At Hearing, Beshara Admits to $20K Payment to Bozanich

YOUNGSTOWN, Ohio – The former president of B&B Contractors & Developers Inc., Phillip M. Beshara, testified Friday in Mahoning County Common Pleas Court that he gave $20,000 to former Youngstown Finance Director David Bozanich in 2009.

The admission – made before Beshara was advised not to provide further potentially incriminating information – punctuated the morning-long pretrial hearing related to the 101-count indictment stemming from an investigation into alleged misuse of public funds by developer Dominic Marchionda.

Around noon, Mahoning County Common Pleas Judge Maureen Sweeney ended the hearing for the day after ordering prosecutors to provide additional information regarding the timeline of between 80 and 100 meals allegedly purchased for Bozanich by Ray Briya, former chief financial officer for MS Consultants, to influence city business in favor of his company.

Sweeney is considering defense motions to dismiss charges and exclude evidence based on statute of limitations and attorney-client privilege violations.

Beshara, who was the first person to take the stand Friday morning during the hearing, said he has known Bozanich for 40 years. He has known Marchionda for about 25 years and his company worked on Marchionda’s Flats at Wick and Erie Terminal projects.

He acknowledged under questioning by Dan Kasaris, special prosecuting attorney with the Ohio Attorney General’s office, that he gave $20,000 to Bozanich at a Boardman restaurant in spring 2009.

The cash was “personal funds from gambling,” he said. He did not tell anybody about the payment to Bozanich until he disclosed that information to Wally Sines, an agent with the Federal Bureau of Investigation, in November 2016. He later shared that information with Kasaris and with Chris Rudy, a fraud investigator with the Ohio Auditor’s office.

Attorney Ralph Cascarilla, representing Bozanich, asked Beshara under cross-examination if he was under investigation for criminal conduct, specifically regarding funds he took from his former company.

Dan Kasaris, special prosecuting attorney with the Ohio Attorney General’s office.

As the line of questioning continued, Sweeney asked Beshara’s attorney, Jim Gentile, if he was comfortable with his client’s testimony. When he responded that he wasn’t, Sweeney took a break to speak with the attorneys.

Cascarilla subsequently asked whether Beshara had a deal in place that protected him from prosecution. He responded that he had a proffer, but was “not 100% sure” what it covered.

As the questioning continued, Sweeney declared from the bench that she was not going to permit a witness to provide information that would be used against him in another proceeding during a motion-to-suppress hearing and ordered his testimony stricken from the court record. He could be recalled if the state presents supplemental information indicating he will not be prosecuted for his testimony.

Kasaris then called Rudy to the stand. Rudy, who retired last year after a 41-year career in law enforcement, said he first became involved with investigating Marchionda following an interview with a confidential informant. After that, he began requisition records from the auditor’s office and the city, and subpoenaed multiple bank account records, city ordinances and Marchionda’s records.

Rudy said the change in the purchase price for a now-closed fire station on the North Side from $10 to $1 million – a deal tying into the awarding of a $1.2 million water grant to assist Marchionda’s Flats at Wick Project – “grabbed [his] attention.”

During his investigation, Rudy said he entered into several tolling agreements, which are used to waive the right to claim that litigation should be dismissed because the statute of limitations has expired. During the second of those agreements, the scope of the investigation broadened into Marchionda’s Wick Tower and Erie Terminal projects.

Under questioning by Kasaris, Rudy also testified about his investigation into Marchionda’s alleged use of the Par Golf account – reserved for money raised for an autism charity golf outing – to purchase jewelry.

Chris Rudy, fraud investigator with the Ohio Auditor’s office

Much of the questioning by Marchionda’s attorney, John McCaffrey, of Rudy focused on attorney-client privilege issues related to documents and other materials seized by investigators.

Rudy acknowledged that no privilege review team was on hand when search warrants were executed on Marchionda to ensure that none of the materials seized violate attorney-client privilege. Similarly, no such team was in place for the execution of warrants related to Bozanich or attorney Steve Garea, who represented Marchionda and entities affiliated with him.

The materials seized from Garea’s home and office – which include files on digital media – have been copied but not searched yet, pending completion of the taint review process, over concerns that such materials may be potentially privileged, Rudy said. The same is true for materials seized from Marchionda, he said.

During his examination of Rudy, McCaffrey also seized on a December 2017 proffer meeting with Garea. During the meeting, according to transcripts McCaffrey cited, Rudy encouraged Garea to “come forward” with information and said prosecutors “weren’t going to charge you with anything.”

None of the representatives from the attorney general’s office in the room raised any concerns that the discussion might be entering into areas of attorney-client privilege, or to Rudy’s attempt to encourage Garea’s cooperation. The state is holding off on its decision on whether to charge Garea until after he testifies in Bozanich and Marchionda’s trials.

“I wasn’t speaking for everybody in the room,” Rudy said, but also acknowledged that no one corrected him.

Attorneys John McCaffrey and Adrienne Kirshner with Dominic Marchionda and David Bozanich.

Asked by Cascarilla what specific acts Bozanich committed, Rudy said Bozanich put MS “at the top of the list” for contracts. As finance director, Bozanich was one of three members of the city’s board of control, which approves city contracts, some of which are bid and some that aren’t. City Council also plays a role in the contracting process.

When Cascarilla attempted to get prosecutors to give specific dates for when the meals Briya allegedly bought for Bozanich in return for his services took place, Kasaris objected – as he had in response to other questions during the hearing – that the information had nothing to do with the statute of limitations issue.

Sweeney overruled the objection and, following further questioning along these lines, ordered the prosecution to provide dates for when the meals took place by Monday, when the hearing would resume, before closing the hearing for the day.

Both Garea and Briya are expected to testify at Monday’s hearing as well.

The hearing began Thursday with testimony regarding the sale of a municipal fire station to Marchionda, a transaction in which the sale price went from $10 to $1 million, enabling the city to concurrently grant the developer $1.2 million in water department funds.

Marchionda and Bozanich are scheduled to go on trial June 1.

Pictured above: Dominic Marchionda and David Bozanich at Friday’s pretrial hearing Mahoning County Common Pleas Court.

RELATED:
Sept. 10, 2019: Briya Pleads Guilty, Will Repay MS Consultants $200K
Oct. 5, 2018: B&B Amends Fraud Complaint Against Former President
Aug. 30, 2018: Sammarone, Bozanich Indicted in Marchionda Probe
Dec. 29, 2017: Prosecutors Add Details in Marchionda Case

Copyright 2020 The Business Journal, Youngstown, Ohio.