LOUISVILLE, Ky. (WDRB) -- A former Bullitt County official, who for years has been accused of stealing hundreds of thousands of dollars from the beneficiaries of estates he was managing, was indicted by a federal grand jury in Louisville on charges of committing wire and bank fraud.
John Schmidt, a former Bullitt County master commissioner and county public administrator, "devised a scheme to defraud and obtain money" from two separate trusts between September 2014 and January 2019 to use for his own personal expenditures, according to the indictment.
A master commissioner assists circuit courts, in part, by conducting sales of foreclosed property to satisfy liens, mortgages or claims of ownership.
The grand jury indicted him May 2 on one count of wire fraud and two counts of bank fraud, according to a news release from the U.S. Attorney’s office. He faces up to 80 years in prison.
He pleaded not guilty at his arraignment Wednesday. Attorneys for Schmidt declined to comment.
On Monday, Schmidt was arrested by Hillview police on state charges of abuse of public trust and theft.
A court hearing is scheduled for June.
Schmidt was appointed as the Bullitt County master commissioner in 1992.
Numerous state audits documented missing money -- $67,000 in 2005, for example – while a 2011 audit included an agreement that Schmidt would reimburse $52,000 to the master commissioner account, a recent WDRB investigation found.
Schmidt was quietly removed from his court-appointed position in 2019. Since then, two lawsuits filed in Bullitt Circuit Court claim he stole more than $400,000 from estates he was managing. One of those cases settled, but the details are not public.
For decades, Schmidt “was lining his own pockets with money that belonged either to his clients or the state of Kentucky,” said attorney Laura Landenwhich, who represents the beneficiaries of the estate of Leo Gaston, a Shepherdsville furniture store owner who died in 1990.
From 2014 to 2019, Schmidt stole varying amounts from the Gaston estate, while concealing bank records from the family, she previously told WDRB. Checks were made out to Schmidt or his law firm, according to records in the lawsuit.
And in 2021, a state commission that oversees court conduct found that Schmidt was guilty of misconduct and had misappropriated $81,000 in proceeds from a foreclosed property.
The litany of audits and other findings raised questions about why Schmidt hadn’t faced criminal charges or how he kept a job controlling state funds for decades.
The FBI is continuing to investigate.
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