Sunday, September 9, 2018
By DAVID SKOLNICK
and JUSTIN WIER
A Mahoning County grand jury indicted former Youngstown Mayor Charles Sammarone, ex-city Finance Director David Bozanich, downtown property developer Dominic Marchionda and the latter’s affiliated businesses on 101 criminal counts.
In 2008, Dominic Marchionda was looking to develop his first major project in Youngstown – a student housing complex by the Youngstown State University campus called the Flats at Wick.
That project would lead to Marchionda becoming arguably the downtown’s most prominent property developer.
It also was key, an indictment alleges, to mass corruption that resulted in the Aug. 30 indictment of Marchionda, ex-city Finance Director David Bozanich and former Mayor Charles Sammarone.
The 78-page indictment details a criminal enterprise allegedly involving the three, a dozen Marchionda companies as well as nine unidentified people and six unidentified companies.
The Vindicator has worked with sources and found additional court records to provide a more full picture of how the alleged schemes operated.
Though Marchionda secured a loan from the state to clean up environmental problems at the Flats at Wick site and a construction loan from Key Bank, he needed additional money to make his project a reality.
The indictment contends Marchionda went to Bozanich, who oversaw the city’s economic development at the time, to ask if Youngstown could provide funding.
Bozanich told him no.
Marchionda then allegedly met with John Doe 2, who a source close to the investigation confirmed to The Vindicator is Atty. Stephen Garea and described in the indictment as “a good friend” of Bozanich’s. The indictment indicates Marchionda asked Garea to assist in securing city money from Bozanich and to do whatever it took to get the city finance director to agree to support the project.
Garea allegedly met with John Doe 1, who a source confirmed is Philip Beshara, the former president of B&B Contractors and Developers, over the topics of “making Dave happy” or “taking care of Dave.”
The indictment contends Company 1, which The Vindicator has learned is B&B, needed work to remain in business, and Beshara was aware that Bozanich in the past had illegally taken money or benefits to secure approval for a project.
For example, the indictment alleges a bribe to Bozanich from Exal Leasing LLC, a company formed by three unidentified members of the criminal enterprise –
Beshara and John Does 6 and 8 – to construct a building for development near Poland Avenue but not owned by Exal Corp.
Beshara apparently met with Bozanich at a Boardman restaurant and gave him $20,000 to $25,000 in cash in an envelope, which the finance director took and later told Garea the city would back Marchionda’s project, according to the indictment.
It’s also alleged that Garea illegally waived $7,000 to $10,000 in legal fees Bozanich owed him because the finance director decided to support Marchionda’s project.
But the indictment alleges Bozanich and Marchionda weren’t done committing crimes.
Acting on Bozanich’s advice, city council voted 7-0 on June 24, 2009, to provide U.S. Campus Suites LLC, Marchionda’s company, with $1.2 million from water and wastewater funds, and to accept $1 million from the company that would be put into the city’s general fund to balance it. At the time, the general fund was projected to end the year with a deficit.
Marchionda kept the remaining $200,000 and allegedly used $70,000 of it for personal debt such as medical expenses, Poland Swim Club fees, personal bounced check fees, real-estate taxes and investments, according to the indictment.
He is accused of improperly spending at least $600,000 from city funds on personal items, according to the indictment, which also accuses Marchionda of misusing an undetermined amount of money obtained from state and federal governments to turn the Erie Terminal Place and Wick Towers into downtown apartments.
The indictment accuses Sammarone, who served as mayor from August 2011 to December 2013, of soliciting and receiving recurring cash payments totaling $10,000 from John Doe 6 in return for steering city projects to the company that unidentified person worked for without his supervisors’ knowledge.
John Doe 6 is a key person in the indictment.
He’s described as an employee of unnamed Company 2, who provided benefits paid by the company – again without the knowledge or anyone else in the company – to Bozanich, Sammarone, Marchionda and others over at least a 10-year period of time.
Bozanich, Sammarone and Marchionda have denied any wrongdoing. They submitted written not-guilty pleas last week.
THE PAPER TRAIL
Though the indictment provides great insight into the alleged criminal schemes, a lawsuit filed by B&B Contractors and Developers last year sheds more light on some of the John Does in the indictment.
The lawsuit led The Vindicator to identify some of the key players.
Beshara, Garea and Sam DeCaria – who was B&B’s controller as well as John Doe 3 in the indictment – all feature prominently in the lawsuit that accuses the trio of an ongoing pattern of theft from the company that B&B’s lawyers said totaled between $2.5 million and $3.5 million.
“Philip Beshara, who was the president of B&B at the time, engaged in straight-up theft from the company,” said Atty. Martin Desmond.
Beshara had checks issued to his bank he deposited, and DeCaria made the checks appear to be legitimate expenses associated with certain jobs, Desmond said.
“If the expense became too high in certain jobs, they would transfer the money to another one, in an effort to basically hide the ongoing theft,” Desmond said.
Accounts receivable clerks began generating forms to document the checks requested by DeCaria.
The lawsuit describes a relationship Garea initiated with “Business Entity B” for the construction of a building in Youngstown in 2009, and for the renovation of a building in Youngstown in 2015. Those dates coincide with Marchionda’s Flats at Wick and Wick Tower projects.
The indictment states Marchionda owed $90,000 to B&B at the end of the Flats at Wick project, and the lawsuit further alleges the business did not pay all fees related to the 2009 project and persuaded Beshara to forgo filing liens by promising future business opportunities.
DeCaria filled out a form that claimed B&B performed $90,000 in demolition work on the Erie Terminal project, according to a document obtained by The Vindicator. The indictment alleges the company did not perform the work, and the money was used to pay off the debt from the Flats at Wick project.
Beshara, DeCaria and Garea did not inform B&B of the total extent of the money owed, the lawsuit alleges.
Once Beshara left B&B in 2016, he formed his own company called PMB Construction. It is believed Marchionda and his associated companies terminated their relationship with B&B and employed PMB.
The lawsuit documents alleged improper checks issued in relation to construction of a building in Youngstown in 2009, and for the renovation of a building in Youngstown in 2015 that total $601,569, including $3,569 in checks invoiced to Beshara and $80,000 invoiced to Garea.
B&B issued a statement forcefully aserting the company was the victim of the men named in the lawsuits.
“The other shareholders and board of directors including the late Frank Beshara, one of the original founders of the company, were shocked and angered by the betrayal of those in whom they placed their trust,” the statement reads.
“It’s a shame that B&B’s good reputation is being dragged through the mud,” Desmond said.
An attorney for DeCaria declined to comment. Attorneys for Beshara and Garea did not return calls Friday.