Arson and Court Date at Warren Steel

WARREN, Ohio – By noon Aug. 11, there wasn’t much left of an old brick administration building at the former Warren Steel Holdings complex in Trumbull County.

An early morning fire took out more than half of the building, its roof partially collapsed. Authorities believe the cause of the blaze was arson, set early the same morning that the state of Ohio’s case against the defunct company was set to go to trial over environmental violations.

The decrepit manufacturing site is at the center of an alleged international fraud conspiracy that federal authorities say was masterminded by powerful Eastern European oligarchs.

But none of that was on the minds of firefighters from six departments as they spent the early hours battling a blaze, an effort that was frustrated because none of the hydrants at the abandoned site worked.  Several years earlier, all utilities to the complex were cut off. 

Flames engulf a portion of an old administration building at Warren Steel. Photo by Tom Dempsey. 

“We had a huge water supply issue,” says Tom Dempsey, captain of the Champion Township Fire Department.  “There were no working hydrants, they were inoperable.  Half of the building has extensive fire damage to it.”

There was no evidence of squatters living in the long, empty building. But it was clear that the structure had been vandalized in previous years.  

“There was graffiti inside the building and a lot of broken windows,” Dempsey says.

State fire marshals are convinced it was arson. “We can confirm that we believe the fire was intentionally set,” says spokesman Brian Bohnert.  “There are no leads at this time.”

The arson is the latest in a string of unsolved issues at the Warren Steel site since the company ceased operating in January 2016, leaving a toxic wasteland filled with hazardous chemicals and contaminated soil.  

In 2016, the state of Ohio sued the company and its executives, including President and CEO Mordecai Korf, a Florida businessman, in Trumbull County Common Pleas Court, demanding Warren Steel remediate the site.

In 2019, the Ohio Environmental Protection Agency found abandoned toxic chemicals, oil pits and other hazardous materials in portions of the shuttered mill. That same year, the state won a judgment against Warren Steel for $1.1 million. The penalty remained unpaid as the case wound its way through the courts.

On the day of the arson, that day’s scheduled trial did not go forward.  

Two days earlier, the parties filed a joint motion before the court asking Judge Andrew Logan to approve and enter into a consent order that  “resolves the case in its entirety,” according to court papers.  At press time, the court had yet to approve the motion and details of the proposed settlement were unavailable. 

“We’re anxious to see this thing wind its way through and be done,” says Champion Township Trustee Doug Emerine. “It’s an eyesore and it has a huge impact on the township.”

Just over one third of the site is in Champion, near the interchange of state routes 82 and 45, while the southern section of the property sits in Warren Township. The abandoned, rusted buildings that still stand are among the first sights motorists encounter just off the Route 82 bypass entering the township.  “It’s one of the first things you see in the township – it’s an environmental hazard,” Emerine says. “It continues to be a burden on both townships.”

On June 29, Warren Steel presented four closure documents to the OEPA that detailed its plans to clean the contaminated site.

The cleanup effort is estimated to cost $878,918, according to documents filed with the regulatory agency. The bulk of this cost – $844,135 – would be used to remediate the dust bag house that served the plant’s electric arc furnace. Other costs involve the cleanup of wastewater treatment acid tanks, a melt shop water-treatment area, and a waste pile at the site, documents show.

Complicating the entire effort is that Warren Steel is entangled in what federal authorities say was an international scheme to steal billions of dollars and hide some of it in the United States.

Warren Steel Holdings was established by a partnership that included one of Eastern Europe’s most powerful oligarchs, Igor Kolomoisky, whom U.S. authorities have accused of masterminding an intricate plot to steal $5.5 billion from a Ukrainian bank he co-owned and then launder the cash through a maze of shell companies from Cyprus to the Caribbean.

More than $600 million of that money eventually ended up in the United States and was used to scoop up real estate and industrial assets across the American Midwest, the government says.

Warren Steel was among these assets. In 2001, steelmaker CSC Ltd., formerly Copperweld Steel Co., sold the mill and equipment through bankruptcy to Warren Steel Holdings. The mill was restarted in 2009 but was beset with problems from the start.

An explosion at the mill’s arc furnace in 2011 sent five workers to the hospital. Some of their injuries included burns, hearing loss, back and neck injuries, and post-traumatic stress disorder, according to documents filed in Trumbull County Common Pleas Court. An inspection by the Occupational Safety and Health Administration the day of the explosion found two serious safety violations. The company was fined $5,940, according to U.S. Department of Labor records. Between 2011 and 2014, OSHA uncovered at least 17 health and safety violations at the plant and imposed $43,482 in fines.

The federal government alleges that Kolomoisky and his related entities funneled more than $622 million in fraudulently obtained loans into U.S. interests.  Court documents show about $9 million went into Warren Steel.

Meantime, Warren Steel used the plant in 2014 as collateral to obtain $110.7 million in mortgage loans – $15 million of which was issued by Optima Acquisitions LLC, a firm controlled in part by Kolomoisky, according to the Trumbull County recorders office.  Warren Steel shut down temporarily, restarted operations briefly by the end of that year, but announced in 2015 it would shut its doors in January 2016. 

The U.S. Department of Justice has since seized office buildings owned by Kolomoisky  or his affiliated companies.  A year ago, federal agents raided the Cleveland and Miami offices of Optima Management Group, a collection of companies owned in part by Kolomoisky. In March, the U.S. State Department banned him and his immediate family from entering the United States, citing the oligarch’s role in “significant corruption.”  

For local officials, this international intrigue only muddies the attempt to fix a problem that they believe will take years to resolve.

According to data from the Trumbull County auditor, the Warren Steel site owes nearly $750,000 in real estate taxes.

“It’s a massive mess,” Champion Township’s Emerine says. “There are more expenses going out, but nothing coming in.”

At one point, the steel mill was among the most productive industrial operations in Champion, Emerine says. Today, the township and county still need to supply security and safety services to the area.

The fire on Aug. 11 underscores how the abandoned plant can sap the resources of several districts in a matter of hours. “It’s just more work – a huge amount of work with very little to show,” Emerine says.

Nevertheless, the township trustee is optimistic that some sort of accommodation can be reached soon.

“We’re just hoping to get this thing settled, the site cleaned up and get that property back to a tax-paying, income producing property,” he says. “But, as long as it’s in the courts, our hands are tied.”

Pictured at top: Firefighters exit vacant Warren Steel Holdings in Champion Township after an arson fire Aug. 11.