Vigo County Schools vs. M&P Properties (Feb. 2018)

Filed: 2/22/2018 7:10 AM
Clerk
Vigo County, Indiana
Vigo Superior Court 2

STATE OF INDIANA ) IN THE VIGO COUNTY _____________ COURT
) SS:
COUNTY OF VIGO ) 84D02-1802-CT-001243
CAUSE NO. _______________________
VIGO COUNTY SCHOOL CORPORATION, )

)
Plaintiff, )
)
v. )
)
M & P PROPERTIES GROUP, LLC, )
MICHAEL R. PICK, FRANKLIN V. FENNELL, )
and FRANK SHAHADEY, )
)
Defendants. )
COMPLAINT FOR DAMAGES AND JURY DEMAND
Plaintiff, Vigo County School Corporation (the “School Corporation”), by counsel, files
its Complaint against Defendants, M & P Properties Group, LLC (“M & P”), Michael R. Pick
(“Pick”), Franklin V. Fennell (“Fennell”), and Frank Shahadey (“Shahadey”), and in support
thereof alleges and states as follow:
PARTIES
1. The School Corporation is located in Vigo County, Indiana and operates the
public schools residing there.
2. M & P is an Indiana limited liability company with its principal place of business
located at 2610 Harrison Woods Road, Terre Haute, IN 47805 in Vigo County.
3. M & P is in the business of lawn care, landscaping, tree removal, and various
other property maintenance services.
4. Pick is the president and registered agent of M & P and resides at 2610 Harrison
Woods Road, Terre Haute, IN 47805 in Vigo County.
5. Fennell resides at 97 Woodbine, Terre Haute, IN 47803 in Vigo County.
1
6. Shahadey is believed to be residing at 505 S. Banner Drive, Terre Haute, IN
47802.
JURISDICTION AND VENUE
7. This dispute arises from fraud committed by M & P, Pick, Fennell, and Shahadey
in Vigo County, Indiana.
8. This Court has personal jurisdiction over the School Corporation, M & P, Pick,
Fennell, and Shahadey and subject matter jurisdiction over the claims and relief sought in this
case.
9. Venue is appropriate in Vigo County, Indiana pursuant to Indiana Trial Rule
75(A).
FACTUAL BACKGROUND
10. In early 2014, M & P and Pick began to conspire with the School Corporation’s
Facilities Director, Fennell, and the deputy sheriff assigned as the School Corporation’s security
liaison who was also employed with the School Corporation as a part-time security employee,
Shahadey, to defraud the School Corporation of money.
11. Fennell, with assistance from Shahadey, selected M & P and Pick to perform
certain property maintenance services for the School Corporation.
12. Defendants submitted invoices for payments related to property maintenance
services that made material misrepresentations of fact.
13. Without the knowledge of the School Corporation, the services stated in the
invoices were occasionally not performed or partially performed.
14. Furthermore, the amount in these invoices was frequently inflated well beyond
fair market rates.
2
15. Fennell then approved payment of the inflated invoices, including invoices that
intentionally misstated the work actually performed.
16. Upon receiving the School Corporation’s payment, M & P and Pick, without the
knowledge of the School Corporation, paid Fennell and Shahadey their portion of the inflated
amount or the amount paid for work not performed as a “kickback” for awarding M & P and
Pick actual or imaginary property services work.
17. This fraudulent scheme occurred until November 1, 2016 when Fennell’s
employment with the School Corporation was terminated.
18. The School Corporation paid M & P and Pick over $440,000 in relation to this
scheme. Of this amount, M & P and Pick paid Fennell and Shahadey kickbacks on $402,480.
19. On November 1, 2016, the federal government filed a criminal complaint against
Fennell and Shahadey alleging violations of Title 18, United States Code, Section 666 for theft
or bribery concerning programs receiving federal funds (“Criminal Complaint”). The Criminal
Complaint was filed in the United States District Court for the Southern District of Indiana under
case number 2:16-mj-00032.
20. In the Criminal Complaint, M & P is referred to as “Business A” and Pick is
referred to as “Individual A.” (A true and accurate copy of the Criminal Complaint is attached
hereto and is incorporated herein by reference as Exhibit A pursuant to Indiana Trial Rule
10(C).)
21. On December 14, 2016, Fennell and Shahadey were indicted for their
involvement in this scheme.
22. On October 3, 2017, Shahadey entered into a guilty plea under which he plead
guilty to wire fraud and theft of government funds. (A true and accurate copy of Shahadey’s
3
guilty plea is attached hereto and is incorporated herein by reference as Exhibit B pursuant to
Indiana Trial Rule 10(C).)
23. Shahadey’s plea agreement requires Shahadey to pay restitution to the School
Corporation in the amount of eighty thousand five hundred dollars ($80,500) for his fraud.
24. Shahadey has not submitted any payment.
25. On December 14, 2017, Fennell was found guilty of wire fraud and theft of
government funds, among other charges. (A true and accurate copy of Fennell’s guilty verdict is
