Former state representative Sean Eberhart sentenced to federal prison for corruption

INDIANAPOLIS — A former state lawmaker representing part of Bartholomew County will spend time behind bars after pleading guilty to a corruption charge.

U.S. District Judge Matthew P. Brookman on Wednesday sentenced Sean Eberhart, R-Shelbyville, to one year and a day in federal prison, officials told The Republic. Eberhart also was fined $25,000 and given one year of supervised release.

The sentence was handed down in U.S. District Court in Indianapolis on Wednesday.

Eberhart, who represented Indiana House District 57 from 2006 to November 2022, was facing up to five years in prison and a $250,000 fine after pleading guilty to conspiracy to commit honest services fraud last year.

The district included the eastern half of Bartholomew County until the district was redrawn following the U.S. Census.

Last week, federal prosecutors asked the judge to impose a sentence on “the low-end of the applicable guideline range determined by this court, a fine of $25,000, and impose a term of two years of supervised release,” according to a sentencing memorandum.

While prosecutors emphasize that “imprisonment is particularly deterrent in white collar cases,” they did not directly ask the judge to impose any specific amount of prison time.

“(Eberhart) used his position of power and privilege to violate the law,” U.S. Attorney Zachary A. Myers states in the memorandum. “Such conduct is especially serious when the defendant is a public official because the crime affects the public’s faith in democracy itself. …General deterrence is a critical component of sentencing in white collar cases like this one. White collar criminals engage in a cost-benefit analysis – weighing the risks associated with getting caught against the potential financial gain from the offense – when deciding whether to commit their offenses. For this reason, imprisonment is particularly deterrent in white collar cases.”

“A sentence outside the guidelines range in this case would create disparities with other types of offenders that would reinforce the perception that white collar offenders receive special treatment and would thus undermine deterrence as well as respect for the law,” Myers adds later in the memorandum. “…Defendant’s past does not mitigate against a low-end guideline sentence. Rather, Defendant’s past and his former position as a State Representative position makes him more culpable – not less.”

The charges stem from efforts by Spectacle Entertainment to purchase two casinos on Lake Michigan in Gary and their state licenses and relocate them to inland locations in downtown Gary and Terre Haute, according to federal court filings.

Purchases and relocations of casinos in Indiana must be approved through the passage of a bill by both chambers of the state legislature and signed by the governor.

In 2019, a bill was introduced in the House Committee on Public Policy and later the House floor that would allow Spectacle to purchase the casinos and relocate them.

Eberhart was a member of the House Committee on Public Policy at the time, which had jurisdiction over matters concerning casinos and gaming in Indiana.

Around that time, an owner of Spectacle, identified in court records as “Individual A,” offered Eberhart future employment at Spectacle with an annual salary of $350,000 in exchange for advocating and voting to pass the bill on terms that were favorable to Spectacle.

Those terms included, among other things, reducing the originally proposed $100 million transfer fee that Spectacle would be required to pay to acquire the licenses of the two casinos and favorable tax incentives, court records state. The transfer fee was ultimately reduced to $20 million.

In March 2019, Eberhart advocated for removing the $100 million transfer fee from the bill during a House Committee on Public Policy hearing.

According to coverage by The (Munster) Times in March 2019, Eberhart “questioned the need to attach a $100 million fee” to relocation of the casinos.

“To me that’s a tough one to swallow,” Eberhart is quoted as saying. “That’s an extreme amount of money. If we had a private company, whether that’s a manufacturer or some other private company, come to us and say, ‘Hey, we want to invest $300 million on the Borman in Gary and want to invest $150 million in Terre Haute,’ we’d get out our checkbooks as the state of Indiana. We would be writing them a check. We would be giving them incentives. We would be begging them to make that investment.”

In April 2019, Eberhart communicated with an unidentified individual regarding the status of the bill and efforts to “make it write for (Individual A).” That same month, Eberhart advocated for a 20% tax rate that would save Spectacle tens of millions of dollars.

Court filings include alleged text messages from Eberhart to an unidentified individual in which the former lawmaker states, “We’ve got work to do and 2 casinos to open.”

“Prior to his crime, Defendant served for approximately 13 years as the elected representative of Indiana House District 57, a position of public trust,” Myers states in the memorandum. “He was in this role when committed the offense. In addition, Defendant was a successful business owner at the time of the offense. This was not enough for Defendant, he wanted more and chose to commit a crime of economic opportunity, not necessity, to get what he wanted. Defendant let the allure of an annual salary in excess of $350,000 cause him to betray his responsibilities to the people of the 57th district, and the state at large.”