MS Consultants Confirms It’s Cooperating in Corruption Probe
YOUNGSTOWN, Ohio – MS Consultants Inc., a longstanding engineering and architecture firm in the Mahoning Valley, confirmed Friday that it is cooperating with state authorities in an ongoing investigation that has so far charged a developer and two former city officials with more than 100 counts of public corruption.
“We are continuing to cooperate with the investigation,” Krystal Paisley, spokesperson for MS Consultants, said in a statement emailed to The Business Journal late Friday. “We continue to uphold our ethics and adhere to the highest standards as an engineering and architecture firm.”
Developer Dominic Marchionda, former Youngstown mayor Charles Sammarone, and former Youngstown finance director David Bozanich were indicted Aug. 30 on 101 counts of public corruption. All three have pleaded not guilty.
The investigation includes development projects in the city in which MS Consultants took part. Prosecutors claim that Marchionda took public money intended for these development projects and spent it on personal expenses.
According to the indictment, an unnamed party identified only as John Doe 6 is alleged to have paid out bribes to both Bozanich and Sammarone in return for securing business for the company – identified as Company 2 in the indictment.
MS Consultants confirmed on Friday that John Doe 6 was an employee of the company and no longer works there. MS Consultants is Company 2 referenced in the indictment. The former employee is believed to be Raymond Briya.
Due to an editor’s error, an earlier post of this story erroneously identified Briya as a member, by marriage, of the Mosure family. That is incorrect. An email from MS Consultants sates the following, “Mr. Briya is not, and never was, a member of the Mosure family either by marriage or other relation.” The Business Journal apologizes for the error.
“MS Consultants had no knowledge of these alleged activities,” Paisley said. “This was an incident involving one employee, named John Doe 6 in the indictment. This employee is no longer employed with or associated with ms consultants.”
The Business Journal reported late Thursday that an invoice submitted by MS Consultants to Marchionda in 2011 for work on the Erie Terminal project downtown matched a billing statement that investigators say was fraudulent and generated from John Doe 6, identified as an employee of “Company 2.”
According to the indictment, Marchionda persuaded the employee in question to create a false invoice that billed the Erie Terminal project $105,000 when state investigators say the company performed less than $10,000 worth of work on the building.
Documents obtained by The Business Journal through an open records request filed with the city of Youngstown show that on Aug. 5, 2011, MS Consultants billed Marchionda a lump sum of $105,000 for design services it says it rendered through July 30, 2011, related to the “Erie Terminal renovation.”
The indictment said the invoices were fraudulent and were used by Marchionda to draw money from the city’s float loan program, which awarded the Erie Terminal project $2 million.
The fraudulent billing form submitted by Company 2 was “uttered to the city of Youngstown, who unwittingly paid the $105,000 for the first float loan draw on the Erie Terminal project,” according to the indictment.
Marchionda owed Company 2 $170,000 for work it performed on an earlier project, The Flats At Wick, a student-housing complex just north of Youngstown State University, the indictment said.
The indictment alleges that John Doe 6 also paid Bozanich at least $100,000 between 2006 and 2013 through a travel agency that Bozanich once co-owned.
And investigators claim that John Doe 6 paid Sammarone, while serving as mayor, cash “in return for steering city projects to the company John Doe 6 worked for.” According to investigators, Sammarone was paid at least $10,000 over a 23-month period.
Two other companies, B&B Contractors and Developers Inc. and Stephen Garea Attorney at Law, also submitted invoices related to the Erie Terminal project that matched billing statements that the state alleges were bogus.
According to prosecutors, a business described as Company 1, which sources confirm is B&B, submitted a false AIA application that stated it had performed $90,000 worth of demolition work on the project when it did not.
Samuel DeCaria, then the controller at B&B, signed the application, according to records obtained by The Business Journal, and is believed to be John Doe 3 in the state’s indictment. The application contains a line item of $90,000 for demolition state investigators allege was never done.
B&B has stated that it was unaware of the actions of Beshara and DeCaria. The company has filed lawsuits against the two men, as well as attorney Stephen Garea, alleging they conspired to defraud the company of between $2.5 million an $3.5 million.
The indictment also identifies a “Company 3” that investigators say Marchionda had create an invoice “asserting that it was billing Marchionda/Erie Terminal Place for work it had done at the Erie Terminal in the amount of $35,500, when such was false.”
Instead, documents say that Company 3 performed less than $5,000 worth of work on the project.
According to records obtained by The Business Journal, Erie Terminal Place received an invoice from Stephen R. Garea Attorney At Law for $35,500 for services rendered through Aug. 31, 2011.
The invoice lists 177.5 billable hours at $200 per hour during which the attorney said he negotiated a draft purchase agreement for the building, met with city officials related to economic development and incentive packages, held meetings with Marchionda on state development packages and historical tax credits, and reviewed closing documents.
“In fact, Company 3 performed less than $5,000 work at the Erie Terminal project,” the indictment states.
Garea is widely believed to be John Doe 2 in the indictment. Garea acted as corporate counsel for B&B, Marchionda, and waived what prosecutors say were $10,000 in legal fees owed to him by Bozanich in return for the city’s support of the Flats At Wick project.
Pictured at top: MS Consultants headquarters in downtown Youngstown.
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