FBI Investigation: More than two years into the probe of the City of Muncie

<p>The City of Muncie has been under FBI investigation for more than two years. Craig Nichols, the city building commissioner, &nbsp;was arrested charges of wire fraud, theft and money laundering in February 2017, but the investigation is still ongoing. &nbsp;&nbsp;<strong>Andrew Smith, DN</strong></p>

The City of Muncie has been under FBI investigation for more than two years. Craig Nichols, the city building commissioner,  was arrested charges of wire fraud, theft and money laundering in February 2017, but the investigation is still ongoing.   Andrew Smith, DN

It has been more than two years since the first reports of the FBI’s investigation into Muncie City Hall.

While confirmed details are scarce about the investigation’s current status, The Daily News has been following along as new information is released. 

The following is a timeline of events that have occured since the FBI began investigating the City of Muncie: 

May 12, 2016: The first news reports of the FBI investigation into the City of Muncie began. The Star Press published an article stating the FBI was looking into multiple things — primarily actions at the Building Commissioner's office, Muncie Sanitary District and Muncie Community Development — based on conversations with those familiar with the matter. The FBI did not confirm nor deny the investigation to The Star Press.

June 21, 2016: A city hall insider told The Star Press that a number of city officials have been interviewed and the investigation is “wide and far reaching.” The insider also told The Star Press “If [The FBI is] not looking into … the sanitary district, they’re silly.”

July 11, 2016: The Star Press reported more FBI agents were coming to Muncie. After looking into public records subpoenaed from the City of Muncie, The Star Press also reported the FBI seemed to be looking into contracts for work performed for the city, including work done by Craig Nichols, the city building commissioner appointed by Muncie Mayor Dennis Tyler.

Jan. 5, 2017: A search warrant was executed at Muncie City Hall. Tyler released a statement confirming the search of the Building Commissioner’s office and stated, “the City intends to cooperate fully in the investigation, and looks forward to a complete and early resolution of any issues.”

Feb. 14, 2017: An indictment was filed in the U.S. District Court - Southern District of Indiana - Indianapolis Division against Nichols. 

Feb. 15, 2017: Nichols was arrested in the morning on charges of wire fraud, theft and money laundering. A press release from the U.S. Attorney’s Office stated Nichols’ arrest was the result of a year-long and ongoing investigation, with the U.S. Attorney’s Office, FBI and Internal Revenue Service. 

Nichols, who became the building commissioner in 2012, is alleged, according to the press release, to have “abused his position of trust by using sham bidding practices and submitting fraudulent invoices to steer work to his companies, and then bill Muncie more than $376,000 for work his company either never performed or performed at inflated prices.” 

FBI Special Agent in Charge W. Jay Abbott said Nichols’ arrest is “one more step into an ongoing investigation.”

Feb. 16, 2017:Tyler held a press conference at City Hall where he said Nichols was placed on unpaid administrative leave. When Tyler began to speak on the investigation against the advice of his attorneys, The Daily News reported “city attorney Megan Quirk interrupted and said, “Pardon me, we are not speaking of the indictment.’” However, Quirk did say she believed one of the two city officials named in the indictment as “City official A” and “another city official” to be Tyler. 

May 18, 2017: The FBI and officers from the Indiana State Police were at the Muncie Sanitary District Engineering Office for what the FBI said was “investigative activity in that area.” In a press release from the City of Muncie, the city said it was aware of law enforcement activity through media reports, but was unaware of the reasons. 

July 11, 2017: A 17-page indictment by the U.S. District Court was released and further explained the reasoning behind Nichols’ arrest and his 34 charges. 

Oct. 12, 2017: Almost a year after Steven Stewart resigned as city police chief, he filed a lawsuit against the City of Muncie, which revealed more details about the FBI investigation. The lawsuit revealed that Tyler asked Stewart to have the Muncie Police Department conduct an investigation of an employee who was possibly cooperating with the FBI.The lawsuit also revealed details about Stewart’s conversations with City officials, including Tyler and the FBI. 

March 1, 2018: In an interview with The Star Press, when asked if he has ever been contacted by the FBI, Tyler said, “Never, never.” When asked about his opinion on the investigation, Tyler said he “can’t say much” because of his limited knowledge, but doesn’t want to “allow it to delay our vision for the city.” 

July 19, 2018: Nichols agreed to plead guilty in U.S. District Court. He faced 34 criminal charges and agreed to plead guilty to wire fraud and money laundering, though the other 32 chargers are to be dismissed. Nichols now faces up to 20 years in prison and a $250,000 fine for each of his two counts.

This story will be updated as more information is released about the investigation. 

Contact Andrew Smith with comments at ajsmith15@bsu.edu or on Twitter @AndrewSmithNews. Contact Brooke Kemp with comments at bmkemp@bsu.edu or on Twitter @brookemkemp.


More from The Daily

This Week's Digital Issue

Loading Recent Classifieds...