UPDATED: Ohio Auditor Seeks $7.8M from Marchionda, His Companies, Partners

YOUNGSTOWN, Ohio — The Ohio auditor is seeking recovery of more than $7.8 million from developer Dominic Marchionda, his wife, business partner and entities, and former city finance director David Bozanich.

A “public interest” report released this morning also orders the city to repay $1 million to its water and wastewater funds.

The findings are related to three development projects that Marchionda spearheaded and the city supported through public funds: The Flats At Wick, the Erie Terminal venture, and the Wick Tower project.

These projects became the focus of a widespread state investigation that led to the convictions of Marchionda, Bozanich, former mayor Charles Sammarone, and former company executive Ray Briya on public corruption charges last year.

Throughout the course of the investigation, more than $15 million in government funds used for these projects were analyzed, the audit says.

The largest finding for recovery stems from a $5,008,400 state energy loan fund that was used to support the Wick Tower venture, the audit said. The auditor is seeking an unpaid balance of $6,576,378, which includes penalties and interest, from Marchionda; his partner James Pantelidis, co-founder of Pan-Brothers Associates of New York; and Wick Properties LLC.

The Wick Tower project also received a $500,000 sanitary storm and water infrastructure grant from the city from the water/wastewater fund. It also received another $770,000 brownfield loan to be used for asbestos removal of which $161,326 remains unpaid, according to the audit.

In 2009, the Flats at Wick, a student housing project near Youngstown State University, received a $1.2 million site development grant from the city, $600,000 of which originated from its water and wastewater funds to be used for waterline upgrades.

However, Marchionda used the $1.2 million grant to purchase a fire station at the corner of Wick and Madison avenues from the city for $1 million. Once the city received the payment, the cash was illegally deposited in the city’s general fund under Bozanich’s direction.

The auditor’s public interest report issued a finding for adjustment, ordering the city to repay $1 million – $500,000 apiece to its water and wastewater funds. The auditor’s office also issued a finding of recovery against Bozanich and his bonding company for $614,608.

According to the report, on Oct. 7 the auditor’s office met with Mayor Jamael Tito Brown, Law Director Jeff Limbian, Finance Director Kyle Miasek, three members of city council and other officials.

“The attendees were informed they had five business days to respond to this report,” the state said. 

No response was received. Calls to city officials seeking comment were not returned as of this posting.

In August 2020, Bozanich pleaded to one count of tampering with records and one count of bribery, both third-degree felonies. He also pleaded to two counts of unlawful enrichment of a public official, a misdemeanor.

In September 2020, he was sentenced to one year in prison and was released in August 2021.

The Erie Terminal Place project included the renovation of the landmark building into a mix of apartments and commercial retail space. Project funding from the city included an initial $350,000 water utility grant for water-related costs for the project; another $220,000 grant later in the project that was also tied to water-related costs; as well as a $2 million float loan.

This project also received a Brownfield Revolving Loan Fund loan administered through the Ohio Development Services Agency for $800,000 toward asbestos removal, according to the report. As of July 9, $294,077 remains unpaid, according to the auditor’s report.

The subsequent investigation found that Marchionda had produced fictitious invoices in order to access city-backed loans for the project, the audit report says.

A finding of recovery was issued against Marchionda and related entities for $294,077, the auditor’s office said.

The state issued total findings for recovery against Marchionda for $7,866,389, his wife Jacqueline Marchionda for $294,077, and Pantelidis for $6,737,704, the report said.

Marchionda pleaded guilty in August 2020 to four counts of tampering with records — third-degree felonies — and was sentenced to five years probation and 1,250 hours of supervised community service.

Marchionda’s felony convictions relate to fraudulent billing statements that were used to obtain city float loan money from the city to develop the Erie Terminal project downtown.

Ray Briya, a former vice president of MS Consultants Inc., a company that performed work for Marchionda and the city, pleaded guilty to a five-count bill of information in September 2019 and received three years community service and 180 days of house arrest. He was also fined $5,000.

Also convicted in the probe was former mayor Charles Sammarone, who reached a plea agreement with prosecutors in March 2020. Sammarone was sentenced to five years probation and 30 days of community service.

A criminal case against attorney Stephen Garea, who represented B&B Construction and Marchionda, is still pending, according to the report.

“This type of corruption has a history of running rampant throughout the city of Youngstown and the citizens deserve better,” Ohio State Auditor Keith Faber said in a statement.

“Laws and financial guidelines are in place to avoid fraud and abuse, however, when the wrong people are put in a position of public trust, their greed and duplicity gets the better of them. I am glad they are being held accountable and justice will be served. I appreciate the city of Youngstown’s cooperation throughout this process and the current administration’s efforts to move past these types of practices.”

Pictured at top: Dominic Marchionda and his attorney, John F. McCaffrey, leave the Mahoning County Courthouse following his guilty plea Aug. 7, 2020.

Copyright 2024 The Business Journal, Youngstown, Ohio.