MUNCIE, Ind.-- FBI agents and Indiana State Police arrested two men Tuesday morning in connection with a probe into alleged corruption at the Muncie Sanitary District.
Sewer and Maintenance Superintendent Tracy Barton was taken into custody when he arrived for work at the district’s West Kilgore Avenue engineering offices. He is charged with conspiracy to commit wire fraud, falsification of documents and witness tampering.
Also arrested was Jeffrey Burke, who faces charges of bank fraud, lying to the FBI and obstruction of grand jury proceedings related to his sale of property to the sanitary district.
“The arrest itself of Tracy was a surprise,” said Tom Malapit, Jr., attorney for the district. “Right now the Board’s decided to go ahead and put him on administrative leave while this pending criminal investigation pursues.”
It was in early 2017 when FBI agents first sought records regarding sanitary district business and later raided Barton’s office.
“We received a little over a year and a half ago a subpoena to produce certain documents and those documents we cooperated fully and completely with the FBI to produce those documents and it was very quiet. There was another subpoena served specifically on Tracy Barton at his office location. Computers were taken, phone records were taken,” said Mapapit. “They were looking for some sort of information regarding contracts that the Muncie Sanitary District awarded to various contractors throughout town.”
The district is in the process of buying up properties in a flood plain adjacent to the White River. When the district was advised that a levee on the river had deteriorated to the point of potential failure, officials determined the most financially viable option, rather than to repair the structure, was to buy up properties that would flood.
Muncie’s former building commissioner, Craig Nichols, has already pleaded guilty to federal fraud charges of overbilling or not completing contracted work for demolition contracts undertaken by a pair of companies he owned. Some of that demolition work was in the flood plain.
“There are certain properties that as a part of different projects the Muncie Sanitary District were acquiring certain properties and some of those properties required to be torn down so to be torn down certain processes were to be put in place and contractors were hired to do that work,” said Malapit. “Tracy was familiar with the work that needed to be done and also helped write the bids that were sent out for the contracts that were to be completed to do that work so he was involved in the bid writing process and then also he would provide the certain notices that went out required and then he would report back to the board and those bids would be opened and serviced.”
One of the properties purchased and then resold to the district at an extreme profit is referred to as the Flea Market on East Main Street which was assessed for $4,600 but later sold to the district for $395,000 by Burke, double the price he paid the previous owner the month before.
Burke also owns McGalliard Guns, which has bought and resold firearms that originated with the Muncie Police Department.
Earlier this month, FBI agents raided the home of Muncie Police Officer Jess Neal, who is now on a paid leave of absence.
Neal has also been implicated in, but not charged, with the sale of property to the sanitary district at a large profit.
Former Muncie Police Chief Steve Stewart is suing Mayor Dennis Tyler after he claims the mayor ordered him to conduct what he determined would be an illegal investigation into a former city employee who was thought to be cooperating with the FBI in its probe into city hall corruption.