YOUNGSTOWN, Ohio – Garry Savage Sr., a former broker and financial advisor who once claimed he could resurrect the failed Chill Can venture, and his company, Coast to Coast Chill Inc., were sentenced Monday after pleading guilty earlier this year to multiple counts of securities fraud and theft.
Savage was sentenced to three years in prison for defrauding investors and ordered to pay $2,909,350 in restitution to the victims who invested in his company, Coast to Coast Chill Inc., according to the Ohio Department of Commerce.
Erie County Common Pleas Judge Thomas Pokorny also sentenced Savage to 18 months’ parole after his release from prison. Savage has been held in Erie County jail since August 2022 and was given credit for time served.
Savage, of Huron, Ohio, pleaded guilty Nov. 26 to 23 criminal counts related to an investment scheme for which he was previously indicted.
The scheme involved diverting investor funds from the Chill Can project to pay himself and to repay other investors, as well as to omit material facts from investors. According to the November 2021 indictment, for which Savage was extradited from Florida in May 2022, Savage sold investments to 18 Ohio investors in Coast to Coast Chill.
The funds were supposed to be invested by Coast to Coast Chill into The Joseph Co. International to build a facility in Youngstown, Ohio, to manufacture self-chilling beverage cans. According to the indictment, investors’ funds were misappropriated.
Savage pleaded guilty both individually and on behalf of his company to seven counts of securities fraud; eight counts of sales of unregistered securities; six counts of fraudulent or deceptive conduct by an investment adviser representative; and two counts of theft. All other pending counts were nullified because of the plea.
Savage’s History
The Business Journal first reported in its August 2020 edition that Savage, then a former investment broker whose license was permanently suspended in 2019 for violating securities laws, was among the early investors in the Chill Can project.
Savage and the Joseph Co. began doing business together in 2016, when Savage signed contracts where he agreed to pay $7.5 million for Chill Can rights to the Ohio territory and another $5.8 million for Florida, according to documents obtained by The Business Journal. However, the Joseph Co. sued Savage in August 2017, alleging breach of contract. The matter was settled, and terms of the settlement were not disclosed.
Yet in 2020 Savage told The Business Journal that he would “take over the whole financing part for the Joseph Co.,” insisting that he owned a stake in Youngstown and rights to a potential expansion in Florida.
Savage said at the time that his charge was to raise the money necessary to finish these projects. He said Coast to Coast spent approximately $5 million for Chill Can rights, asserting he also held royalty rights to every chill can sold worldwide.
“The money going into the Youngstown plant is mine – it’s always been mine,” he declared. He then proclaimed that he could secure additional investment to finish the Youngstown plant, start another operation near Miami, and then begin work on a third plant in Iowa.
However, Joseph Co. Chairman and CEO Mitchell Joseph told The Business Journal at the time that Savage held no financial interest in the Youngstown project, just the Florida license. “That is his only licensee relationship with the Joseph Co.,” he noted. He also emphasized the company had “zero” plans for a plant in Iowa.
Nevertheless, Savage hyped the prospects of Chill Can, boasting he had raised approximately $10 million toward the Youngstown venture. As late as February 2020, Savage asserted that investors would see royalty payments in their pockets soon, according to documents obtained by The Business Journal.
However, the project never materialized, and three empty buildings sit at the proposed campus on the city’s East Side.
Prosecutors said Savage diverted investors’ money for other purposes and neglected to inform clients that the state of Ohio and the Financial Industry Regulatory Authority, or FINRA, had by that time revoked his brokerage license for earlier violations.
According to a bill of particulars filed with the Erie County Common Pleas Court in 2022, prosecutors detailed hundreds of thousands of dollars of investors’ money that was misappropriated. Many of the investors were elderly.
Chill Can Project Unravels
Meanwhile, the city of Youngstown and the Chill Can developer became embroiled in a legal struggle that should soon be settled in early 2025.
The matter stems from more than eight years ago, when Irvine, Calif.-based M.J. Joseph Development, Joseph Co. International and Mitchell Joseph announced they would invest nearly $20 million to build a campus dedicated to research, development and manufacturing of self-chilling beverage cans and related technologies.
M.J. Joseph and the city signed agreements that awarded the developer $1.5 million in wastewater grants for the project, as well as tax breaks. In return, the developer was to create 237 jobs. The city also incurred costs related to relocating and moving residents from the 21-acre neighborhood.
Although three buildings were constructed at the site, not a single “chill can” was ever produced, and the company reported a total of just two jobs created, which was eventually reduced to one part-time position. That triggered in 2021 a lengthy legal battle between the city and M.J. Joseph.
Anticipating court action, M.J. Joseph filed a complaint in June 2021 against the city, alleging the city did not have the authority to collect monetary damages or was entitled to the land. The city countersued for $2.8 million, demanding a refund of its development grant, relocation and acquisition expenses and computed lost income tax revenue.
MS Consultants filed a complaint in January 2023 seeking $322,907.80 from M.J. Joseph, arguing it was not paid for work it completed at the project site.
A court ruled in favor of both the city and MS Consultants in the matter. After the rulings, MS Consultants filed a separate foreclosure action, which the city ultimately joined.
In the meantime, M.J. Joseph’s attorneys withdrew their representation. In May, the court closed out the city’s litigation against the developer, as the city deemed it unlikely it would ever collect its money. MS Consultants had earlier voluntarily dismissed its case against the company.
M.J. Joseph and its CEO have essentially walked away from all litigation and the entire project. The company’s website is no longer active, nor are its phone lines.
Earlier this month, a Mahoning County Common Pleas Court ruled that the Mahoning County Sheriff could advertise and sell the buildings and property. The sale price would be based on the appraised value set by the Mahoning County Auditor’s office, $2,069,370.
Proceeds from any sale of the site would be used to repay lienholders – namely the city, MS Consultants Inc. and the Mahoning County Treasurer for tax delinquencies on the property.