attached hereto and is incorporated herein by reference as Exhibit C pursuant to Indiana Trial
Rule 10(C).)
26. A calculation of Fennell’s share of the scheme is expected to be included in
Fennell’s upcoming sentencing.
27. Pick testified during Fennell’s trial and admitted to his involvement in the
scheme. Pick testified at trial that Fennell directed him to inflate invoices and create “fake
invoices” for work never to be done.
28. Fennell also directed a large amount of work to Pick that otherwise would have
been completed by School Corporation employees at little to no costs.
29. Pick is estimated to have personally received more than $95,000 under this
deceptive scheme that unlawfully deprived the School Corporation of funds.
30. Pick has not only made fraudulent misrepresentations to the School Corporation,
but he also used M & P to perpetuate a fraud upon the School Corporation.
COUNT I – FRAUD / DECEPTION
31. The School Corporation incorporates by reference all previous allegations as if
stated fully herein.
4
32. Defendants, in a joint venture and in furtherance of their criminal conspiracy,
knowingly and intentionally made false and misleading statements of fact to the School
Corporation. This includes inflated invoices, invoices for work not completed, and invoices for
work completed that should have been performed by School Corporation employees.
33. Defendants knew the statements and invoices were false, and/or made these
statements recklessly without knowing whether the statements and invoices were true or false.
34. Defendants made these misleading written statements with the intent to cause the
School Corporation to issue payment to M & P and Pick, directly, and Fennell and Shahadey,
indirectly.
35. The School Corporation justifiably and reasonably relied and acted upon
Defendants’ false and misleading statements.
36. The School Corporation was damaged as a result of Defendants’ actions.
37. Defendants’ actions amount to fraud/deception in violation of Ind. Code § 35-43-
5-3, for which the School Corporation is entitled to recover actual and statutory damages,
punitive damages, attorneys’ fees and costs, and other statutory remedies pursuant to Ind. Code §
34-24-3-1.
COUNT II – THEFT
39. As of this date, and despite Defendants knowing payment to the School
Corporation is due, Defendants continue to retain possession of the School Corporation’s money.
knowingly and intentionally exerted unauthorized control over the School Corporation’s money
5
when they falsely created, had approved, and were paid for illegitimate invoices for property care
services that was unnecessary, inflated in cost, or never completed.
41. Defendants acted with the intent to deprive the School Corporation of its property,
which is demonstrated by Defendants’ elaborate scheme to win work that was unnecessary or
inflated in costs and their continued refusal to return the money to the School Corporation.
42. Defendants’ actions amount to theft of the School Corporation’s property in
violation of Ind. Code § 35-43-4-2, for which the School Corporation is entitled to recover actual
and statutory damages, punitive damages, attorneys’ fees and costs, and other statutory remedies
pursuant to Ind. Code § 34-24-3-1.
COUNT III – CONVERSION
44. As of this date, and despite Defendants knowing that they unjustly possess School
Corporation funds, Defendants continue to retain possession of the School Corporation’s money.
knowingly and intentionally exerted unauthorized control over the School Corporation’s money
when they falsely created, had approved, and were paid for illegitimate invoices for property care
services, including services that were unnecessary or never completed.
46. Defendants’ actions amount to conversion of the School Corporation’s property in
violation of Ind. Code § 35-43-4-3, for which the School Corporation is entitled to recover actual
and statutory damages, punitive damages, attorneys’ fees and costs, and other statutory remedies
pursuant to Ind. Code § 34-24-3-1.
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WHEREFORE, Plaintiff, Vigo County School Corporation, by counsel, respectfully
requests that this Court enter judgment in its favor and against Defendants, M & P Properties
Group, LLC, Michael R. Pick, Franklin V. Fennell, and Frank Shahadey, jointly and severally,
and award the following relief:
a. monetary damages;
b. statutory, treble damages;
c. pre-judgment and post-judgment interest;
d. attorneys’ fees and the cost of this action; and
e. all other appropriate legal and equitable relief.
JURY DEMAND
Plaintiff, Vigo County School Corporation, by counsel, pursuant to Indiana Trial Rule
38(B), hereby demands a trial by jury on all issues so triable.
Respectfully submitted,
/s/Jonathan L. Mayes
Jonathan L. Mayes (#25690-49)
Tyler J. Moorhead (#34705-73)
BOSE McKINNEY & EVANS LLP

