Former drainage district officials indicted, accused of scheme that cost $2.6 million

FRANKLIN – A former Morgan City-area drainage district employee has been indicted on charges that he directed millions of dollars in district business to his welding company, failed to do enough work to justify the money and gave some of the proceeds to the district board’s ex-chairman.

Peter Businelle, 68, of Morgan City, was indicted on three counts. He is a former maintenance supervisor for St. Mary Consolidated Gravity Drainage District No. 2 and does business as PAB Welding.

Businelle and former district board Chairman Carl Kraemer were indicted Monday by a St. Mary Parish grand jury. Prosecutor Brett D. Sandifer handled the grand jury presentation for the Louisiana Attorney General’s Office.

The 16th Judicial District Attorney’s Office turned the investigation over to the attorney general in May, citing a potential conflict involving a district attorney’s employee who is also a former drainage district board member.

The district operates nine pump stations, seven of them inside the Morgan City limits, and is in charge of other drainage infrastructure. The drainage district supported by property taxes paid by district residents and businesses.

The District Attorney’s Office set the investigation in motion when it wrote to Legislative Auditor Daryl Pupera, saying the office had received information that an independent contractor may have misappropriated district funds.

The result was a May audit report that accused Businelle of acquiring district business worth about $2.6 million for PAB Welding between 2009 and 2013, when he was a supervisor for the drainage district. Businelle was also accused of paying nearly $43,000 to Carl Kraemer, who chaired the drainage district’s board.

The audit report also found evidence that more than $10,000 worth of equipment had been purchased with district funds and could not be found.

The drainage district board has since been reconstituted with new membership. The district is working on ambitious plans to upgrade the pump stations and participate in levee improvements in Morgan City. It successfully sought a property tax renewal last spring.

The one-count indictment against Kraemer accuses him of “prohibited splitting of profits, fees, commissions” from April 2012 to March 2013. He’s accused of accepting, as a public official, something of value derived from an agreement or contract to which the state or a governmental subdivision is a party.

The charge carries a possible fine of $10,000 and up to 10 years in prison with or without hard labor.

Businelle faces three counts, including a count of “prohibited splitting of profits, fees, commissions” stemming from payments to Kraemer.

The second count accuses Businelle of public payroll fraud. The indictment says that between January 2012 and November 2013, he received money for work he either didn’t perform or performed in a “grossly inadequate” way.

Public payroll fraud carries a fine of up to $1,000 and two years in prison with or without hard labor, plus the possibility of restitution.

The third count against Businelle alleges public contract fraud. The count says that between January 2012 and November 2013, Businelle used his position as a public official or employee “to secure expenditures of public funds to himself, or to any partnership of which he is a member, or to any corporation in which he is an officer, stockholder or director.”

Public contract fraud carries a fine of up to $1,000 and up to two years in prison, with or without hard labor, plus the possibility of restitution.

When the audit report was released in May, Businelle told The Daily Review that everything he did for the district went before the board before he received any money. Businelle retired from his drainage district post about two years ago.

An indictment is not a conviction. An indictment means that a grand jury has found sufficient evidence, in the absence of a defense, to warrant a trial on the charges alleged.