u.s. v. calabrese & prudoff: bribery concerning programs receiving federal funds 18 usc 666 -...

Case: 1:11-cr-00437-SL Doc #: 1 Filed: 09/22/11 1 of 70. PageID #: 1

. . ... • , ·, • • . • f

IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF OHIO

EASTERN DIVISION -

' • • I � • :._ ;_

UNITED STATES OF AMERICA,

Plaintiff,

v.

ANTHONY 0. CALABRESE, III SANFORD A. PRUDOFF

Defendants.

The Grand Jury charges:

) ) ) ) ) ) ) ) ) ) )

CASE NS·UDGE �JUGENT Title 18, United States Code Sections 2, 371, 666, 1001, 1341, 1349,

1512, 1951, 1962( d) and Title 26, United States Code, Section 7206( 1)

GENERAL ALLEGATIONS

At all times material to this Indictment:

The Defendant

1. Defendant ANTHONY 0. CALABRESE, III, ("CALABRESE") was an attorney

licensed to practice law in the State of Ohio and was an associate and a partner in Law Firm 1.

As an Ohio-licensed attorney, CALABRESE was subject to the rules of ethics set forth in the

Ohio Rules of Professional Conduct and former Ohio Code of Professional Responsibility, which

along with other provisions of law, ( 1 ) imposed on attorneys a duty of loyalty to clients, (2)

recognized that an attorney has a fiduciary relationship- with clients, (3) forbade an attorney from

using a client's trust to the client's disadvantage, and (4) required that an attorney avoid personal

conflicts of interest that had an adverse effect on the. representation of a client. These rules

included Ohio Rules of Professional Conflict I . 7 and 1.8 and former Ohio Code of Professional

Responsibility sections DR 5-101(A)(1) and DR 5-105.

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2. Burl wood Holdings, LLC ("Burl wood Holdings") was an LLC formed under the

laws of the State of Ohio on or about August 19, 2004 and controlled by CALABRESE.

3. Law Firm 1 was an LLP founded in or around 1909. Law Firm 1 maintained

offices in Cleveland and Columbus, Ohio and in other locations throughout the United States.

Law Firm 1 received fees from clients who sought Law Firm 1 ' s services. Law Firm 1 used the

client fees to pay the firm's expenses and to compensate its attorneys, including its partners.

4. Law Firm 1 conducted periodic appraisals of its attorneys. One factor c�nsidered

during the appraisal was the attorney's ability to obtain and retain clients.

5. Defendant SANFORD A. PRUDOFF ("PRUDOFF") was employed as the

Community Development Director for the City of Lorain from in or around 1973 until in or

around 2009.

Public Entities

6. Cuyahoga County, Ohio ("County") was a government body whose departments

included the Cuyahoga County Auditor's Office ("Auditor's Office") and Cuyahoga County

Engineer's Office ("Engineer's Office"), each of which was headed by an elected public official .

7. The Board of Cuyahoga County Commissioners ("County Commissioners") was

the central governmental body of the County, consisting of three co-equal members who were

elected at large for four-year terms. The County Commissioners' powers included budgeting,

levying taxes, issuing bonds, letting contracts for public works services, monitoring expenditures,

administering purchases, and making personnel decisions ..

8. The County Sanitary Engineer's Office was a division of the Engineer's Office

and was under the authority of the County Commissioners.

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9. The County Commissioners had authority to appropriate funds for the operations

of their own agencies and other elected County officials, including the County Auditor, County

Engineer, and the Cuyahoga County Common Pleas Court ("Common Pleas Court").

1 0. The Parma City School District ("PCSD") was a public school district located

within the County, which served the communities of Parma, Parma Heights and Seven Hills,

Ohio.

Public Officials and Employees

1 1 . James C. "Jimmy" Dimora ("Dimora") was an elected County Commissioner

from in or around 1 998 until on or about December 31, 20 1 0. His responsibilities included

budgeting, levying taxes, issuing bonds, letting contracts for public works services, monitoring

County expenditures, and administering all purchases for County use.