111 Monument Circle, Suite 2700
Indianapolis, IN 46204
(317) 684-5000; (317) 684-5173 Fax
JMayes@boselaw.com
TMoorhead@boselaw.com
Attorneys for Plaintiff, Vigo County School

Corporation
3322140
7
EXHIBIT A
Case 2:16-cr-00028-JMS-DML Document 83 Filed 06/23/17 Page 1 of 19 PageID #: 360
EXHIBIT B
EXHIBIT C

Vigo County Schools vs. M&amp;P Properties (Feb. 2018)

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Filed: 2/22/2018 7:10 AM

Vigo Superior Court 2

VIGO COUNTY SCHOOL CORPORATION, )

COMPLAINT FOR DAMAGES AND JURY DEMAND

thereof alleges and states as follow:

public schools residing there.

other property maintenance services.

Woods Road, Terre Haute, IN 47805 in Vigo County.

5. Fennell resides at 97 Woodbine, Terre Haute, IN 47803 in Vigo County.

JURISDICTION AND VENUE

in Vigo County, Indiana.

9. Venue is appropriate in Vigo County, Indiana pursuant to Indiana Trial Rule

Shahadey, to defraud the School Corporation of money.

certain property maintenance services for the School Corporation.

12. Defendants submitted invoices for payments related to property maintenance

services that made material misrepresentations of fact.

invoices were occasionally not performed or partially performed.

fair market rates.

intentionally misstated the work actually performed.

Pick actual or imaginary property services work.

employment with the School Corporation was terminated.

case number 2:16-mj-00032.

20. In the Criminal Complaint, M & P is referred to as “Business A” and Pick is

involvement in this scheme.

Indiana Trial Rule 10(C).)

24. Shahadey has not submitted any payment.

26. A calculation of Fennell’s share of the scheme is expected to be included in

Fennell’s upcoming sentencing.

invoices” for work never to be done.

been completed by School Corporation employees at little to no costs.

deceptive scheme that unlawfully deprived the School Corporation of funds.

COUNT I – FRAUD / DECEPTION

31. The School Corporation incorporates by reference all previous allegations as if

stated fully herein.

Defendants’ false and misleading statements.

36. The School Corporation was damaged as a result of Defendants’ actions.

37. Defendants’ actions amount to fraud/deception in violation of Ind. Code § 35-43-

38. The School Corporation incorporates by reference all previous allegations as if

stated fully herein.

40. Defendants, in a joint venture and in furtherance of their criminal conspiracy,

services that was unnecessary, inflated in cost, or never completed.

42. Defendants’ actions amount to theft of the School Corporation’s property in

pursuant to Ind. Code § 34-24-3-1.

COUNT III – CONVERSION

43. The School Corporation incorporates by reference all previous allegations as if

stated fully herein.

45. Defendants, in a joint venture and in furtherance of their criminal conspiracy,

services, including services that were unnecessary or never completed.

46. Defendants’ actions amount to conversion of the School Corporation’s property in

pursuant to Ind. Code § 34-24-3-1.

and award the following relief:

b. statutory, treble damages;

c. pre-judgment and post-judgment interest;

d. attorneys’ fees and the cost of this action; and

e. all other appropriate legal and equitable relief.

38(B), hereby demands a trial by jury on all issues so triable.

BOSE McKINNEY & EVANS LLP

Attorneys for Plaintiff, Vigo County School

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