Man who cheated to win casino development dollars gets probation

U.S. District Court docket Senior Choose James T. Moody ordered 50-year-old Sergio Gutierrez to serve a one-year time period of probation Thursday.

The choose additional ordered Gutierrez pay a $4,000 advantageous to the courtroom in addition to $32,864 in restitution to the Lake County Treasurer’s Workplace for property taxes he illegally dodged in 2015.

Gutierrez, who beforehand lived in Lake County however has moved to Tennessee, pleaded responsible final spring to a felony rely of mail fraud.

He admitted dishonest Lake County out of hundreds of {dollars} by refusing to pay property taxes on actual property he owned in Gary.

He additionally admitted promoting these parcels for a small fortune to a growth firm related to the Exhausting Rock On line casino. The land was a part of the 30 acres wanted to construct the gaming palace at Interstate 94 and Burr Avenue in Gary.

Gary protection lawyer Derrick Julkes mentioned in a memo he wrote earlier to the courtroom that Gutierrez was born in Mexico and have become a naturalized U.S. citizen and a self-made man. Gutierrez moved to Indiana as a younger grownup and raised a household whereas working a building agency and speculating in actual property.

Julkes mentioned his shopper had no earlier legal file and solely acquired into bother by training the unlawful however usually used observe of “tax washing.”

Tax washing is the identify county officers give to an exercise by which property house owners cheat the general public out of their share of taxes assessed on actual property to fund important authorities companies. Tax washing is prevalent in Gary, the place many years of poverty have left giant swaths of metropolis with derelict homes and companies that now not contribute property taxes.

Lake County yearly makes an attempt to recoup these misplaced tax revenues by auctioning the delinquent house owners’ property to the general public at a steep low cost — generally promoting property for as little as $300 a parcel — within the hope new house owners can pay future taxes.

Assistant U.S. Lawyer Abizer Zanzi mentioned unscrupulous house owners, like Gutierrez, refuse to pay hundreds in taxes however retain management over their properties and purchase them again on the public sale for less than tons of of {dollars}.

The county forbids delinquent taxpayers from collaborating in such auctions to discourage tax washing. However Gutierrez and others have gotten round that restriction by using straw consumers to bid on properties beneath their names, then secretly handing the land again to the unique tax delinquent house owners afterward.

When Gutierrez refused to pay taxes on his 4 parcels, the county positioned them on the public sale block in its 2015 tax sale. 

Gutierrez admitted in his plea settlement that he illegally practiced tax washing for years to purchase again 4 properties on Calhoun Avenue and Dallas Avenue to avoid wasting himself greater than $32,000 in delinquent taxes and penalties.

Gutierrez and different land speculators maintain derelict parcels within the hope of reaping a windfall revenue, promoting them to companies wishing to find in Gary.

That chance arose three years in the past when plans had been introduced to construct a $300 million Exhausting Rock On line casino at Burr Avenue and Interstate 94 in Gary — inside a number of hundred ft of Gutierrez’s 4 properties.

Gutierrez admitted in his responsible plea he offered his tax-washed parcel to a developer in August 2019 for a six-figure quantity.

However his scheme was uncovered when his possession of the 4 parcels was challenged within the scramble of competing — in the course of the 2018 county tax sale — to purchase tax delinquent land across the on line casino.

A civil swimsuit over the possession of Gutierrez’s tax-washed parcels pressured Gutierrez to testify in open courtroom that he used a straw purchaser to buy the 4 properties he risked dropping to the 2018 county commissioners’ tax sale.

Zanzi concluded in his memo to the courtroom, “Actual property buyers who interact in tax washing schemes deprive native governments of a lot wanted property tax income, inhibit sincere buyers from enterprise growth in economically depressed areas.”