1 2. Frank P. Russo ("Russo") was the County Auditor, an elected County official ,

from in or around 1 998 until on or about September 9, 20 1 0. He was the County's chief fiscal

officer, with overall responsibility for all County funds. As the Auditor, Russo served as

secretary to the Board of Revision, which had responsibility to rule on property assessments and

hear valuation complaints, and as secretary to the Automatic Data Processing ("ADP") Board,

which reviewed information technology related purchases and contracts for the County. Russo

had the power to influence contracts and expenditures within the Auditor's Office and had

authority over personnel decisions within the Auditor' s Office.

1 3. John Kevin Kelley ("Kelley") was employed in various positions within County

government from approximately 1 998 through June 2009. In 2004, Kelley became the

Geographic Information Systems ("GIS") project manager. His salary was funded in equal parts

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by the budgets of the Engineer's Office, the Auditor's Office, and the County Commissioners.

From in or around January 2000 until in or around March 2009, Kelley served on the Parma City

School District Board of Education, an elected position. In both of those roles, Kelley had the

power to influence public policy, contracts and expenditures. In addition to his public

employment, in or around May 2003, Kelley created a consulting business, J. Kevin Kelley

Consulting, LLC. Kelley was the sole employee of J. Kevin Kelley Consulting, LLC.

14. Kevin F. Payne ("Payne")(now deceased), served as the Chief of Staff at the

Engineer's Office from in or around September 2002 to in or around February 2009. In that

capacity, Payne had the power to influence public policy, contracts and expenditures and to

oversee hiring and promotion in the Engineer' s Office. Payne was also responsible for

administrative matters at the County Sanitary Engineer's Office. Payne was Kelley's supervisor

at the Engineer' s Office.

Private Entities

1 5 . Alternatives Agency ("AA") was a non-profit organization that provided

treatment and rehabilitation services to post-incarceration indivic:Iuals in criminal cases who had

been ordered to receive such services. The funding AA received from the County was controlled,

in part, by the Cuyahoga County Corrections Planning Board, which fell under the auspices of

the Common Pleas Court. AA was located on East 55th Street in Cleveland, Ohio.

Other Individuals

16. Daniel P. Gallagher ("Gallagher") was employed in the Engineer's Office until he

retired in 2002. Thereafter, he served as a consultant, eventually forming a consulting company,

The Eagle Group ("Eagle"). Gallagher was the sole agent of Eagle Group.

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17. Brian Schuman ("Schuman") was an employee of AA in or around 2002, and

again from in or around 2006 to in or around 2009.

The Grand Jury further charges:

COUNT 1 ( 18 U .S.C. § 1 962( d) RICO Conspiracy)

18. Paragraphs 1 - 1 7 of this Indictment are re-alleged and incorporated by reference as

if fully set forth herein.

General Allegations

19. Business 9 was a construction company specializing in stone and brick masonry

located in Cleveland, Ohio. Business 9 was a client of Law Firm I.

20. Business 45 was a company that provided receivership services in state and

federal courts. In 2004, Business 45 was a client of Law Firm 1 .

The Enterprise

21. At all times material to this Indictment, ANTHONY 0. CALABRESE, III, John

Kevin Kelley and others known and unknown constituted an "Enterprise" as that .term is defined

in Title 18, United States Code, Section 1961 ( 4 ), in that, they were a group of individuals

associated in fact. The enterprise constituted an ongoing organization whose members

functioned as a continuing unit for a common purpose of achieving the objectives of the

enterprise. The enterprise engaged in, and its activities affected, interstate commerce.

22. Defendant ANTHONY 0. CALABRESE, III participated in the operation and

management of the Enterprise.

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Purposes of the Conspirators

23. The purposes of the defendant and other conspirators included the following:

A. Using the power and authority of public officials for the personal and

financial benefit of CALABRESE, his co-conspirators, and his designees.

B. Using the power and influence CALABRESE had as an attorney over his

clients and the clients of Law Firm 1 for the personal and financial benefit of CALABRESE, his

co-conspirators and his designees.

C. To promote, conceal and otherwise protect purposes (A) and (B) of the

conspirators from public exposure and possible criminal prosecution.

