 |
Cleveland, Ohio water investigation
Timeline of federal convictions and guilty pleas in ongoing Cleveland, Ohio water investigation
(1) Norman Gore, general storekeeper at the Water Division, was convicted on April 25, 2005 and sentenced to 60 months incarceration. He was ordered to pay $1,337,597.20 restitution to the City of Cleveland;
(2) James Stallworth, warehouse manager at the Water Division, was convicted on November 18, 2004. Stallworth was sentenced to a 33 month term of imprisonment and ordered to pay $793,000 restitution to the City of Cleveland;
(3) Kenneth McNeil, head storekeeper at the Water Division, was convicted on November 17, 2004 and sentenced to 3 years probation. He was ordered to pay $10,000 in restitution to the City of Cleveland.
(4) Joseph B. Sturman, president and owner of Victory White Metal Company, was convicted on November 22, 2004 and sentenced to 24 months incarceration, a $10,000 fine, and ordered to pay $1,156,853 restitution to the City of Cleveland. Sturman agreed to forfeit $584,705 in illegal proceeds;
(5) Samuel Petrony, head of the Water Division at Victory White Metal Co., was convicted on November 29, 2004 and sentenced to 41 months incarceration and ordered to pay $1,949,853 restitution to the City of Cleveland;
(6) Arnold Kaufman, president of Woodhill Supply Co., was convicted on January 5, 2005 and was sentenced to 21 months incarceration and a $5,000 fine. Kaufman was ordered to pay $180,744.21 in restitution to the City of Cleveland, and Kaufman agreed to forfeit $90,372.10 in illegal proceeds;
(7) Michael Semlar, salesperson at Woodhill Supply Co., was convicted on March 22, 2005. Semlar was sentenced to a 21 month term of imprisonment and ordered to pay the City of Cleveland $180,744.21 in restitution.
(8) Sebastian Morabito, owner of Morabito Trucking, was convicted on January 25, 2007. Morabito was sentenced to a 24 month term of imprisonment and a $25,000 fine. He was ordered to pay the City of Cleveland $75,000 restitution.
(9) James Oppermann, owner of Richmond Valve and Pipe, was convicted on April 10, 2007 and sentenced to 6 months home confinement without electronic monitoring and $37,000 in restitution to the City of Cleveland.
(10) Peter C. Zappola, a sales representative for a plumbing supply company, was convicted on June 8, 2007 and sentenced to imprisonment of 12 months and one day and restitution in the amount of $216,000 to the City of Cleveland.
(11) Jimmy Lee Gates, 50, the highest ranking official convicted in a long-running federal investigation into corruption in the department. Gates was an assistant chief who oversaw about 200 workers until he resigned in late October. He had worked for the department for 26 years. Pleaded guilty Dec. 7, 2007 to splitting bribes with another city worker.
(12) Liberator Noce, 66, owner of Libby Co. which had a contract with the city of Cleveland to maintain fire hydrants in the city and suburbs. Pleaded guilty Dec. 7, 2007 to paying bribes to Gates and another city worker.
Two plead guilty in Cleveland, Ohio water department bribery case
A former Cleveland Water Department official and a contractor pleaded guilty Friday for their part in a bribery scheme that authorities say put thousands of dollars into the pockets of water department workers.
The men are:
• Jimmy Lee Gates, 50, of Cleveland is the highest ranking official convicted in a long-running federal investigation into corruption in the department. Gates was an assistant chief who oversaw about 200 workers until he resigned in late October. He had worked for the department for 26 years.
