reporting the diverted money as income on federal returns for 2010, 2011 and 2012.
The second indictment says Miranda Brakley, 33, a former city court clerk, stole at least $5,000 in bond money from city court from August 2011 to July 2012 and also hid $7,000 in income she received from the city from her bankruptcy case, which she filed in August 2012. The Soderquists are also charged with helping her hide the thefts.
Brakley’s court job became a legal issue between the city judge and the mayor after the judge fired her in June 2012. Soderquist took control of all the court clerks two weeks later and rehired Brakley, but the judge sued the mayor and city council, regaining control over the clerks. Brakley was then fired again.
An Indiana State Board of Accounts audit released in January 2013 disclosed that $16,464 in bond money paid by defendants was missing from the court’s account, money that was mostly overseen by Brakley. She turned over $15,800 to the city in December 2012, claiming that she had accidentally taken the money while cleaning out her desk and had left the box with the money sitting untouched in her vehicle the whole time.
The second indictment also charges the Soderquists with violating federal banking law. It says they drove to Kentucky in December 2012, where a person, not identified in the indictment, gave them $15,000.
The couple told the person to write three checks, each totalling less than $10,000 and to write different dates on them, the indictment says, and the mayor and his wife cashed one of the checks at a Chase Bank in Bowling Green, Ky., and the other two at Chase Banks in Munster and Merrillville. Federal law requires banks to report any activity greater than $10,000.
King said the Soderquists had not been arrested as of Wednesday evening, but he expected they would make their initial appearance at the U.S. District Court in Hammond on Thursday.
Several Lake Station council members said Wednesday that they were surprised by the indictments.
Councilman Rick Long said that although he knew that federal authorities had been investigating the mayor, he thought any case must have been dropped when he hadn’t heard anything in some time.
“Sometimes we get this false impression that no news is good news,” Long said. “He had a lot of potential; you don’t want to see him get in trouble.”
Long said Soderquist has been absent from several recent political events in the city and was not in the office Tuesday, although Long said he was told that his wife was sick and he was with her.
He said Soderquist had worked to find the food pantry its own space several years ago, adding that he thought the Soderquists “were doing a great job with the food pantry.”
Councilman At-Large Todd Lara said he and the Soderquists have been friends for years, and he was shocked at the news.
“I’m definitely surprised. I didn’t see this coming,” Lara said. “I’m actually devastated because no matter what happens, even if (the mayor) is found not guilty, it tarnishes everything we’ve tried and worked so hard to get away from as far as the city’s image before.”
Contributing: Michael Gonzalez