A North Webster couple has filed a lawsuit claiming malicious prosecution, conversion, spoilation of evidence, slander, conspiracy, conversion and abuse of process in connection with their arrest and the subsequent dismissal of charges against them.

Richard and Janet Orban, represented by attorneys from the Indianapolis law firm Ice Miller and the Fort Wayne law firm Haller and Colvin, filed the suit June 13 in Marion Circuit Court.

They claim their civil rights have been violated under Fourth and Fourteenth Amendments to the U.S. Constitution.

The Fourth Amendment guards against unreasonable search and seizure. The Fourteenth Amendment provides that the state can't deprive anyone of "life, liberty or property without due process of law."

Named as defendants are the state of Indiana; the Indiana Department of Revenue; the city of Warsaw; R. Paul Schmitt, then a detective sergeant with the Warsaw Police Department; Rick M. Albrecht, special agent, Criminal Investigation Division, Indiana Department of Revenue; and David A. Melching and D.A. Melching and Associates Inc.

The suit alleges false statements were made to the Kosciusko County prosecutor to induce him to file charges, resulting in the Orbans' arrests.

The suit also alleges the defendants withheld, covered up and destroyed evidence that could have cleared the Orbans.

The case results from business dealings at Carpet Express, 474 W. Levi Lee Road, co-owned by Richard Orban and David Melching. The suit claims the business was liquidated and many of its assets were converted by Melching.

While not mentioning a specific dollar amount, the lawsuit seeks "compensatory and punitive damages, treble damages, attorney fees and costs and all other appropriate relief."

The Orbans claim the defendants falsely and maliciously conspired to cause criminal charges to be brought against them.

The lawsuit alleges individual defendants did this knowing the charges had no reasonable basis. Encouraged by Melching, "Schmitt and other representatives of the Warsaw Police Department and the Indiana State Police extensively searched the business and personal property of the Orbans, seizing most of the records and property needed to run their business, effectively destroying it all for the private benefit of Melching," the suit claims.

The individual defendants either destroyed, lost, altered or simply cannot account for a substantial amount of the property seized, the suit states.

The Kosciusko Superior Court suppressed the results of all searches because of the actions of the defendants. Charges against the Orbans were dismissed Jan. 5 in Kosciusko Circuit Court.

The history of the Orbans' association with Melching is outlined in the suit.

From mid-1997 through Dec. 31, 1998, D.A. Melching and Associates Inc. operated Carpet Express. Carpet Express shared office and retail space with D.A. Melching and Associates Inc., general contractors.

Melching and Orban entered into a partnership, Carpet Express LLP. Orban assumed responsibility for operating the business as managing partner. Janet Orban was bookkeeper initially as an employee of D.A. Melching and Associates Inc. and later as an employee of Carpet Express LLP.

The suit claims Carpet Express LLP had more than $1 million in sales during 1998, that cash receipts were kept in Carpet Express LLP offices and that employees, including Melching, has access to the receipts.

In early 1999 Melching and D.A. Melching and Associates Inc. were suffering financial difficulties and Melching was required to pay cash for further carpet purchases from Carpet Express, the suit claims.

The suit also claims that by June 1999, D.A. Melching and Associates Inc. owed Carpet Express $20,000.

At about this time, Melching removed cash from the offices of Carpet Express LLP on several occasions for his personal use and benefit, the lawsuit states.

When Richard and Janet Orban discovered the misappropriations, Richard Orban allegedly confronted Melching and Melching admitted taking cash for his personal use.

As a result, the Orbans decided to terminate the Carpet Express LLP partnership agreement and open their own retail carpet business, and Orban threatened to report Melching to police unless the funds were returned, the lawsuit claims.

Melching then approached the Kosciusko County prosecutor and leveled "false and baseless accusations" against the Orbans, according to the suit. Based on Melching's testimony, law enforcement authorities obtained a search warrant for the personal residence of Richard and Janet Orban and for the business premises of Carpet Express LLP.

Schmitt and other law enforcement officers executed the search warrants June 17, 1999. Along with other items, two computers, one from the Orbans' residence and one from Carpet Express LLP, were removed.

The suit claims that at some time before July 13, 1999, Schmitt turned over the two seized computers to Melching. Melching also received property seized from the Orban residence.

At some point special agent Albrecht of the Indiana Department of Revenue joined the investigation at Schmitt's invitation, the suit alleges.

The suit also claims that neither Albrecht nor Schmitt inventoried the files and data on the computers before turning them over to Melching.

Among items delivered to Melching were the two computers containing the books and records of Carpet Express LLP in electronic form and the personal records of the plaintiffs. The lawsuit claims the business computers of Carpet Express LLP contained important evidence essential to the Orbans' defense.

No seized property, including personal property, was ever returned to the Orbans, although it was ordered by the court, the suit says.

A computer-generated "Sales by Customer Summary," prepared by a D.A. Melching employee after the computers were returned to Melching, was used by Albrecht and Schmitt to prepare their case report and affidavit.

On Oct 14, 1999, the Kosciusko County prosecutor filed multiple felony charges against the Orbans and they were arrested.

The Orbans were charged with corrupt business influence, money laundering, perjury, three counts of theft, two counts of failure to remit sales tax, filing a false income tax return, keeping two sets of books and fraud. All of the charges were filed as felonies.

But following a hearing on Oct. 31, 2000, Kosciusko Circuit Court Judge Rex Reed ordered "any and all of the items seized by that State of Indiana under search warrants issued by this court ... shall be and is hereby ordered suppressed ..."

Reed noted:

"It is abundantly clear to the Court that the State wholly failed to properly account for the items seized under the Court's search warrants, and additionally, has little or no idea where many of the items seized are located presently.

"To be sure, the State has argued that it has kept secure those items which it deems necessary for the prosecution of the case, however, even the casual observer would note that the Defendants are at a substantial disadvantage not only not having the items returned to them that were taken from them, but to have available to them all the seized items for review and for potentially exculpatory purposes.

"The handling by the State of Indiana of the items legally seized under the search warrants is such that the Defendants cannot be reasonably expected to defend themselves by reliance upon the possible exculpatory items that may have been contained amongst the items seized by the State and disposed of without notice to the Defendants or without order of the Court."

All charges against the Orbans were dismissed on Jan. 5. [[In-content Ad]]