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Fire station sale is focus

Corruption case hearing involves ex-finance director, developer

Staff photo / David Skolnick Dan Kasaris, back turned, a senior assistant Ohio attorney general, talks with defense attorneys in a Thursday corruption case pretrial involving former Youngstown Finance Director David Bozanich, developer Dominic Marchionda and 10 of the latter’s affiliated companies. Talking to Kasaris, from left, are John F. McCaffrey, who represents Marchionda and nine of the companies; Brian R. Downey, who represents Wick Properties LLC; and Ralph E. Cascarilla, Bozanich’s lawyer.

YOUNGSTOWN — The city’s sale of a now-closed North Side fire station and the questionable use of Youngstown money for the development of a student-housing complex were at the heart of a pretrial hearing into alleged corrupt activities by former Youngstown Finance Director David Bozanich, developer Dominic Marchionda and 10 of the latter’s affiliated companies.

The hearing in front of Mahoning County Common Pleas Judge Maureen Sweeney started Thursday and is scheduled to conclude today.

Sweeney then will consider the evidence and rule on various motions from the defendants to dismiss the charges and exclude evidence in a 101-count indictment.

The filings were done “under seal,” meaning the details are concealed from the public. But the court’s docket lists “statute of limitations” and “duplicity,” meaning some of the accusations are listed in more than one count, as reasons to dismiss the case.

Testifying Thursday were T. Sharon Woodberry, the city’s economic development director, along with Christine Pitlik and Richard Poland, who both work for the state auditor’s office and conducted audits of Youngstown.

One of those audits issued a finding for adjustment related to Marchionda in 2009 paying $1 million for the North Side fire station on Madison Avenue, which closed last month, and then a day later getting a $1.2 million grant from the city’s water fund to develop the Flats at Wick student-housing complex.

An Aug. 30, 2018, indictment alleges Bozanich gave $1.2 million to Marchionda if the developer would give $1 million back to the city in December 2009 so the then-finance director could put it in the city’s struggling general fund to balance it to end that year.

Bozanich is alleged to have allowed Marchionda to keep the remaining $200,000 with the developer using $70,000 of it for private purposes, according to the indictment.

The allegation is detailed in a charge of engaging in a pattern of corrupt activity.

Other charges against the defendants include bribery, aggravated theft, money laundering, tampering with records and receiving stolen property.

The city originally had agreed to sell the station for $10 to Marchionda. But six weeks later, city council, acting on Bozanich’s advice, authorized the sale for $1 million and the city signed a 10-year lease for $10 annually for the station. That lease expired last month and wasn’t renewed.

The indictment also alleges that Philip Beshara, the former president of B&B Contractors and Developers Inc., gave between $20,000 and $25,000 to Bozanich at a Boardman restaurant so the city would give grant money to Marchionda for the student-housing project. Beshara is among three people expected to testify at today’s hearing.

Bozanich, Marchionda, Marchionda’s companies as well as former Youngstown Mayor Charles Sammarone — who was also indicted but is having a separate trial — all have pleaded not guilty to the charges.

Poland said he first became aware of the questionable financial transactions after reading an article in a newspaper. Attorneys for both sides confirmed the article was in The Vindicator.

Poland testified that after reading the article he became concerned about the city using the $1 million to balance the general fund and said it should have gone into the city’s capital project fund or business development fund.

Pitlik also testified the $1 million should not have gone to the general fund and initially auditors didn’t know where the money came from.

She had little recollection of other details, saying they happened more than a decade ago.

Poland testified that Bozanich explained that because the fire station property was declared surplus, the money could go into the general fund. Poland also said he spoke to Eugene Leson Jr., the city’s water department chief engineer, who expressed concern that some water funds weren’t properly being used for water expenses.

Woodberry testified the economic development department, which was under Bozanich’s control, didn’t have a method to audit how grants from the water and wastewater funds were spent, and when invoices were submitted, they weren’t closely reviewed. That process, she said, has since changed.

But Ralph E. Cascarilla, Bozanich’s attorney, did get Woodberry to acknowledge that city council was looking to sell the fire station property in June 2009, six months before the Marchionda purchase, and it was in the city’s general fund budget.

Also, John F. McCaffrey, who represents Marchionda and nine of the companies indicted, pointed out there was no time frame for when the developer could spend the $1.2 million on water projects, saying it could have been done either before or after the city grant was provided.

“The city wasn’t looking for how the $200,000 was spent as long as it was used on that property,” he said.

He added that Marchionda first paid the $1 million to the city and then received the $1.2 million. It was mentioned that was for a very brief time.

In addition to Beshara, two other key witnesses are scheduled to testify today: Raymond Briya, former chief financial officer for MS Consultants Inc., and attorney Stephen Garea. The three are implicated in the indictment as John Does, and have agreed to cooperate with prosecutors.

Briya pleaded guilty in September to five felonies: two counts of attempted bribery, and one count each of tampering with records, grand theft and obstructing justice.

He admitted giving more than $100,000 in cash, meals, gifts and golf benefits to Bozanich over a decade, and of giving at least $9,000 in cash to Sammarone to “corrupt” them in their official capacities with the city.

He also pleaded guilty to providing a false invoice on or about Oct. 6, 2011, to Marchionda’s Erie Terminal Place project when only about $8,000 worth of work was done, taking between $75,000 and $150,000 from MS without the company’s knowledge over a 15-year period to “benefit himself by bribing public officials,” and lying to a grand jury on or about Oct. 27, 2017, about the false invoice.

Briya, Beshara and another person formed Exal Leasing LLC, which provided Bozanich with $100,000 to push a project that didn’t materialize.

The indictment states Garea is a good friend of Bozanich and convinced Beshara to give the $20,000 to $25,000 to Bozanich to have the city do business with Marchionda.

The indictment alleges Marchionda misspent at least $600,000 in city funds on personal items in addition to misusing money obtained from the city, state and federal governments for the Flats at Wick, Erie Terminal Place and Wick Tower downtown-housing projects.

The trial date for Bozanich, Marchionda and Marchionda’s companies is scheduled for June 1. Sammarone’s trial is March 16.