Former CFO of MS Takes Stand in Corruption Hearing; Judge to Rule on Motions
YOUNGSTOWN, Ohio – Mahoning County Common Pleas Judge Maureen Sweeney is expected to rule by Feb. 21 on motions to dismiss charges in the 101-count indictment of Dominic Marchionda and David Bozanich.
At the conclusion of a pretrial hearing Wednesday, Sweeney told prosecution and defense attorneys to submit their final filings by Feb. 19, including a second amended bill of particular, so that she can rule before a hearing on motions two days later in the related case of former Youngstown Mayor Charles Sammarone.
Sweeney is considering motions to reduce or dismiss charges based on attorney-client privilege and statute of limitations violations as well as duplicity.
Three witnesses took the stand during Wednesday’s hearing, including Raymond Briya, former chief financial officer for MS Consultants. Briya pleaded guilty in September to a five-count bill of information. Returning to testify for follow-up questioning were Phillip M. Beshara, former president of B&B Contractors & Developers Inc., and Chris Rudy, a retired fraud investigator with the Ohio Auditor’s office.
Briya, appearing for the first time during the hearing, testified for about two hours Wednesday. He said he has known Bozanich, Youngstown’s former finance director, for about 30 years, becoming acquainted with him when he was assistant finance director. They also socialized, played golf about three times a year and took vacations with their spouses about eight times.
Briya, who pleaded guilty in September to a five-count bill of information, acknowledged under questioning by Ralph Cascarilla, Bozanich’s attorney, that he had an agreement with the state that he would not be prosecuted under terms of the plea agreement.
According to Briya, Bozanich received $100,000 from Exal Leasing Corp. Inc., which was formed in 1993 by Briya, Tom Syrakis and individuals from B&B, including Beshara.
Delfine Gilbert, owner of Exal Corp., an aluminum container manufacturer, wanted to locate his company in Youngstown but didn’t have the money for the site where he wanted to build the factory. Exal Leasing’s principals formed the leasing company and borrowed money to develop the site, including a $1.7 million loan from the city, with the promise that Gilbert could purchase the building in five years, Briya said.
Briya’s share of the proceeds from the subsequent sale was more than $765,000.
Before Exal Corp. purchasing the building from Exal Leasing in 2001, Bozanich reminded Briya about the $100,000 he was supposed to receive but would not ask for the money until five years later.
“He wasn’t ready for it yet,” Briya said.
The money was paid to Bozanich in four installments beginning in 2006 through invoices to MS Consultants from Village Traveler, a travel agency in which Bozanich had an interest. At one point in time, Briya said he received $45,000 of the money back from Bozanich.
“There was an investigation going on, and he thought it best to send it back,” Briya said.
Briya additionally testified about golf outings he and Bozanich attended. When they participated in member guest outings at golf and country clubs, MS would pay the fee, Briya said. Bozanich would then write a check to MS to pay for his share of the event but Briya would reimburse the city official from money for work expenses he claimed from his company.
Although he and Marchionda were “very good friends” and have known each other for about 25 years, the Flats at Wick student housing project that Marchionda developed represented the first opportunity for MS to have a “business relationship” with Marchionda, Briya said. The company entered into an agreement for professional services in 2008.
Briya testified about $105,000 in payments for work MS Consultants performed on the Flats at Wick that was instead applied to an invoice for Marchionda’s renovation of the Erie Terminal Building downtown.
In addition, Briya said he forgave some money Marchionda owed MS because Marchionda “didn’t have the money to pay.”
Under questioning by John McCaffrey, an attorney representing Marchionda and several related entities, Briya acknowledged MS consultants was wiling to write off “bad debt” on the Flats at Wick project because future phases of the project were planned.
“You understood that there were phases two, three and four that could be potential business for MS Consultants,” McCaffrey said.
Beshara, who testified in January that he paid a $20,000 bribe to Bozanich at a Boardman restaurant in 2009, said Wednesday that incident was the first time he paid a bribe to a public official.
The bribe came at the request of attorney Steve Garea, who represented Marchionda at the time. Garea told Beshara they had to “take care of Dave” for his role in helping to facilitate a $1.2 million grant for Marchionda’s Flats at Wick student housing project.
Beshara looked at Bozanich as “more of a friend than a city official,” he testified. The two had drinks at the restaurant’s bar before Beshara gave Bozanich the envelope containing the cash, which he said he took from gambling winnings he kept at his house.
Beshara further testified under questioning that he extorted kickbacks from companies including Komar Plumbing and D&G Mechanical. He would tell the contractors that after they won bids he was looking for money from them. The level of money he sought from contractors depended on his financial condition and he did not have a particular guideline for what he requested, he said.
Copyright 2022 The Business Journal, Youngstown, Ohio.