• Liberator Noce of Willoughby Hills, who owns Libby Co., which had a contract with the city of Cleveland to maintain fire hydrants in the city and outlaying suburbs. The city paid Libby $3.2 million for its work from 2002 to 2004, according to an indictment. Gates is accused of splitting $40,000 in bribes from Noce with retired Water Department supervisor Oscar Wells in 2003. Wells, 58, of Richmond Heights, pleaded not guilty to bribery, conspiracy and money laundering Friday. Wells worked for the department for over 30 years before he retired about two years ago. Wells, Noce and Gates were indicted Oct. 24. The bribery scheme, according to authorities, also lined the pockets of Norman Gore, another former department supervisor. Gore is serving five years in prison after he accepted appliances, World Series tickets, $38,000 in cash and other items from contractors who over-billed the city $1.1 million. According to a plea agreement announced Friday before U.S. Judge Solomon Oliver, Gates faces two years of prison and Noce faces one year. Gates faces a harsher punishment because he did not initially cooperate with federal agents, Rowland said. Both men agreed to cooperate with investigators and offer testimony in other cases if needed, according to the plea agreement. Oliver scheduled a sentencing hearing for Gates and Noce on March 5. Cleveland Plain Dealer_ 12/7/07
Three more indicted in federal investigation of Cleveland, Ohio water department
An unsealed five-count grand jury indictment charged three individuals in the investigation of corruption in the Cleveland Division of Water. The indictment charges Jimmy Lee Gates, 50, Assistant Chief of Distribution of the Cleveland Water Division, Oscar Wells, 58, Retired Water Pipe Repair Supervisor of the Cleveland Water Division and Liberator Noce, 66, owner of Libby Construction, Inc. and Noce Enterprises, Inc., with one count of Hobbs Act bribery, one count of conspiracy to commit Hobbs Act bribery and one count of conspiracy to commit money laundering. Wells was also charged with two additional counts of Hobbs Act bribery. The indictment alleges that Noce, who was paid $3.2 million by the City of Cleveland Water Division from 2002 through 2004 to repair and replace hydrants and valves, paid bribes to former Cleveland Water Division Supervisor Norman Gore totaling approximately $14,000 per year from 1999 through 2003 in exchange for Gore processing Libby Construction invoices in a timely manner. In a separate case, Gore pleaded guilty to bribery, and is now serving a 5-year federal sentence. The indictment also alleges that, beginning in approximately 2002, and continuing through 2003, Noce paid cash bribes to Wells in exchange for Wells approving payment of inflated Libby Construction invoices. The indictment further alleges that in 2003, Noce paid bribes to Gates and Wells totaling approximately $40,000 which Gates and Wells split, in exchange for Wells and Gates approving payment of inflated Libby Construction invoices. The indictment also alleges that an unnamed contractor paid cash bribes to Wells in exchange for work twice in 2004, once in the amount of $200 and once in the amount of $100. Today's indictment follows the convictions of three former City of Cleveland Water Division employees and seven Water Division contractors. News Release_ 11/1/07
Gregory A. White, United States Attorney for the Northern District of Ohio; Cromwell A. Handy, Special Agent in Charge, Internal Revenue Service, Criminal Investigation, Cleveland Field Office; C. Frank Figliuzzi, Special Agent in Charge, Federal Bureau of Investigation, Cleveland Division; and Michael McGrath, Chief, Cleveland Division of Police, announced today that Sebastian “Benny” Morabito was sentenced to 24 months in custody for bribing a public official with the Cleveland Water Department. The Court ordered Morabito to pay a fine of $20,000 and to pay restitution to the City of Cleveland in the amount of $75,000. Following his incarceration, Morabito will be placed on supervised release for two years.
This sentence follows Morabito’s plea of guilty to the charge of conspiracy to bribe a public official. In the plea agreement, Morabito, the owner and operator of Morabito Trucking and Cleveland Central Enterprise, admitted to having conspired with Norman Gore, the General Storekeeper of the Cleveland Water Department, to engage in a bribery scheme that lasted from 1998 until 2003. Morabito paid bribes in the form of cash and used cars to Gore in exchange for Morabito’s companies obtaining City business and for the approval of the payment of City funds to Morabito’s companies for shipments of slag and limestone, some of which were never actually delivered to the City. As a result of the bribes, Morabito’s companies received payments from the City of up to $500,000 per year and profited in the amount of approximately $15,000 per year.
United States Attorney Gregory White said this of the sentence imposed today, “This prosecution moves us one step closer to eliminating fraud and corruption from the City of Cleveland and restoring the community’s confidence in the integrity of the procurement process.”
Today’s sentencing follows the convictions of three former City of Cleveland Water Division employees and four Water Division contractors:
(1) Norman Gore, General Storekeeper at the Water Division, was convicted on April 25, 2005 and sentenced to 60 months incarceration. He was ordered to pay $1,337,597.20 restitution to the City of Cleveland;
(2) James Stallworth, Warehouse Manager at the Water Division, was convicted on November 18, 2004. Stallworth was sentenced to a 33 month term of imprisonment and ordered to pay $793,000 restitution to the City of Cleveland;
(3) Kenneth McNeil, Head Storekeeper at the Water Division, was convicted on November 17, 2004 and sentenced to 3 years probation. He was ordered to pay $10,000 in restitution to the City of Cleveland.
