Acme debt leads it to court
The company owes more than $1.5 million, according to court documents.
& lt;a href=mailto:firstname.lastname@example.org & gt;By PEGGY SINKOVICH & lt;/a & gt;
and STEPHEN SIFF
VINDICATOR TRUMBULL STAFF
WARREN -- A Youngstown food company under investigation for its dealings with the Trumbull County Jail has filed a Chapter 11 bankruptcy proceeding.
In 2002, Acme Steak Co. lost business worth more than $200,000 a year providing food for Trumbull County inmates after federal, state and local law enforcement officials began looking into how the informal contract was awarded.
Attorney Andrew Suhar represented Acme at a hearing Monday in U.S. Bankruptcy Court in Youngstown. The company wants to continue to operate while the court helps it restructure and work out an agreement with creditors.
Debts and assets
The company owes more than $1.5 million and has about $700,000 in assets, according to court documents.
Court papers state the company owes the most to the Internal Revenue Service and Capital Crossing Bank, assignee of Bank One NA. The company owes the IRS $700,000 and Capital Crossing $695,251.
Acme also owes National City Bank $127,000, Miceli Dairy $15,000 and the Bureau of Workers' Compensation $1,274, among other debts, according to court documents.
Acme Steak officials could not be reached.
The county prosecutor's office, the state Bureau of Criminal Identification and Investigation, the state auditor's office and the FBI have been investigating county purchasing practices for several months involving Acme and other companies.
The probes were prompted by a series of articles The Vindicator began in early August, calling into question the county's purchasing records and practices.
County employees say that Commissioner James Tsagaris helped Acme Steak get its county contract and that he had a hand in seeing that county checks were delivered to Acme Steak personnel.
The auditor's office usually mails checks to vendors, said Auditor Dave Hines, who put a stop to personal pickup of Acme checks.
Tsagaris denies he helped see to it that checks were picked up for Acme. He said employees of the company would come to his office looking for the money and he would send them to the auditor's office.
In September 2001, Tsagaris and Tony Carson, county purchasing director, told officials at the county jail and the juvenile justice center to begin buying from Acme because its prices were better. Competitive bids were not sought for the contract.
Juvenile justice center employees found mistakes on a list circulated by Tsagaris and Carson comparing Acme's prices to other suppliers and did not switch to Acme.
County jail officials said they began ordering from Acme about a month later because they thought they didn't have a choice.
The county spent $145,385 for jail food from Acme from January through August, according to records.
A few weeks after The Vindicator began its investigative series, county Proscutor Dennis Watkins suggested the jail stop buying its food from Acme and buy it instead through the state purchasing program, which Sheriff Thomas Altiere did.
Switching vendors has saved the county about 27 percent, or about $32,000 a year, said Ernie Cook, chief deputy at the sheriff's department.