The Racketeering Conspiracy

24. Beginning in or around 200 1 and continuing to on or about February 2, 2009, the

exact dates unknown to the Grand Jury, in the Northern District of Ohio, Eastern Division, and

elsewhere, Defendant ANTHONY 0. CALABRESE, III, and John Kevin Kelley (not charged

herein) and others known and unknown to the Grand Jury, being persons associated with an

enterprise engaged in, and the activities of which affected, interstate commerce, namely, the

Enterprise, did knowingly and intentionally conspire with each other and others known and

unknown to the Grand Jury to violate Title 1 8, United States Code, Section 1 962( c), that is, to

conduct and participate, directly and indirectly, in the conduct of the affairs of the Enterprise

through a pattern of racketeering activity involving multiple acts indictable under the following

provisions of federal law:

A. 1 8 U.S.C. §§ 1 34 1 and 1 346 (Mail Fraud and Honest Services Mail Fraud);

B. 18 U .S.C. § 1 95 1 (Hobbs Act Extortion); and

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C. 1 8 U.S.C. § 1 5 1 2 (Obstruction of Justice)

and multiple acts involving bribery chargeable under Ohio Revised Code Section 292 1 .02.

25. It was part of the conspiracy that CALABRESE, Kelley and other conspirators

agreed that a conspirator would commit at least two acts of racketeering in conducting the affairs

of the Enterprise.

Means and Methods of the Enterprise

Among the means and methods by which the defendant and his associates agreed to

conduct and participate in the conduct of the affairs of the enterprise were the following:

26. CALABRESE gave and offered to give things of value to public officials and their

designees in return and in exchange for the public officials taking and promising to take official

action that benefitted CALABRESE, Law Firm 1 , their clients and designees.

27. CALABRESE did corrupt and sought to corrupt public officials and improperly

influence public officials with respect to the discharge of their official duties, by promising,

offering and giving things of value to public officials and their designees.

28 . Kelley and other public officials solicited and accepted from CALABRESE and

others things of value in return and in exchange for Kelley and other public officials taking,

promising to take, influencing and attempting to influence official action that benefitted

CALABRESE, Law Firm 1 , their clients and designees.

29. Kelley and other public officials used and agreed to use the powers of their public

offices to influence and attempt to influence private companies seeking or having public

business.

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30. CALABRESE used and agreed to use his position of trust as an attorney to

influence clients' decisions to benefit Law Firm 1, CALABRESE, and CALABRESE's

designees.

31. At times, CALABRESE served as an intermediary between a public official and

his clients with respect to giving and offering to give a thing of value to the public official.

32. CALABRESE used and caused to be used Law Firm 1 ' s resources for his personal

benefit and the benefit of his conspirators and designees.

33. CALABRESE and his conspirators used and caused to be used the United States

mail to send and deliver mail matter to advance the purposes of the racketeering activity.

34. The conspirators took steps to avoid detection, including using conduits and

intermediaries, speaking in code, making bribe payments in cash, and establishing shell

companies.

35. CALABRESE, Kelley, and other members of the conspiracy committed and

attempted to commit various acts in furtherance of the conspiracy, including the following:

A. Schemes Related to Factual Allegations in this Indictment

36. The facts more fully described, and incorporated herein, in the factual allegations

of Counts 2- 1 4 of this Indictment.

B. Alternatives Agency Property Tax Rebate Scheme

In furtherance of this scheme:

37. CALABRESE used his position as an attorney at Law Firm 1 to assist AA with

obtaining property tax exempt status for the property AA leased.

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38. In or around January 2004, CALABRESE asked Kelley if Kelley could assist in

AA obtaining tax exempt status on the property that AA leased.

39. Kelley agreed to assist AA in navigating the process through the Auditor' s Office

relating to AA' s property taxes.

40. Kelley agreed to assist AA in its appeal to the State of Ohio relating to AA's

property taxes.

4 1 . On or about July 1 5 , 2004, CALABRESE caused to be delivered via United States

mail to AA in Cleveland, Ohio, correspondence from the Ohio Department of Taxation,

providing notice that the Department of Taxation had vacated its previous determination relating

to AA' s property tax request.