(4) Joseph B. Sturman, President and Owner of Victory White Metal Company, was convicted on November 22, 2004 and sentenced to 24 months incarceration, a $10,000 fine, and ordered to pay $1,156,853 restitution to the City of Cleveland. Sturman agreed to forfeit $584,705 in illegal proceeds;
(5) Samuel Petrony, Head of the Water Division at Victory White Metal Co., was convicted on November 29, 2004 and sentenced to 41 months incarceration and ordered to pay $1,949,853 restitution to the City of Cleveland;
(6) Arnold Kaufman, President of Woodhill Supply Co., was convicted on January 5, 2005 and was sentenced to 21 months incarceration and a $5,000 fine. Kaufman was ordered to pay $180,744.21 in restitution to the City of Cleveland, and Kaufman agreed to forfeit $90,372.10 in illegal proceeds;
(7) Michael Semlar, Salesperson at Woodhill Supply Co., was convicted on March 22, 2005. Semlar was sentenced to a 21 month term of imprisonment and ordered to pay the City of Cleveland $180,744.21 in restitution.
The case is being prosecuted by Assistant United States Attorneys Ann C. Rowland and Antoinette Thomas Bacon. News Release_ 1/25/07
Two deal brokers with dirty hands manipulated Ohio water contracts
Nate Gray and Gilbert Jackson used a variety of sweeteners to ingratiate themselves with municipal officials: tickets to ballgames and Broadway shows, under-the-table payments, a $700 Louis Vuitton handbag. Gray had especially good connections in the Ohio suburb of East Cleveland. Gray and Jackson helped secure water and sewer contracts in Cleveland and East Cleveland for two of the nation's most prominent engineering firms. Those deals became key elements in a federal racketeering investigation that eventually put the pair in prison. Jackson was a New Orleans-based senior vice president for the engineering firm Camp Dresser & McKee. He developed ties to Cleveland Mayor Mike White and was active in the U.S. Conference of Mayors, serving as co-chairman of its Mayors Business Council, created to promote "public-private partnerships." Gray was a political supporter and close friend of White, Cleveland's mayor from 1990 to 2002. Gray also helped CH2M Hill, a Colorado engineering firm, win a $3.9-million no-bid contract in 2002 to run East Cleveland's water and sewer system. A CH2M subsidiary, Operations Management International Inc., also known as OMI, channeled cash payments to then-Mayor Emmanuel Onunwor through a front company, prosecutors said in court papers. They said OMI passed money to a Cleveland engineering firm that employed Gray as a subcontractor and Gray made payments to the mayor. Ralph Cascarilla, an attorney for OMI, said his company had no idea that consulting fees it paid the local firm were used to bribe the mayor. OMI has not been charged in the case. The story of Gray and Jackson offers a glimpse of the underside of the municipal water business. Los Angeles Times_ 5/29/06 (logon required)
Firms unaware of Cleveland, Ohio, bribes, companies say
An indictment unsealed this week in Cleveland takes aim at five people who federal prosecutors say accepted or handled bribes linked to consultant Nate Gray. But the cash sources for those bribes - large corporations with national operations - were not indicted. The companies say that the money they paid Gray was for consulting fees. The case revolves around cash paid by New Jersey-based Honeywell Inc., Denver-based CH2M Hill; and Massachusetts-based Camp, Dresser & McKee, all companies with diverse operations. The indictment says CH2M Hill paid Gray as much as $10,000 a month in fees while the firm had a contract to operate the East Cleveland water system. Gray bribed then-East Cleveland mayor Emmanuel Onunwor to keep the company's contract, prosecutors said. A CH2M Hill lawyer said the business had no idea that Gray was paying bribes to Onunwor and would never have approved such a thing. Cleveland Plain Dealer_ 1/20/05
The 45-count indictment charges Gray with creating a secret machine that corrupted public officials with cash, Super Bowl tickets, massages and limousines. Also charged were former Houston building department director Monique McGilbra, prominent Cleveland lawyer Ricardo Teamor, consultant Gilbert Jackson, former Honeywell Inc. salesman Brent Jividen and Cleveland City Councilman Joseph Jones. The indictment also accuses Gray of bribing then-East Cleveland mayor Emmanuel Onunwor involving a no-bid, $3.9 million contract with Denver-based CH2M Hill, which managed the water and sewer systems in East Cleveland starting in March 2002. According to federal prosecutors, CH2M Hill provided as much as $10,000 a month in consulting fees to Cleveland engineer Ralph Tyler, who carried the money to Gray, who used it for bribes. Attorneys for CH2M Hill and Tyler say their clients did not know the money was used for bribes. Cleveland Plain Dealer_ 1/19/05
