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MUNCIE, Ind.– The Federal Bureau of Investigation (FBI) conducted a raid at Muncie Sanitary District at Muncie City Hall Tuesday and made two arrests.

The U.S. Department of Justice (DOJ) says Debra Nicole Grigsby, the District Administrator for the Muncie Sanitary District, and Tony Franklin, the owner of Franklin Building, and Design, LLC, have been indicted on charges of conspiracy to commit wire fraud, wire fraud, making false statements and falsification of documents in a federal investigation.

Grisby, 44, and Franklin, 60 were arrested and are set to make an initial court appearance this afternoon.

The Sanitary District offices were closed during the FBI’s activity.

Mayor Dennis Tyler’s administration and the Sanitary District have been under investigation for years. Several people have been arrested in connection with the investigation.

Former building commissioner Craig Nichols was sentenced to two years in federal prison along with three years of supervised released. He was also ordered to pay restitution.

Nichols was initially charged with more than 30 counts related to wire fraud and money laundering in 2017. He was accused of using two companies he owned to do work for the city without competitive bidding. Investigators said the companies were paid inflated prices for those services and were sometimes paid without finishing work.

According to court documents from the U.S. Attorney’s Office, Nichols billed the city nearly $800,000. He told contractors to submit false claims and quotes to make sure his companies’ inflated bids would win.

In September 2018, Muncie Sanitary District’s Superintendent of Sewer Maintenance Tracy Barton was indicted on charges of conspiracy to commit wire fraud, falsification of documents and witness tampering.  He’s accused of getting kickbacks. Jeffrey Burke was arrested on charges of bank fraud and lying to the FBI.

The DOJ says Grigsby served as Muncie Sanitary District’s District Administrator since 2013, and was responsible for approving the selection of contractors to perform work on Muncie Sanitary District infrastructure projects.

She’s accused of “abusing her position of public trust and agreed to steer contracts for work arising out of infrastructure projects for the Muncie Sanitary District to Franklin, the owner of Franklin Building and Design, LLC, in exchange for kickbacks,” according to the DOJ.

“Public servants need to serve the public instead of serving themselves,” said U.S. Attorney Josh J. Minkler. “When someone betrays the public’s trust by stealing tax dollars for personal enrichment, my office will identify, investigate and, if the evidence supports a charge, prosecute the individual who violates that sacred trust.”

Grigsby and Franklin face up to 20 years in prison if convicted on all charges.

“The indictment and arrest of these two individuals is one more step in an ongoing investigation to identify any and all public officials or private citizens who have committed federal crimes and victimized the tax paying citizens of Muncie, Indiana,” said Grant Mendenhall, Special Agent in Charge of the FBI’s Indianapolis Division. “Investigating public officials who exploit their official position for personal gain and erode the public’s confidence in government is one of the FBI’s top criminal priorities and is the sole purpose of the Indiana Public Corruption Task Force.”

Court documents say Grigsby and a Sanitary District supervisor agreed that the supervisor would obtain fake quotes from other contractors to demolish homes so that Franklin Building and Design, LLC’s quotes would be the lowest and Grigsby could steer contracts to Franklin’s company.

Public invoice reports show the City of Muncie paid Franklin’s company more than $130,000 for demolition services and cleanup projects.

Officials also accused Grigsby and Franklin for lying to FBI agents during interviews in 2017.

Video provided by Ro Selvey, Muncie Resident