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Jay Laesch, left, appears last year in court at the McLean County Law and Justice Center, Bloomington. He pleaded guilty Wednesday in McLean County Circuit Court to money laundering and filing a fraudulent tax return. 

BLOOMINGTON — One of five former management officials of the city-owned arena charged with mishandling public money pleaded guilty Wednesday to money laundering and filing a fraudulent sales tax return.

Jay C. Laesch, 38, of Heyworth was fined $1 and sentenced to 30 months on probation. He must cooperate with authorities on other arena cases and testify at the trials of three co-defendants as part of the plea deal. 

Laesch was charged with theft, money laundering, filing a fraudulent tax return, wire fraud, conspiracy to commit tax evasion and tax evasion. Charges related to his work as finance director of BMI Concessions, the former food and beverage provider for the venue then known as U.S. Cellular Coliseum. 

Laesch was one of five former management officials indicted in September 2017 on charges accusing them of stealing money the city was entitled to under its 10-year contract with Central Illinois Arena Management (CIAM).  Charged are John Y. Butler, president of CIAM; Bart Rogers, CIAM general manager; Laesch; and CIAM employees Paul Grazar and Kelly W. Klein.

A statement of facts to support the plea was read in court by First Assistant State's Attorney Brad Rigdon.

The internal method of collecting cash from concessions, including beer carts, was laid out in the statement. The alleged scheme to skim money from the city's share of concessions also was explained by Rigdon.

Cash from the portable beer carts was counted by hand before it was placed in a vault.

"At the direction of John Butler and Paul Grazar, Jay Laesch would enter the vault and remove varying amounts of cash," said the statement. Laesch then reduced the amount of cash removed from the vault from deposit sheets and changed settlement worksheets so the numbers matched, said the prosecutor. 

But Laesch did not change the handwritten cash sheets completed by vault workers and those reports were among Butler's records seized by state police, said Rigdon. Between Jan. 4, 2013, and March 29, 2016, $102,571 was removed from the vault, said the statement.

The diversion of the funds denied the city $10,000 in commissions, Rigdon said in support of the money laundering charge.

Laesch told investigators that during the investigation he received a call from Grazar in which Grazar asked "whether he changed the handwritten sheets so that the scheme would not be uncovered," said Rigdon.

According to the prosecutor, Grazar told investigators that "at one point, $12,000 of the money removed from the vault was used to pay earned bonuses to three different people, including Grazar."

The single count of filing a fraudulent sales and use tax return is based on the failure by Laesch to disclose all taxable sales, according to the state. The failure decreased the tax liability for BMI by more than $300 per month, said Rigdon's statement.

Rigdon acknowledged Laesch's role as "a middle man" in the transactions who did not benefit financially from the scheme. The defendant's willingness to cooperate with authorities and share his inside information about arena operations and the actions of Butler, Klein and Grazar also were offered as reasons to support the plea agreement.  

Laesch has agreed to testify at trials for Butler, Klein and Grazar.

Laesch's defense lawyer Steve Skelton said the plea deal allowed Laesch to avoid a trial on seven Class X felony charges with mandatory prison terms of six to 30 years.

"The consequences for him and his family would be astronomical," said Skelton.

Laesch "did nothing that he was not directed to do in the course of his employment. He didn't benefit a penny from any of this activity," said Skelton.

At a recent hearing Klein's lawyer said talks with the state to resolve her case have broken down and the defense will be filing pretrial motions with an eye toward a trial on the charges.

Butler has challenged the state's voluminous seizure of his business records. Judge William Yoder has taken under advisement Butler's claim that Illinois State Police improperly seized records outside the scope of a search warrant.

The  lawyer for Grazar, who was the former food and beverage director for CIAM, asked Stroh to cancel a Dec. 10 trial on theft, money laundering and tax-related charges after the state filed indictments Wednesday against Grazar. The indictments include previous charges dismissed by a judge because of statute of limitations issues.

All the defendants are free on bond.

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Contact Edith Brady-Lunny at (309) 820-3276. Follow her on Twitter: @pg_blunny

McLean County Courts Reporter

McLean County courts reporter for The Pantagraph.