November, 2004
Federal Judge Patricia Gaughan also fined Sturman $10,000 Thursday and ordered him to repay the city for the excessive charges. Sturman's business, Victory White Metals of Cleveland, bought former city employee Norman Gore a Lincoln Continental and World Series tickets and doled out $38,000 in bribes to him. Gore has pleaded guilty to racketeering charges and will be sentenced next month. AP/newsnet5.com_ 11/19/04
September, 2004
Mayor of East Cleveland, Ohio, admits killing man 22 years ago; said she acted in self-defense
Mayor Saratha Goggins told the (Cleveland) Plain Dealer that she was defending herself when she fatally stabbed O'Neal Price, 48, in 1982. Goggins became mayor this month after Mayor Emmanuel Onunwor was convicted of corruption charges. The disclosure came after the Plain Dealer obtained a copy of a coroner's report. Chicago Sun-Times_ 9/27/04
Norman Gore, 50, of Garfield Heights, pleaded guilty in U.S. District Court to a racketeering charge. He faces nine years in prison and will repay part of the $1 million city loss. Prosecutors dropped 12 charges against him, including extortion and money laundering, as part of a plea agreement. Prosecutors said Gore accepted bribes including a $30,000 car and $38,000 in cash. Plain Dealer/AP/Akron Beacon-Journal_ 9/15/04 (logon required)
Federal
spotlight shines on businessman who allegedly gave mayor of East Cleveland,
Ohio, tens of thousands of dollars in bribes in exchange for city contracts
Businessman Nate Gray reportedly urged Mayor Emmanuel Onunwor to trumpet
a contract with CH2M Hill, a Colorado company that sought work in the
city's water department, to council members. Cleveland Plain
Dealer_ 9/5/04
A federal jury convicted Onunwor on multiple racketeering counts. OMI received a no-bid contract worth $1.3 million annually to provide water, wastewater and meter-reading services to the inner-city suburb in early 2002. OMI terminated the contract in April for nonpayment. OMI, which stands for Operations Management International, employs 1,600 people and generated $175 million in revenues in 2002. The company operates 180 water and wastewater systems across the country. Employee-owned CH2M Hill, Denver's largest private company, founded OMI in 1980. Denver Post_ 9/3/04
The IRS said he accepted nearly $50,000 from longtime consultant Nate Gray and other contractors who did business with the city. In some of the worst of his misdeeds, Onunwor pushed a no-bid contract through City Council for a Colorado-based company, CH2M Hill, federal prosecutors said. Gray worked as a consultant for the company at the time. Cleveland Plain Dealer_ 8/31/04 (logon required)
Investigation
of East Cleveland, Ohio, mayor prompted many other U.S. probes: Federal
prosecutors
Prosecutors said federal agents have begun probes in Chicago, Detroit,
Houston, New Orleans and in California and elsewhere, seeking public corruption
that involves possible contract rigging. According to documents filed
in U.S. District Court in Cleveland, charges in those cities could include
extortion, money laundering, wire fraud and using telephones to promote
corrupt payments. East Cleveland mayor Emmanuel Onunwor is on trial for
racketeering, bribery, witness tampering, obstruction of justice, tax
fraud annd lying in a bankruptcy case. The businesses that had the contract
to run the city Water Department gave $60,000 to an intermediary in 2002,
according to the indictment. CH2M Hill and a subsidiary, Operations Management
International, did the work at the time. Cleveland Plain Dealer_ 8/23/04
(logon required)
The federal court suit seeks $4.5 million from Woodhill Supply Co. and back pay and retirement benefits from former Water Department employees. Woodhill's president, Arnold Kaufman, and salesman Michael Semlar pleaded guilty to charges of bribing the employees from 1998 to 2003 in exchange for contracts. Federal prosecutors said Woodhill billed the city for parts that were never received. Cleveland Plain Dealer_ 8/10/04 (logon required)
July, 2004
Cleveland
contractor charged with racketeering in federal investigation of corruption
in the city water department
Samuel Petrony, 43, is accused of paying bribes and kickbacks to water
department employes and overcharging the water system $1.1 million. He
worked for Victory White Metals and later for his own company, PEI. He's
the seventh person charged in the investigation. Five have pleaded guilty,
including including Joseph Sturman, 66, president of Victory White Metals.
