UPDATED: Former U.S. Cellular Coliseum Managers Accused Of Money Laundering And Theft
The former managers of the formerly-named U.S. Cellular Coliseum are accused of stealing hundreds of thousands of dollars from the City of Bloomington through an elaborate scheme that skimmed off concession fees, over-billed for cleaning supplies, and disguised other charges.
The grand jury indictments were unsealed Monday. Five former managers and employees of the Coliseum (now called Grossinger Motors Arena) and a related concessions company face 111 counts of theft, fraud, money laundering, and other crimes related to their alleged scheme.
The total amount allegedly stolen was unclear Monday. The indictments indicate at least $615,724 in stolen concession fees, $265,887 in redirect money earmarked for utilities and other spending, and $88,295 in over-billed or double-billed cleaning supplies and equipment. That totals nearly $1 million.
Authorities announced charges against:
John Butler, 58, of Bloomington. Faces 44 counts—the most of any defendant—for his alleged leadership role in the scheme. Butler owned the Coliseum’s management company, Central Illinois Arena Management (CIAM) and a related company, BMI Concessions.
Bart Rogers, 47, of Morton. The former general manager of the Coliseum faces 13 counts, including improper credit card transactions totaling $8,476.
Kelly Klein, 57, of Bloomington. The Coliseum’s former assistant general manager for finance faces 12 counts of theft and other charges.
Paul Grazar, 50, of Normal is the former general manager of BMI Concessions.
Jay Laesch, 27, of Heyworth is the former director of finance for BMI Concessions.
The charges capped a 16-month Illinois State Police investigation that began in May 2016 after a new management company, VenuWorks, took over the Coliseum in March 2016. Authorities say VenuWorks told city officials they discovered financial "discrepancies" related to the arena's previous manager, Butler's CIAM.
The allegations add new fuel to the fire for longtime critics of the city-owned arena. The venue has regularly lost money, including a larger-than-expected operating loss of $673,518 last year alone. The charges could also raise questions about the city’s oversight of the venue, given that aspects of the alleged scheme lasted eight years apparently without detection.
“The city is fortunate to have a group of very dedicated and talented individuals, under the direction of John Butler and Bart Rogers, managing the city-owned Coliseum,” Bloomington City Manager David Hales said in a statement as recently as September 2015, months before VenuWorks took over management duties.
A request for comment with Hales was not immediately returned Monday. Hales is leaving Bloomington to take the city manager position in Joliet in November.
Multiyear Scheme Alleged
The alleged schemes date as far back as 2007, soon after Butler’s company began managing the new city-owned arena. The 44 counts against Butler allege a multiyear scheme to skim off hundreds of thousands of dollars in concession fees that should have been paid to the City of Bloomington, according to the indictments. Some items were improperly discounted through the “Kelly Discount”—an apparent reference to Klein—costing the city additional money.
Those running BMI Concessions, the Coliseum’s in-house food and beverage provider, allegedly used their own pricing scheme to steal thousands of dollars in commissions due to the city. Instead, that money was retained as profit by BMI Concessions, prosecutors allege in their indictments.
Butler also faces money laundering and wire fraud charges. He’s also accused of filing fraudulent tax returns for allegedly understating the amount of taxable sales.
Several of the indictments unsealed Monday are Class X felonies, which carry a minimum sentence of six to 30 years in prison if convicted.
"It was a very extensive investigation that State Police and the (Illinois Department of Revenue) investigators were involved in. It took well over a year. Thousands and thousands of pages of documents for them to go through," said McLean County State's Attorney Jason Chambers, whose office is prosecuting the cases. "There's no way to go through that thoroughly in a quick manner."
Will Plead Not Guilty
Butler, who previously said he felt “ambushed” by the allegations, plans to enter pleas of not guilty to all counts, his attorney, Steve Beckett, said in an email to GLT. The longtime McLean County resident now works for Consolidated Sports Holdings and helps manage five minor league hockey clubs, Beckett said.
"John cooperated with officials in the investigation stages of this case and self-surrendered (Monday) after learning of the indictment," Beckett said. “As of now, one must just remember that John is presumed innocent and the prosecution must prove the charges that have been filed.”
Butler and Rogers are also minority co-owners of the Peoria Rivermen, a professional hockey team in the SPHL. Calls to Rogers at the Rivermen office were redirected to Bloomington attorney Stephanie Wong. A message left with Wong on Monday was not immediately returned.
Arrest warrants were issued for all five suspects. Butler turned himself in, a McLean County jail official confirmed. Rogers, Klein, and Grazar were taken into custody by Illinois State Police, the jail official said. Laesch was taken into custody by Illinois State University police; Laesch works at ISU.
All five have posted bond and are not being held in the McLean County jail.
Attempts to reach Laesch and Grazar were not successful Monday. Klein could not be reached.
(This story was updated and expanded on 9/25/17)