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January 18, 2013

Ind. Charity Head Admits to $1.7-Million Ethanol Scam

The leader of an Indianapolis-based foundation pleaded guilty Thursday to wire fraud and money laundering in connection with a scheme to swindle $1.7-million from a local doctor, The Indianapolis Star reports.

Prosecutors said Michael Russell, who founded the Russell Foundation in 2003, and two other men persuaded an area dermatologist to invest in an ethanol-production company, promising a more than tenfold return, but instead spent the $1.7-million on themselves in a 33-day spree.

U.S. Attorney Joseph H. Hogsett said after the plea hearing that the foundation, which had a stated mission of aiding the poor and improving local communities, "had one and only one true purpose: to line the pockets of Mr. Russell and his friends."

Mr. Russell is scheduled to be sentenced in May and faces up to six years in prison. The two co-defendants, one of them a former Indianapolis council member, are slated to stand trial next month.