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Federal Investigation, Prosecution Targets Indiana Sheriff’s Officers

Several Lake County, Indiana Sheriff’s Department employees were the subject of a federal investigation into a gun-running scheme that resulted in criminal charges.

Lake County Sheriff John Buncich placed six staff members on administrative leave and stripped them of their law enforcement powers in May 2011 after they were served with subpoenas in the investigation. Those employees were Lt. Michael Reilly, Sgt. Joseph R. Kumstar, Capt. Marco Kuyachich and officers Ronald D. Slusser, Edward O. Kabella and Scott Shelhart.

The federal investigation culminated in the September 23, 2011 indictments of Kumstar, Kabella and Slusser on charges that they used their positions with the Sheriff’s Department to buy and sell fully automatic machine guns for personal profit. Kumstar was a former deputy chief, while Slusser was a SWAT officer; both Slusser and Kabella had federal firearms licenses. All three were charged with conspiring to provide false information to a federal firearms licensee, conspiring to defraud an agency of the United States and making false statements under oath on a tax return.

Kumstar, Kabella and Slusser were accused of ordering dozens of machine guns and laser sights from firearms manufacturers, such as H&K, by claiming they were for law enforcement use by the Sheriff’s Department. Instead, they sold parts from the guns online for tens of thousands of dollars. Although Kumstar, Kabella and Slusser used county letterhead and purchase orders to obtain the weapons, they apparently paid for them using their own funds.

Kuyachich stated in a letter to the Sheriff’s Department that he was subpoenaed as a witness in the investigation, not as a suspect. Shelhart was cleared and reinstated to active duty in October 2011.

Kumstar, Kabella and Slusser agreed to plead guilty to the federal charges in September and October 2011, and resigned. They have not yet been sentenced. See: United States v. Kabella, U.S.D.C. (N.D. Ind.), Case No 2:11-cr-00134-JVB-PRC. The federal investigation included the FBI, IRS, ATF, Department of Defense and the FDA, which regulates laser devices.

It was initially thought the investigation involved the Sheriff’s Department’s discretionary fund, which might have been used to buy the weapons in the gun-running scheme. Under Indiana state law, a sheriff has sole discretion on how to spend profits from jail commissary and telephone funds, though he is required to submit reports regarding the fund to the county council twice per year.

According to former councilman and county financial consultant Larry Blachard, the Lake County Sheriff’s Department has not complied with the law. “We never received any reports. I can’t really say what was purchased was good or bad because I really don’t know. When I was on the council, my own feelings were that they were tax dollars.... The majority of council [members] thought the law should be changed a little, so there’s some oversight by the fiscal body.”

Lt. Reilly and Sgt. Kumstar were reportedly in charge of discretionary fund audits that were criticized by the State Board of Auditors. State audits dating back to 2004 cited the department’s failure to provide accurate statements for the discretionary fund. In 2009, the auditors noted that “No individual in the Sheriff’s Department appears to have the responsibility of monitoring the fiscal activity or record keeping for the Sheriff’s Department.” However, there was no evidence that the discretionary fund was used to purchase the guns that Kumstar, Kabella and Slusser bought and sold.

Accountability problems with the Lake County Sheriff’s Department’s discretionary fund are apparently longstanding. During his previous term as sheriff in the 1990s, Sheriff Buncich was criticized for spending jail commissary funds on everything from steak dinners to conferences in Miami and Las Vegas.


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