MUNCIE, Ind.– A Muncie city official was arrested Wednesday in connection with an FBI search warrant served at City Hall in January.
The U.S. Attorney’s office says Building Commissioner Craig Nichols was taken into custody Wednesday morning. He faces a count of theft of government funds and dozens of counts of wire fraud and money laundering.
His indictment shows he used his two companies, Advanced Walls and Ceilings & Capitol Consulting and Property Management, to gain revenue from the city for projects that did not receive competitive bidding.
He billed the City nearly $800,000 for work that his company never performed or performed at inflated prices, according to the U.S. Attorney’s office.
The documents show Nichols told contractors to submit false claims and quotes to make sure his companies’ inflated bids would win.
Nichols is also accused of hiding the fact that he’s the owner of Capitol Consulting and Property Management.
Documents show Nichols falsely claimed on invoices that four structures were demolished, when in fact, no structures were on the property. Advanced Walls and Ceilings received $81,500 from the City of Muncie for demolition work never performed.
Nichols is also accused of describing other locations by city block rather than specific address and asked other contractors to prepare backdated quotes.
At least one other city official is referred to in the indictment, but not by name. That city official and others allegedly attempted to help Nichols cover his tracks. Several sources say more arrests are coming.
The documents also suggest City entities like the Muncie Sanitary District are required to seek at least three quotes from contractors for projects under $25,000.
In August, CBS4 asked the Sanitary District about contracts given to Nichols’ companies for work being done– specifically for asbestos abatement and removal for the levee project.
At the time, Muncie Sanitary District Administrator Nikki Grigsby said, “We did a Google search, found this company, local, but because of the low dollar amount, we`re not required by state statute to bid that out.”
The documents state Nichols company, Capitol Consulting and Property Management is not licensed to perform asbestos inspection or abatement. Nichols allegedly billed The City of Muncie approximately $19, 450 for abatement of 17 properties in which no asbestos was found and nearly $17,000 for duplicate inspections.
Nichols is accused of falsely telling a Muncie official he obtained at least three quotes from contractors for work at Kitsleman Pure Energy Park for a project.
In January, FBI agents brought out dozens of boxes of paperwork from The City Building Commissioners Office.
Nichols could face up to 20 years in jail if convicted.
The City of Muncie provided the following statement:
“The City of Muncie has been told that an indictment has been returned naming Craig Nichols as a defendant. The City has neither received a copy nor had any communications of the indictment except press inquiries.
“The City is attempting to obtain a copy of the indictment. Assuming the City is able to gain a copy, there will be a press conference tomorrow, Thursday, February 16, 2017 at 11 am in the Mayor’s Conference Room, 3rd Floor of City Hall.”
FBI Special Agent in Charge, Jay Abbott said in a statement:
“Seeking out and investigating public officials who exploit their official position for personal gain ranks number one on the FBI’s criminal priorities list and is the sole purpose of the Indiana Public Corruption Task Force. The indictment and arrest of the City of Muncie Building Commissioner Craig Nichols is one more step in an ongoing investigation which seeks to identify and bring to justice any and all public officials or private citizens who have committed federal crimes and victimized the tax paying citizens of Muncie, Indiana.
IRS Criminal Investigation Special Agent in Charge, James Robnett said:
“Taxpayers expect government officials to serve their community not steal from them. IRS-Criminal Investigation, together with our law enforcement partners, is committed to investigating these frauds to keep our communities free of corruption.”