42. On or about September 3 , 2004, CALABRESE caused to be delivered by the

United States mail, to AA in Cleveland, Ohio, correspondence from the Ohio Department of

Taxation, providing notice that the real property parcel numbers 1 04-29-004 and 1 04-20-0 1 0

were exempt from taxation, and further ordering that all taxes, penalties and interest paid for the

tax years 2002-2003 be remitted in the manner provided by law.

43. On or about September 20, 2004, Kelley collected the refund check issued to AA

valued at approximately $ 1 44,216.26, and CALABRESE drove Kelley to AA's office with the

check.

44. On or about September 20, 2004, Kelley gave the refund check to an agent of AA.

45 . On or about September 20, 2004, AA caused to be deposited the refund check.

46. On or about September 20, 2004, CALABRESE instructed BE39 to issue an AA

check payable to Business 45 in the amount of approximately $72,000. CALABRESE told BE39

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that he should classify the expense as consulting, despite CALABRESE knowing that Business

45 performed no consulting services for AA to justify that expense.

4 7. On or about September 20, 2004, CALABRESE caused AA to issue check no.

1 1 248, drawn on its financial account, payable to Business 45, for approximately $72,000.

48. On or about September 20, 2004, CALABRESE and Kelley delivered the AA

check issued to Business 45 to an agent of Business 45 .

49. On or about September 20, 2004, Business 45 issued check no. 1 1 37 drawn on its

financial account, payable to ANTHONY 0. CALABRESE, Ill, for approximately $3 1 ,500.

50. On or about September 20, 2004, Business 45 issued check no. 1 1 38 drawn on its

financial account, payable to J. Kevin Kelley Consulting, LLC for approximately $35,500.

5 1 . On or about September 20, 2004, Kelley caused to be negotiated the $35,500

check from Business 45 into a financial account of J. Kevin Kelley Consulting LLC.

52. On or about September 2 1 , 2004, CALABRESE caused to be negotiated the

$3 1 ,500 ·check from Business 45 .

53 . On or about September 2 1 , 2004, Business 45 caused to be deposited the $72,000

check from AA into Business 45 ' s financial account.

54. Business 45 kept the $5 ,000 remaining from the $72,000 check from AA.

Business 9 and Parma City School District Scheme

It was part of the scheme that:

55 . In or about early 2005, CALABRESE lobbied Kelley and other members of the

Parma School Board to contract with Business 9 to serve as a project manager for a renovation

project.

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56. In or around �he Summer of 2005, the Parma School Board, with Kelley voting in

favor, awarded a contract to Business 9 valued at approximately $ 1 .8 million.

57. Business 9 ' s contract contained an agreement that the PCSD would reimburse

Business 9 for advertising and public relations for a recently passed levy.

58. CALABRESE and Kelley arranged for Business 9 to hire Eagle, ostensibly to

perform the public relations portion of the construction management contract.

59. In or around August 2005, Business 9 received a payment from the PCSD on the

construction management contract.

60. Business 9 and Eagle sent and delivered items through the United States mail

related to a $ 1 5,000 payment from Business 9 to Eagle.

6 1 . On or about August 1 0, 2005, Business 9 sent a $ 1 5,000 check to Eagle, which

Gallagher caused to be negotiated.

62. Gallagher distributed a portion of the $ 1 5 ,000 to Payne and Kelley.

63. On or about September 8, 2005, Gallagher wrote a $2,500 check drawn on the

Eagle bank account to a third party vendor for preliminary design work for public relations

materials for the PCSD.

All in violation of Title 1 8, United States Code, Section 1 962( d).

The Grand Jury further charges :

COUNT 2 (Conspiracy to Commit Mail Fraud and Honest Services Mail Fraud,

1 8 U.S.C. §§ 1 34 1 and 1 346, in violation of 1 8 U.S.C. § 1 349)

64. Paragraphs I , 6, 7, 9, 11-13 , 15 and 17 of this Indictment are re-alleged and

incorporated by reference as if fully set forth herein.

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65. Public Employee 1 1 ("PE II ") was a County employee who reported to Dimora.

66. Public Employee 1 3 ("PE1 3") was an employee of the County Commissioners'

Office with management and policy responsibilities.

