JUDGE WANTS BANKING RECORDS IN FORFEITURE PROBE

MUNCIE -- Judge Richard Dailey wants records reflecting all deposits
and withdrawals -- and copies of cashed checks -- from a First
Merchants Bank account that contained funds confiscated from accused
drug dealers by the Muncie-Delaware County Drug Task Force and the
county prosecutor's office.

The Delaware Circuit Court 2 judge on Friday issued court orders for
those banking records, along with those of two city government
accounts and tax forms reflecting payments to Delaware County
Prosecutor Mark McKinney, Deputy Prosecutor Eric Hoffman and former
Deputy Prosecutor Louis Denney, who filed the civil lawsuits that led
to the forfeitures.

Dailey -- who in recent weeks has conducted a series of hearings on
what the judge referred to in Friday's orders as "allegations of fraud
upon the court in civil drug forfeiture cases" -- also issued an order
for "all information" on federal grants that city government, the DTF
and the county sheriff's department "used for drug interdiction or
enforcement, in Muncie, Ind., from 1996 to present..."

In one of Friday's orders, Dailey wrote that McKinney had "repeatedly
asserted to this court that he may enter into confidential agreements
and dispose of drug forfeiture funds without court
adjudication..."

The judge wrote that through his own investigation he had determined
that grants from the U.S. Department of Justice required that all
forfeitures "must first be adjudicated in state courts."

In ordering that he be given copies of the banking and tax records,
Dailey also noted testimony that McKinney last year received a
personal check for $8,413 from an auctioneer who had sold property
seized from suspected drug dealers, and that a tax form reflects the
city in 2007 paid the prosecutor more than $5,000, also in drug
forfeiture funds.

Mayor Sharon McShurley recently filed a complaint against McKinney
with the Indiana Supreme Court's disciplinary commission, alleging
that forfeiture funds hadn't been deposited in the city's general fund
as required under state law.

Contacted Friday, Dailey said he would likely hold another
forfeiture-related hearing next week.

McKinney's attorney, Kevin McGoff of Indianapolis, could not be
reached for comment Friday.