Muncie mayor discusses arrest of building commissioner accused of money laundering, wire fraud

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MUNCIE, Ind. – Muncie’s mayor discussed the arrest of a city employee during a Thursday news conference.

Mayor Dennis Tyler apologized to city employees for the FBI investigation hindering with their ability to do their jobs adequately. He also assured everyone that there are no allegations of criminal acts by the city of Muncie.

Building Commissioner Craig Nichols was taken into custody on Wednesday. He faces a count of theft of government funds and dozens of counts of wire fraud and money laundering.

"There has been no allegations of any criminal acts by the City of Muncie. There may be mistakes, but not criminal acts," Tyler said.

Nichols, who served as building commissioner since 2012, is accused of using two companies he owns to earn revenue from the city for projects that didn’t receive competitive bidding.

He billed the city nearly $800,000 for work that his company never did or performed at inflated prices, according to the U.S. Attorney’s Office.

The indictment says Nichols told contractors to submit false claims and quotes to make sure the inflated bids of his companies won the jobs. He claimed invoices on four structures that were demolished when, in fact, there were no structures on the property. In effect, one of his companies received $81,500 from Muncie for demolition work that was never performed, court documents said.

At least one other city official, unnamed in the indictment, is accused of trying to help Nichols cover his tracks. City attorney Megan Quirk said she doesn't believe Mayor Tyler is that person.

"Certainly the city has issues. For example, the indictment suggests that there have been large amounts of money that have been paid out and that were improperly paid out," Quirk said.

Sources told FOX59 that more arrests were forthcoming.

In January, FBI agents raided the City Building Commissioners Office and took out dozens of boxes of paperwork.

The City of Muncie also released this statement saying:

An indictment was returned naming Craig Nichols as a defendant. Nicholas has been placed on unpaid administrative leave effective immediately. An indictment does not mean the party has been found guilty of any illegal action. Nichols entitled to due process and other rights under the law. There will be no further comments on this indictment.

The Building Commissioner's Office continues to be open and fully functioning. An Interim Building Commissioner will be named at a later date.

The City of Muncie is fully cooperating in any investigation and looks forward to a complete and early resolution of any issues. Our administration continues to operate the daily business of the city.

Nichols attorney, Scott Shockley stated about his client, "Craig denies these charges, and we look forward to our day in court to clear his name."

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