67. Public Employee 23 ("PE23") was appointed by the County Commissioners as the

County's chief operating officer. PE23 served in that role until in or around July 2008.

68. Public Employee 55 ("PE55") was Russo's domestic partner.

THE CONSPIRACY

69. From in or around November 2007 through on or about January 20, 2009, the

exact dates being unknown to the Grand Jury, in the Northern District of Ohio, Eastern Division

and elsewhere, Defendant ANTHONY 0. CALABRESE, III, and James C. Dimora (not charged

herein), Frank P. Russo (not charged herein), John Kevin Kelley (not charged herein), Brian

Schuman (not charged herein), and others known and unknown to the Grand Jury, did knowingly

and intentionally combine, conspire, confederate and agree with each other to commit offenses

against the United States; that is, to knowingly devise and intend to devise a scheme and artifice:

( 1 ) to defraud and deprive Cuyahoga County and its citizens of their right to the honest

and faithful services of Dim ora, through bribery and kickbacks and the concealment of

material information related thereto, and

(2) to defraud Cuyahoga County and to obtain money and property by means of materially

false and fraudulent pretenses, representations and promises,

and for the purpose of executing such scheme and artifice, to cause matters to be placed in any

post office and authorized depository for mail matter to be sent and delivered by the United

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States Postal Service and private and commercial interstate carrier, in violation of Title 1 8,

United States Code, Sections 1 34 1 and 1 346.

OBJECT OF THE CONSPIRACY

70. It was the object of the conspiracy that Dimora, with Russo's assistance, secretly

used his official position to enrich himself, Russo, and their designees by soliciting and accepting

gifts, payments, and other things of value from AA, in exchange for favorable official action, and

that AA, through CALABRESE, Kelley and Schuman, enriched itself by secretly obtaining

favorable official action for itself through corrupt means.

MANNER AND MEANS

It was part of the conspiracy that :

7 1 . Dimora and Russo solicited and accepted gifts, payments, and other things of

value from AA, including meals and travel from Cleveland to Las Vegas for Dimora, Russo and

PE55 .

72. Dimora, with Russo's assistance, provided favorable official action for the benefit

of AA both as requested and·as future opportunities arose.

73 . The conspirators took steps to hide, conceal, and cover up their activity and the

nature and scope of AA' s dealings with Dim ora.

Acts in furtherance of the conspiracy

74. In or around November 2007, after County Probation Department officials told

Schuman that the County intended to eliminate its contract with AA for 2008, Schuman and

CALABRESE asked Kelley to help restore AA's funding.

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75 . Kelley asked Russo and Dimora to assist in restoring AA's funding and in

obtaining additional funding.

76. Kelley received money from AA for his role in obtaining Russo's and Dimora's

assistance.

77. In or around December 2007, Russo and Dim ora each talked to other public

employees with responsibility and influence over the funding.

78. On or about December 2 1 , 2007 at approximately 1 2 :4 1 p.m., Kelley informed

CALABRESE �e had good news regarding AA. Kelley indicated that PE 13 told Russo that the

County was re-working the budget, and AA would be back in the budget. Kelley then instructed

CALABRESE to call and thank Russo. CALABRESE agreed and said, "You and I need to get

together on this too, you know what I mean."

79. On or about December 2 1 , 2007 at approximately 1 :08 p.m., Kelley told Schuman

that a County employee called Russo and Dimora, telling them that a funding mechanism was in

place to reinstate AA in the County budget. Kelley said that Russo was not given an exact

number, but PE 13 told Russo things "look good" for AA. Kelley emphasized the importance of

AA receiving a budget allocation, because after the budget was in place, Dimora and Russo could

influence other County employees to increase AA's allocation after the Health and Human

Services levy passed.

80. On or about January 4, 2008, Schuman asked Kelley if there were any

developments. Kelley said he received a verbal commitment that AA was allocated $400,000

towards 2008, and they were waiting for the paperwork. Schuman replied, "That's f---ing

beautiful ." Kelley explained that there would be two County funding sources, and the County

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might make up the difference through the halfway house initiative. Kelley told Schuman that

Dimora had informed Kelley to keep the billing up until the budget allocation was spent, and

then Dimora would find more money once the Health and Human Services levy passed. Kelley

said that AA might actually receive more money than it had the prior year. Again, Schuman

responded, "That's f---ing beautiful." Kelley told Schuman that Kelley heard about the funding

decision from Russo. Kelley ended the conversation by commenting that he always tells people,

"Loyalty makes up for brains any day."

