INDIANAPOLIS — On Tuesday, federal officials announced the outcome of a years-long investigation into systemic public corruption by Muncie city government officials.

The investigation started in 2016. Since the investigation began, several high-ranking city officials have faced charges.

“The citizens of Muncie placed their trust in a small group of government officials—many of whom were on a first-name basis with their constituents,” said Zachary A. Myers, U.S. Attorney for the Southern District of Indiana. “This systemic public corruption not only resulted in more than $1.5 million of taxpayer money lost, but also caused immeasurable distrust in local government,”

Court documents state that between 2014 and 2019, the City of Muncie engaged in a series of public works projects including the levee recertification project. This project required Muncie Sanitary district to acquire parcels of property situated near the White River, demolish homes and businesses existing on the parcels, and construct levees or storage basins so that the entire levee system could be recertified.

The projects also included the Walnut Commons project, which was an $8.3 million housing development that was intended to house veterans who were experiencing homelessness and remove blighted properties around Muncie to allow room for redevelopment.

The U.S. Attorney’s office says that public officials were required by law to solicit bids from contractors and engage in a competitive bidding process to ensure that the City hired the most qualified contractors to complete the work at the lowest cost.

Instead, court documents state that Dennis Tyler, Craig Nichols, Tracy Barton, and Debra Nicole Grigsby, under the corrupt influence of the now-deceased Phil Nichols, engaged in bid-rigging and kickback schemes. The conspirators agreed to steer work to contractors who would “pay-to-play.”

The co-conspirators admitted that Nichols decided which contractors were “greenlighted.” The office says this meant they were part of what some of the co-conspirators called the “Program” which was a bid-rigging scheme in which contracts were steered by public officials to kickback paying contractors.

As a result of the schemes, contractors were allowed to bill the taxpayers for work they didn’t do or overbill for work that they completed. In total, the office says the public officials awarded $3,230,737 in contracts to participating contractors, and as a result, the City and the Muncie Sanitary District lost approximately $1,568,324.

The office also says potential witnesses against these defendants lived in fear of retaliation because some of the defendants engaged in witness tampering and retaliation. Officials say some defendants also destroyed evidence and altered documents in an unsuccessful attempt to prevent the FBI from exposing their crimes.

“Ultimately, greed caught up with these defendants and they were held accountable for it,” said FBI Indianapolis Special Agent in Charge Herbert J. Stapleton. “The citizens of Muncie deserved better and hopefully the dedicated work of our agents to uncover this systemic corruption will help restore public trust.”


Former Mayor Dennis Tyler

In 2015, Tyler took $5K from a local excavation contractor in exchange for awarding a public works project to them, passing on lower bids or more qualified contractors. Tyler accepted the money in a parking lot from Tracy Barton who delivered the money on behalf of the contractor. 

Tyler was also found to have used his position to conceal efforts by others to defraud the city. Specifically, another contractor was paid for work they never did.

Tyler was indicted in 2019 and sentenced to 1 year in prison. He will also have 3 years of supervised release and pay $15,250 in restitution.

Former Building Commissioner Craig Nichols

Nichols was accused of using the two companies he owned to do work for the city without competitive bidding. Investigators said the companies were paid inflated service prices and sometimes paid without finishing the work.

The U.S. Attorney’s office says Nichols billed the city $800,000 and told contractors to submit false claims and quotes to make sure his bids won.

He admitted that he billed Muncie $454,400 in contracts for work he did not perform or obtained through fraud. His crimes resulted in a loss of $270,392 in taxpayer money.

Nichols was sentenced in January 2019 to 2 years in prison, 3 years supervised release afterward, and must pay $217,892 in restitution. He pleaded guilty to wire fraud and money laundering.

Former Superintendent of Sewer Maintenance and Engineering Tracy Barton

Tyler accepted the money in a parking lot from Tracy Barton who delivered the money on behalf of the contractor. Barton essentially served as a middleman who helped construction and demolition companies rig their bids for contract work related to the city’s sewer projects.

