Mary Cossey, former executive director of the Gary Housing Authority and confidant of former Gary Mayor Karen Freeman-Wilson, pleaded guilty Tuesday to one of three counts of wire fraud stemming from a Chapter 13 bankruptcy filing, according to court documents.
Cossey, 55, entered the please before U.S. District Court Judge Philip P. Simon, according to action U.S. Attorney Tina L. Nommay. Sentencing currently is scheduled Jan. 13.
Cossey was indicted on three counts of wire fraud in August 2020 related to her bankruptcy petition following an investigation by the FBI and IRS in collaboration with the Northern Indiana Bankruptcy Fraud Working Group coordinated by the U.S. Trustee for Region 10. Thomas Kirsch II, now a federal appeals court judge, was U.S. Attorney for the Northern District of Indiana at the time of the indictment.
In exchange for pleading guilty to one count of wire fraud, Cossey is seeking a reduced sentence with home confinement and probation instead of jail. Prior to any sentencing reductions due to the agreement, Cossey is facing up to 20 years in prison, $250,000 in restitution and three years of probation. As part of the plea deal resolving the case, Cossey has agreed to pay approximately $81,160 in restitution.
Attorney Scott King, who represented Cossey in the case, said Tuesday he disagreed with Cossey being in this position in the first place, but the government ultimately made a reasoned and reasonable proposal Cossey elected to take to avoid trail.
“This whole thing began out of a completely unrelated investigation, that, with respect to Ms. Cossey, did not bear any fruit,” King said, adding it was a very confusing array of what was filed and what was not filed during the bankruptcy.
At the end of the day, King said, a joint decision was made in her best interest.
In the agreement, Cossey said she filed a voluntary petition for Chapter 13 bankruptcy and during the course of that bankruptcy case from December 2013 to January 2019, she engaged in a scheme to defraud the Chapter 13 trustee and her creditors.
“The purposes of my scheme were to prevent foreclosure on my residence, to eliminate and discharge debts, and to divert funds from my bankruptcy estate for my benefit and the benefit of one of one of my creditors,” Cossey admitted in the plea deal document.
In the document, Cossey admitted she did not disclose in her bankruptcy petition her personal debt relationship with the person identified in the August 2020 indictment as “Individual A.” Cossey was an authorized user on Individual A’s American Express credit card. In the original complaint filed in August, it was alleged during the time frame under investigation Cossey also was paid from the campaign fund of Individual A for work performed for the Gary New Day Foundation.
“I used individual A’s credit card account for my personal use and was require to repay all charges incurred to Individual A,” according to court documents.
Cossey admits not disclosing she made about $43,000 in debt payments to Individual A in the year prior to filing bankruptcy. She also admits accruing $240,000 in personal debt on that American Express credit card between January 2014 and December 2018, during which time she also repaid about $200,000 of that amount.
“I also incurred other debts and loans without the permission of the Chapter 13 Trustee,” Cossey admitted in the court documents.
According to the plea deal, Cossey deposited $5,200 in cash into Individual A’s bank account to pay the American Express bill, which was paid by wire transfer by Individual A.
Carrie Napoleon is a freelance reporter for the Post-Tribune.
