Former state lawmaker Keeler pleads guilty to tax fraud

Former casino executive and state lawmaker John Keeler pleaded guilty in federal court Monday morning to one count of filing a false tax return in connection with a scheme to funnel illegal casino cash into a congressional campaign in 2016.

Keeler, 72, entered a plea deal just hours before his trial was set to begin Monday in the U.S. District Court for the Southern District of Indiana. In exchange for the guilty plea, U.S. prosecutors agreed to drop Keeler’s four pending felony charges, according to the 19-page plea deal.

The plea agreement details that Keeler secretly funneled $41,000 in casino cash into a Marion County Republican Party PAC in 2016. He then filed a false tax return under New Centaur LLC, the gaming company Keeler was executive of at the time, claiming the cash as a tax deduction.

Keeler could face a maximum sentence of three years, a fine of up to $100,000 and up to one year of supervised released after imprisonment. He also will have to pay $14,350 in restitution.

He was indicted in September 2020 on four counts connected to an alleged scheme to use straw donors to illegally funnel about $40,000 in casino money to former Republican state Sen. Brent Waltz’s unsuccessful 2016 campaign for the U.S. House.

Keeler’s guilty plea comes a week after Waltz, who was also indicted in 2020, pleaded guilty to two felonies related to his role in receiving the illegal campaign donations.

Waltz, 48, pleaded guilty to making and receiving conduit contributions and to making false statements to the FBI, according to the Department of Justice. He faces up to five years in prison for each offense.

Keeler was formerly vice president of Indianapolis-based Spectacle Entertainment LLC, which owned and operated the Majestic Star Casino in Gary. The allegations against him and Waltz last year led the Indiana Gaming Commission to begin an investigation that affected the construction of a casino in Terre Haute as well as the ownership of a casino in Gary.

The Gaming Commission forced Keeler and another top executive, Rod Ratcliff, to give up their ownership stakes in the projects last year and eventually pulled the license for the Terre Haute casino away from the operators they had previously been involved with.

Spectacle was also acquired by Hard Rock International last year.

The indictments against Keeler and Waltz are related to an earlier investigation from January 2020 when Republican strategist Chip O’Neil, a vice president at Strategic Campaign Group, pleaded guilty to conspiracy in federal court in Virginia. He admitted to helping collect donations from small donors in the names of candidates who never received the money.

O’Neil said in court that at least eight people, including his girlfriend, were used as conduits for illegal corporate donations to a U.S. House candidate in Indiana. Court documents did not initially reveal the candidate, but Federal Election Commission records indicated the recipient of the funds was Waltz, a Republican who unsuccessfully ran for Indiana’s 9th Congressional District in 2016.

Court records implicated an unnamed Indianapolis gaming company and its vice president and general counsel as part of the scheme. The Indiana Gaming Commission later acknowledged that company was New Centaur LLC, which at the time owned two racetrack casinos in Indiana, and the executive was Keeler.