Former mayor of Muncie sentenced to year in prison for government theft

INDIANAPOLIS (WISH) — Former Muncie Mayor Dennis Tyler on Wednesday was sentenced to a year in prison after agreeing to a plea deal to be found guilty of theft of government funds.

The maximum penalty facing the former Democrat mayor was 10 years in prison followed by 10 years supervised release, plus a $250,000 fine. However, prosecutors had recommended Tyler receive a sentence on the “low end” of prison time and a fine.

Tyler, 78, will face three years of supervised release upon his release from prison.

The former mayor was arrested in November 2019, just months before he completed eight years in office on Jan. 1. An FBI investigation of Tyler had begun in 2016.

In the plea deal, Tyler admitted to receiving $5,238 to steer Public Board of Works contracts to an unnamed company. The contracts included ones involving the Walnut Commons project, a housing development intended for people experiencing homeless and disabled veterans, and the Nebo Commons project, a site for two new car dealerships.

According to court documents, “Tyler received a personal benefit from a different city contractor in early 2015. The contractor performed tree removal work at Tyler’s personal property worth approximately $1,800, with the expectation that doing so would keep the contractor on a list of eligible bidders for city work,” said a news release from the U.S. Justice Department.

Also according to court documents, “Tyler used his position to try to conceal efforts by others to defraud the City of Muncie,” the release said. “Specifically, a separate contractor had submitted, and was paid on, invoices for work that had never been performed. To provide cover for the contractor after the FBI initiated an investigation, Tyler asked two city employees to state they had requested quotes from that contractor, which was untrue. Ultimately, the employees refused.”

Tyler will also have to pay restitution to the city of $15,250 as part of the deal. He also lost the right to appeal his conviction and sentence as part of the deal.

A U.S. Department of Justice news release on Wednesday also said eight other people have been charged in connection with the FBI’s investigation of corruption in Muncie’s city government: 

• Tracy Barton, 51, Selma, Indiana, was indicted in September 2018 for conspiracy to commit wire fraud, falsification of documents in a federal investigation, and witness tampering. His case is pending.
• Jeff Burke, 55, Muncie, Indiana, was indicted in September 2018 for bank fraud, false statements to agents of the federal Bureau of Investigation, and obstruction of grand jury proceedings. His case is pending.
• Rodney Barber, 53, Muncie, Indiana, was indicted May 2019 for conspiracy to commit wire fraud, wire fraud, and false statements. His case is pending.
• Phil Nichols, 75, Muncie, Indiana, was indicted in March 2020 for conspiracy to commit wire fraud, wire fraud, and witness tampering. His case is pending.
• Debra Nicole Grigsby, 47, Muncie, Indiana, was indicted in March 2020 for conspiracy to commit wire fraud, and wire fraud. Her case is pending.
• Jess Neal, 54, Yorktown, Indiana, was indicted in March 2020 for conspiracy to commit wire fraud, and wire fraud. His case is pending
• Tony Franklin, 62, Yorktown, Indiana, was indicted in March 2020 for 2 counts of conspiracy to commit wire fraud, 2 counts of wire fraud, and 2 counts of false statements. His case is pending.
• Craig Nichols, 42, Selma, Indiana, was indicted in February 2017 for 16 counts of wire fraud, theft of government funds, and 16 counts of money laundering. He was sentenced in January 2019 to 2 years in prison, serve 3 years of supervised release after his imprisonment, and ordered to pay $217,892 in restitution.

Statements

“Mr. Tyler’s greed caught up with him and he will now be held accountable. The citizens of Muncie and the hard-working city employees deserved better out of their mayor, and hopefully this sentence will help restore some public trust and confidence in the government that serves them.”

Acting U.S. Attorney John E. Childress

“This sentence shows that public corruption will not be tolerated. Mr. Tyler was entrusted by the community to represent their interests but instead chose to betray that trust through his abuse of public office for his personal gain. Public corruption is a top criminal investigative priority for the FBI, and we encourage the public to continue to come forward and report abuses of public office.”

FBI Indianapolis Special Agent in Charge Paul Keenan