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May 6, 2013

Charges stand against theft suspect

Georgia man accused in million dollar theft case.

Johann Schmidt, the Deluth, Ga., businessman found guilty of stealing from First Farmers Bank, might have thought he’d resolved all of his legal jeopardy in Indiana.

But this week, the Indiana Court of Appeals allowed two additional felony theft charges to stand against Schmidt, who’d already pleaded guilty to one charge in Miami County.

Schmidt’s legal troubles stem from a business arrangement between Schmidt, the owner of a concrete crushing firm called Crushtek, and Mark Bowyer, owner of Bowyer Excavating and other ventures.

According to police affidavits filed against Schmidt in 2009, Bowyer borrowed several hundred thousand dollars to fund a joint venture between Crushtek and Bowyer Excavating, which Schmidt was to use to purchase crushing equipment.

In exchange, Schmidt promised Bowyer a 100 percent return on his investment, which included discounted purchases of crushers for resale and the exclusive right to sell Schmidt machines in various states.

Court records indicate that in 2004, First Farmers State Bank initially loaned Schmidt $790,000. Over the next few years, Bowyer paid Schmidt about $2 million, with some funds paid as an advance on Crushtek expenses, and some funds used to purchase crushing machines for resale.

At some point, Bowyer alleged, Schmidt failed to deliver machines as promised.

On one occasion, Schmidt sold a Bowyer-owned crusher to a Kentucky business, but never paid Bowyer.

On another occasion, Bowyer sent employees to Spain to retrieve two crushers, only for the employees to find one of the crushers damaged at a Spanish job site.

In a strange twist, one of the employees told police that Schmidt’s sister, who was at the Spanish job site, employed subterfuge to avoid shipping the machine back to the United States.

Although Bowyer’s employees told workers to take the machine to the Spanish port city of Malaga for shipment, a delivery driver told one of the employees that Schmidt’s sister had ordered him to take the machine to Grenada, Spain instead.

“The employee followed the machine and the driver, but was delayed by Schmidt’s sister at a restaurant as the truck that was carrying the crusher drove away. When the employee could not locate the delivery truck, Schmidt’s sister demanded another $106,000 to disclose the crusher’s location,” the court record states.

Police said Bowyer never got either crusher back from Spain.

Investigators said Schmidt became delinquent on his loans, and when First Farmers officers traveled to Georgia to visually inspect loan collateral, Schmidt sent them to storage locations which didn’t exist. Bank officials said Schmidt finally admitted to selling the collateral he’d pledged.

Bowyer pressed charges and, in 2007 after an Indiana State Police investigation, Schmidt was charged in Miami County under two separate cases totaling eight charges and was extradited from Texas where investigators, armed with warrants, tracked him down two years later.

While the Miami County charges were pending and before Schmidt was arrested, additional theft charges were filed against him in Howard County, alleging Schmidt failed to deliver machines which Bowyer had paid for. Bowyer borrowed money from STAR Financial Bank in Howard County to make the purchases.

To resolve all the charges filed against him in Miami County, Schmidt pleaded guilty to a Class D felony theft charge in one of the two cases and was sentenced to three years in the Indiana Department of Corrections. He was released in 2011.

In a unanimous ruling last week, the Indiana Court of Appeals threw out Schmidt’s motion to dismiss the still-pending Howard County charges.

His attorney had argued the charges constituted double jeopardy since Schmidt’s now-resolved Miami County charges also involved his dealings with Bowyer. Barring a successful appeal to the Indiana Supreme Court, the case now returns to Howard Superior Court II for either a plea arrangement or a trial on two Class C felony theft charges.

Scott Smith can be reached at 765-454-8569 or at scott.smith@kokomotribune.com.

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