AP/Ohio News Now_ 7/19/04
Cleveland,
Ohio Water Department supervisor and the president of a private company
plead guilty to unconnected bribery charges involving the city's water
agency
Supervisor James Stallworth, 52, admitted in U.S. District Court to taking
at least $210,000 from an unidentified vendor in exchange for approving
more than $800,000 in city payments to the vendor for supplies the city
never received. Arnold Kaufman, president of Woodhill Supply Co., admitted
to giving $180,000 worth of home appliances and landscaping equipment
to two Water Department workers who approved payment of inflated bills
to Woodhill. Five people have pleaded guilty in the investigation into
the department. Cleveland Plain Dealer_ 6/25/04 (logon required)
Cleveland,
Ohio water department bribery case worse than first thought: City lost
nearly $800,000, Prosecutors increase charges against worker
U.S. Attorney Gregory White filed a replacement charge of conspiracy to
commit extortion Monday against James Stallworth, 52, of Cleveland,
a city Water Division employe who was arrested last month on a lesser
offense. The new charge stems from information that Stallworth received
$200,000 in bribes for deals that cost the city of Cleveland $793,000
for items paid for but never delivered. Another former city employee,
a salesman and a business owner have pleaded guilty in federal court to
corruption charges in the case. AP/Cleveland Plain Dealer_ 6/15/04
(logon required)
2
more plead guilty in Cleveland Water Department bribe case
Michael Semlar, 37, of South Euclid, pleaded guilty in U.S. District Court
to conspiracy to bribe a public official and Kenneth McNeil, 38, of Cleveland,
pleaded guilty to conspiracy to accept bribes. Both face up to five years
in prison, but have agreed to cooperate in exchange for reduced sentences.
Three people now have pleaded guilty in the probe. Investigators claim
the Water Department paid more than $1.1 million to two companies for
work that was never done. Two Water Department employees and one contractor
are awaiting trial. Cleveland Plain Dealer_ 6/10/04 (logon required)
May, 2004
Former Cleveland water employee charged with extortion, racketeering and money laundering
Norman Gore is accused of strong-arming contractors into giving him World Series tickets, cash and at least 58 home appliances in exchange for doing business with the city, authorities say. The scheme also brought him lawn service, slot machines and $38,000, according to an indictment unsealed Thursday. The former purchasing agent is the sixth person charged in a conspiracy case that includes two other city workers and employees of Woodhill Supply Co. of Willoughby and Victory White Metals of Cleveland, though sources said Gore is the key player. Cleveland Plain Dealer_ 5/21/04
Joseph Sturman faces 46 months in prison for money laundering and conspiracy to bribe a public official. As part of his plea arrangement, he'll testify against others in the expanding Water Department case. More charges are expected this week. Cleveland Plain Dealer_ 5/18/04 (logon required)
Two
former Cleveland, Ohio Water Division workers charged with accepting bribes
It's the third time this month that federal charges were handed down as
a result of a long-running investigation into corruption in the Water
Division. Cleveland Plain Dealer_ 5/15/04
Cleveland,
Ohio parts supplier charged with overbilling the city more than $1.1 million
in a long-running bribery case within the water division
Federal prosecutors said Joseph Sturman, owner of Victory White Metal
Co., paid bribes to a purchasing agent in the water department over four
years and even bought the official a $30,000 car in 1997. In return, the
city paid grossly inflated rates on valves, pipes and hydrants that Sturman's
company supplied to the city, the charges said. Federal officials said
the charges are the first of an ongoing public corruption case involving
vendors who paid off employees in the water department. Other charges
are expected this month. Plain Dealer_ 5/7/04 (logon required)
