Update: City Seeks Recovery of $834K from Marchionda, Bozanich
Editor’s note: this story has been updated to include comments from Dominic Marchionda.
YOUNGSTOWN, Ohio – The city has filed a complaint against developer Dominic Marchionda, two of his companies and former city Finance Director David Bozanich, seeking recovery of $834,608 related to a public corruption case that ended in plea agreements more than four years ago.
The city filed the lawsuit Thursday in Mahoning County Common Pleas Court. Bozanich, Marchionda, US Campus Suites LLC and Erie Terminal Place LLC are named as defendants in the matter. The case is assigned to Judge Anthony D’Apolito.
At the core of the lawsuit is a public corruption case from 2018 that involved development projects beginning 15 years ago. The case centered on the misappropriation of water and wastewater grant money intended for several development projects, including the Flats at Wick and redevelopment of the Erie Terminal, downtown.
Marchionda, in a statement emailed late Friday, stated: “In regard to the curious timing of the city’s lawsuit, we intend to defend our company with the greatest respect to the legal process; a process that has already been exhausted against these entities and myself over a decade ago,” he said. “It is our position that the current filing against our companies is redundant and retaliatory. We will provide more context and comments to the filing in the coming days and intend to counter the one-sided nature of the findings, of which we vehemently disagree and have the necessary documentation to disprove such findings.”
In 2009, Marchionda and his company, US Campus Suites, was in the process of building the Flats at Wick, a housing complex on the corner of Madison Avenue and Elm Street for students attending Youngstown State University. The city supported the project through a $1.2 million water/wastewater grant. Marchionda received the grant and used that money to purchase a fire station at the corner from the city for $1 million, and the money was deposited in the general fund. Marchionda kept the additional $200,000 for the project.
The city also spent another $3,220 in closing costs to complete the transaction, the complaint says.
According to the city’s lawsuit, the use of a wastewater grant to purchase the fire station was a “calculated scheme, facilitated by US Campus Suites and orchestrated by Dominic Marchionda and David Bozanich, to illegally transfer money from the city’s water fund and wastewater fund to the city’s general fund” in violation of state law.
“Upon information and belief, bribes were paid to Bozanich for his participation in the scheme,” the lawsuit alleges.
The city is seeking $614,608 – plus costs and interest beginning Sept. 23, 2021 – from Marchionda, US Campus Suites and Bozanich related to the Flats at Wick project, citing a public interest report issued by Ohio Auditor of State Keith Faber that details findings for recovery, according to court papers.
The amount reflects the appraised value of the fire station, $411,388; $3,220 in closing costs; $100,000 from the city’s wastewater fund; and another $100,000 from the city’s water fund, according to the lawsuit.
A $100,000 bond payment to the city by The Hartford has partially satisfied the amount sought by the city, the lawsuit says, and would be subtracted from the amount sought by the city.
The city also seeks another $220,000, plus costs and interest, from Erie Terminal Place and Marchionda, citing the state auditor’s finding for recovery, which is attached as an exhibit. The amount reflects a supplemental grant awarded the project from the city’s water and wastewater funds that was unlawfully paid, the lawsuit alleges.
“Erie Terminal Place and Dominic Marchionda misled the city about the completion status of the Erie Terminal project to induce the city to issue the second Erie Terminal grant,” which was used for purposes beyond those stipulated in the second grant agreement.
In August 2018, Bozanich, former Mayor Charles Sammarone and Marchionda were indicted on 101 counts of public corruption offenses. Sammarone eventually pleaded to two counts of tampering with records and received five years’ probation.
In August 2020, Bozanich – who served as city finance director from 1993 to 2017 – pleaded guilty to one count each of records tampering and bribery, both felonies, and two misdemeanor charges of unlawful compensation of a public official. Bozanich served nearly one year in prison.
That same day, Marchionda pleaded guilty to four counts of tampering with records, all felonies, for creating false invoices to secure city grant money he said would be used for the Erie Terminal redevelopment project. Instead, the funds were used to pay invoices for the Flats at Wick development. He received five years’ probation.
Marchionda’s company, US Campus Suites, pleaded guilty to one count of receiving stolen property, while criminal charges were dismissed against Erie Terminal Place.
Pictured at top: Dominic Marchionda and David Bozanich.
Copyright 2024 The Business Journal, Youngstown, Ohio.