8 1 . On or about January 1 1 , 2008, Kelley told CALABRESE that AA was allocated

$250,000 because AA had only used $500,000 the previous year even though it was budgeted for

$600,000. Kelley and CALABRESE agreed it would be easier for the County to amend and add

money in the future, once AA was included in the budget. Kelley said that he was on his way to

AA ·because Kelley just had a meeting with Russo, who was "very clear on what his thoughts

were." CALABRESE replied, "Understood." CALABRESE and Kelley agreed to meet the

following Monday. Kelley then stated, "I'm just gonna, you know, ah, be coy about it with these

guys, but they gotta, you know, it's one thing to hold me back a couple, you know."

CALABRESE replied, "I understand," and inquired whether "the two boys on 55 [referring to

AA located on E. 55'h Street]" would know about it before Kelley and he met. Kelley said he

was on his way to meet with them.

82. On or about January 1 6, 2008, Schuman asked Kelley, "How did everything go on

Thursday? Did they sign their budget?" Kelley responded, "No they didn't, but it doesn't

matter." Kelley continued, HYou' re in the thing, so it' s just, but it's not official until they

approve it." Kelley added, "But, you know, they're not gonna pull it out." Schuman asked if

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"they're the only one that can do anything with it." Kelley responded, "The only one that can

take it out is the Commissioners." Schuman replied, "Okay, good." Kelley continued, "And

we've got two of them on our side on the issue."

83 . In or around January 2008, CALABRESE instructed Schuman to increase

Kelley's monthly fee by $2,000 for four months for the purpose of funding expenses associated

with a Las Vegas trip for Dimora, Russo and PESS .

84. Schuman concealed the bribe payment from others at AA by recording the $2,000

increase in AA' s books as an increase in Kelley's monthly consulting fee.

85 . On or about February 1 3 , 2008, Schuman, another AA employee, and Kelley met

for lunch at Delmonico's restaurant in Independence, Ohio. During that meal, Dimora called

Kelley, and Kelley said that he was having lunch with Schuman and another AA employee.

Kelley said, "Yeah, that thing's on your agenda tomorrow for their money." Dimora asked,

"Yeah, give them more, you mean, or take it away?" Kelley responded, "No to give 'em back

some of their, what you stole from them." Dimora laughed and said, "I don't wanna know what

you get out of this, I don't even wanna f--ing know." Kelley replied, "I get nothing out of this,"

to which Dimora responded, "I don't even wanna know . . . . The less I know the better." Kelley

responded, "Really. The less you know the better is right." Kelley added, "Speaking of that . . .

ah, Vegas." Kelley and Dimora then discussed reservations for their upcoming trip to Las Vegas.

86. On or about February 1 4, 2008, the County Commissioners, with Dimora voting

in favor, approved a $250,000 allocation for Residential Facilities for the Work Release Program

for the period May 1 , 2008 through December 3 1, 2008, and authorized the Office of

Procurement & Diversity to advertise for bids.

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87. On or about February 22, 2008, Schuman told Kelley that another halfway house

met with PE 1 3 regarding the Sherifr s l ine item. PE 1 3 was going to meet with another County

employee, who would take it to Dimora. Schuman asked Kelley to schedule a meeting with the

other halfway house and Dimora to discuss the idea. Schuman said, "They know we got the

juice, now let's just f-in' shove it down their face."

88. On or about March 6, 2008, Kelley and Dimora discussed the meeting with AA

and the other halfway house.

89. On or about March 6, 2008, Dimora met Kelley, Schuman and others for dinner at

Delmonico' s restaurant and discussed public funding for AA .

