Ex-Teamsters boss to plead guilty to gambling charges

Tuesday, May 16, 2000 | 8:28 a.m.

But on Monday, Neal filed a guilty plea agreement in U.S. District Court, admitting the machines were part of an illegal gambling business that he and his wife, Cleo, operated in Muncie.

Both Neals were expected to enter formal guilty pleas today.

Under the plea deals filed in court, Neal, 62, agreed to a sentence of 3 1/2 years in prison and a fine of $265,000. His wife agreed to a sentence of 12 months and one day.

Neal is pleading guilty to one count of money laundering, one count of conspiring to defraud the Internal Revenue Service and one count of operating an illegal gambling business. His 62-year-old wife is pleading guilty to one count of conspiring to defraud the IRS and one count of operating an illegal gambling business.

In exchange for the plea agreements, the U.S. attorney's office will drop related charges of tax evasion, conspiracy to commit money laundering and money laundering to promote illegal gambling.

John Neal also has agreed to pay $200,000 to the IRS.

Charges allege the Neals earned $3.3 million from 1992 to 1995 and never paid taxes on that income because they never reported it.

The plea agreement also calls for the Randolph County prosecutor to dismiss all gambling-related counts filed against the Neals in the mid-1990s.

The Neals operate Video Service in Muncie, which distributes video amusement devices. Some of those devices are called video gambling machines because they are games of chance, such as poker, in which people can lose or win money.

Neal had been charged with 10 gambling-related counts in Madison County, when video machines he supposedly owned were seized from a tavern in 1992.

In 1996, federal agents searched the Neals' home and business and discovered and seized $957,000 in cash.

In the plea agreements, the Neals agreed to withdraw their claims for that money and allow the government to keep it under forfeiture law. The government, in exchange, agreed to release liens on Neals' property.

In 1996, Neal resigned as president of both the Indiana Conference of Teamsters and Teamsters Local 135 in Indianapolis. He then went to trial on the charges in Madison County and was acquitted of all counts by a jury.