The jury deliberated for less than three hours.
Mayor George Pabey was accused of using city money and workers to remodel and renovate a home he owns in Gary, Indiana.
His co-defendant, Jose Camacho, an employee of the city's engineering department was found guilty of conspiracy and theft. Camacho was acquitted on two counts of witness tampering.
Both were released on bond. Each faces up to 15 years in prison.