B&B Amends Fraud Complaint Against Former President
YOUNGSTOWN, Ohio – Attorneys representing B&B Contractors and Developers Inc. have filed an amended complaint in a civil case alleging the former president of the company, the company’s former controller and its ex-corporate counsel stole millions of dollars from B&B.
Last year, the company filed a complaint alleging that former president Philip Beshara, attorney Stephen Garea and B&B’s ex-controller, Samuel DeCaria, perpetuated schemes to defraud B&B of between $2.5 million and $3.5 million.
The amended complaint was filed in response to a court order issued earlier that dismissed theft allegations against Garea, since the complaint also alleges malpractice.
Under Ohio law, an attorney cannot be charged with both malpractice and a tort while acting in the official capacity of their client. The initial complaint did not make that clear, according to the court.
However, the court left open the opportunity for B&B to file an amended complaint. Attorneys did so yesterday, arguing that Garea was not acting in his capacity as B&B’s corporate counsel when the alleged theft occurred.
“This clarifies what status he held when he committed the various acts,” said Martin Desmond, one of the attorneys representing B&B in the case. “There were certain acts in which he was acting as B&B’s counsel, and there were certain acts where he acted on his own behalf.”
The amended complaint contains language that stipulates in the allegations of theft and tampering with records that “Garea was not acting as counsel for B&B during the commission of this offense, but rather, he was acting for his own personal gain.”
The complaint also notes that Garea failed to carry out his fiduciary duties as the company’s attorney on other matters, which is cause for a malpractice complaint.
Beshara, Garea and DeCaria are believed to be John Does 1, 2 and 3 in an indictment filed Aug. 30 that charged developer Dominic Marchionda, former Youngstown finance director David Bozanich, and former Youngstown mayor Charles Sammarone with 101 counts of public corruption.
Bozanich, Sammarone and Marchionda have all entered written pleas of not guilty.
The state alleges Beshara, or John Doe 1, paid Bozanich in 2009 a cash bribe of between $20,000 and $25,000 in return for city financial support of the Flats at Wick project, a student housing development north of Youngstown State University that Marchionda sought to build.
Garea, or John Doe 2, is alleged to have acted as an intermediary in the deal, according to court papers. Bozanich is also accused of receiving a waiver of about $10,000 in legal fees from the attorney in return for city support for the project, according to the indictment.
B&B filed a lawsuit in September 2017 against Beshara, DeCaria and Garea, alleging they conspired to steal money from the company.
The scheme involved DeCaria issuing checks to Beshara, Garea, and various unidentified business people or businesses when “no legitimate reason existed for these payments. The payments were not for any work performed and no invoices were ever submitted,” the amended complaint states.
According to the complaint, B&B entered into a business relationship with “Business Entity B” in 2009, which court papers say was initiated by Garea. That year, B&B started working with the company “for the construction of a building in Youngstown,” the complaint stated.
B&B served as the general contractor at the Flats at Wick project.
The complaint alleges that DeCaria “improperly and without authority ordered multiple checks to be issued and paid to Beshara and/or Garea.” Exhibits attached to the complaint show that $361,569.58 in checks was issued relative to Job No. 0908/0925 between Oct. 9 2009 and Sept. 10 2010.
According to court papers, $3,569 was paid directly to Beshara.
The complaint said Beshara, DeCaria and Garea acted together to defraud the company of between $2.5 million and $3.5 million.
Copyright 2020 The Business Journal, Youngstown, Ohio.