The U.S. Attorney’s Office says that in total, Barton admitted to participating in a conspiracy in which $2,053,873 in contracts were steered, at Nichols’ direction, toward paying contractors through public officials. The scheme resulted in $2,053,873 in fraudulent contracts and a loss of $1,032,682.

Barton was sentenced to 1 year of probation and ordered to pay $100 after he pleaded guilty to conspiracy to commit wire fraud. 

Former District Administrator Debra Nicole Grigsby

As Muncie Sanitary District’s District Administrator, Grigsby was responsible for approving the selection of contractors to perform work on the Muncie Sanitary District infrastructure projects.

Grigsby used her position of power to steer contracts to Tony Franklin of Franklin Building and Design LLC in exchange for kickbacks. 

Grigsby pleaded guilty to conspiracy to commit wire fraud. In exchange, 16 other charges were dismissed.

Tony Franklin

Franklin was the owner of Franklin Building and Design, LLC. The U.S. Attorney’s Office says he admitted to paying Phil Nichols and Grigsby kickbacks in exchange for receiving $1,170,667 in fraudulently steered contracts.

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

As a result, the Muncie Sanitary District overpaid Franklin more than $600,000. He was convicted of Conspiracy to Commit Wire Fraud.

Franklin was sentenced to 1 year and 1 day of imprisonment and two years of supervised release. He was ordered to pay $279,806.99 in restitution.

Former Muncie Police Officer Jess Neal

Neal served as an officer with the Muncie Police Department. Federal agents raided his home in September 2018 as part of the federal investigation.

Neal admitted to arranging for Franklin to pay kickbacks to Nichols and Grigsby so that Nichols would greenlight Franklin.

Neal pleaded guilty to conspiracy to commit wire fraud in June 2021. All other charges were dropped as a condition of the plea agreement. He was sentenced to two years imprisonment, two years of supervised release, and must pay $55,650 in restitution.

Phil Nichols

Nichols was a former chairman of a political party in Delaware County. He was regularly involved in raising money and advising political candidates running for local office in Delaware County. 

The U.S. Attorney’s Office says that, according to his co-conspirators and other paying contractors, Nichols maintained a powerful political control over Muncie officials, even though he had no official role in Muncie City Government or Muncie Sanitary District.

During the conspiracy period, the office said contractors who wished to do work for Muncie Sanitary District had to be “greenlighted” by Mr. Nichols. Only contractors who had agreed to pay bribes or kickbacks to public officials, or make contributions to certain political campaigns or parties were greenlighted.

Barton and Grigsby admitted that Nichols directed them to steer public works projects from the Muncie Sanitary District infrastructure projects associated with levee recertification to contractors who were willing to pay bribes and kickbacks.

Prior to his death, he pleaded guilty to conspiracy to commit wire fraud. All charges against him were dismissed, as required by law. 

Jeff Burke

Burke was the owner of Flea Market on East Main Street. The U.S. Attorney’s Office says he admitted to receiving an inside tip from former police officer Neal that the Muncie Sanitary District had to purchase the property in order to recertify the levee.

Acting on that insider tip, the office says Burke defrauded a bank to receive a quick loan, quickly purchased the property for $150,000 without disclosing its true value, and sold it 41 days later to the City for an inflated cost of $395,000. 

The office says Burke did so knowing that the City had no choice but to pay the exorbitant cost. His scheme resulted in a loss of $245,000 in taxpayer funds.

Burke was convicted of bank fraud and making false statements to the FBI. He was sentenced to six months imprisonment and six months of home confinement along with two and a half years of supervised release. He was also ordered to pay $245,000 in restitution.

Rodney Barber 

Barber was the owner of Barber Contracting, Inc. He admitted to paying ex-Dem party chairman Nichols $5,500 to win a contract with the sanitary district. Barber also pleaded guilty to giving Barton $5,000 for Tyler’s re-election campaign. 

In exchange, he received nearly $300,000 in public works projects associated with the Muncie Sanitary District recertification of the levee. In total, Barber’s contracts resulted in a loss of $104,250 to Muncie Sanitary District.

Barber was convicted of conspiracy to commit wire fraud, wire fraud, and making false statements. He was sentenced to 2 years of imprisonment and must pay $104,750 in restitution.