90. On or about March 20, 2008, Kelley and Schuman discussed a recent meeting that

Dimora had with County court officials to promote AA. Schuman told Kelley it went well,

explaining Dim ora had everyone in the room. Schuman, as Kelley predicted, "didn't say two

words. Dimora took the lead on the meeting," talking about what he thought and why it was a

good idea. Schuman said the other halfway houses know we have the "f--ing juice. We got him

in the room."

9 1 . On or about March 25, 2008, Dimora and PE23 discussed the halfway house

initiative and the upcoming judges' meeting. Dimora said, "I ' ll go and tell 'em judges . . . my

colleagues agree about saving money and, ya know, basically we just gotta convince these judges

if there's some that are skeptical that it's safe to house prisoners there. That they don't have to

worry about 'em escaping." Dimora continued, "So I just wanna make sure we don't let the thing

fall through the cracks that we follow up and get . . . the meeting date when they're gonna have

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the judges together, that's what [POlS] said . . . I'll have you guys come and those halfway

house people come to talk to the judges."

92. Kelley used the additional funds he received from AA to purchase first class

airfare aboard Continental Airlines for Russo, PE55, and Dimora, at a cost of approximately

$ 1 ,268.50 per ticket.

93 . On or about April 2, 2008, Dimora and Kelley discussed the flight arrangements

for the Las Vegas trip. Dimora asked Kelley, "How much is that ticket? Frank [Russo] and I,

'cause I don't want to have no headaches with the tickets." Kelley replied, "Ok, I'll talk to, to

you tonight." Dimora replied, "I'll have to bring a check with me, ya hear?'' Kelley replied,

"Yeah, I hear you one hundred percent, and I'll take care of that, ok?" Dimora replied, "Alright,

alright." Kelley stated, '"Cause, ah, you know, you know what I am sayin' ." Dimora replied,

"We' ll talk about it."

94. Dimora and Russo each gave Kelley a check to cover the cost of the airline ticket.

Russo's check did not include payment for PE55's ticket. Upon receiving the checks from Russo

and Dim ora, Kelley gave them back cash in the approximate amount of the check each had given

to Kelley.

95. On or about April 6, 2008, Kelley telephoned Schuman and said, "Hey, we're

heading out now [on the Las Vegas trip] . The guys [Dimora and Russo] wanted me to call and

thank you." Schuman replied, "Oh, I hope everybody has a good time."

96. On or about April 6, 2008, Kelley, Dimora, Russo, and PE55 boarded a

Continental Airlines flight from Cleveland to Las Vegas.

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97. On or about April 7, 2008 at approximately 7:56 a.m., Kelley, while in Las Vegas,

had a conversation with his wife about what he and the others were doing in Las Vegas. .Kelley

also explained how Ferris Kleem was paying for everything in Las Vegas, including the hotel

rooms, for Dimora and Russo. Kelley described to his wife how Kleem' s presence in Las Vegas

being there was a benefit to him because Kelley was expected to pay for the hotel rooms for

Dimora and Russo with the extra money he had been given by Alternative Agency.

98. On or about April 9, 2008, Schuman asked Kelley if he was back in town. Kelley

confirmed he flew from Las Vegas on "the red eye" the previous night. Schuman then said,

"Come on down to the Agency tomorrow. I got the rest of your money." Kelley replied, "Oh

beautiful. I appreciate it sir."

99. On or about April 14, 2008, Kelley and Schuman discussed the Las Vegas trip.

Schuman then confirmed that Kelley had picked up his check from AA and inquired, "We're all

square right?" Kelley explained that one month remained at the increased rate before returning

to the regular rate.

1 00. On or about Aprill4, 2008, Dimora told PE1 1 that he wanted to know when the

meeting about the halfway houses, which was originally scheduled for April 8 but was canceled,

was taking place. Dimora told PE 1 1 he wanted to put the new date on his (Dimora's) schedule

'"cause I wanted to go to it . . . and this way I can pass it on to those halfway house people."

Dimora said a judge arranged the meeting through another County employee and, "I don't want

to miss it."

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I 0 I. On or about April 1 7, 2008, the County Commissioners, with Dim ora voting in

favor, approved a $250,000 contract with AA for residential facilities for the work release

program.

I 02. On or about April 22, 2008, Schuman and Kelley discussed AA receiving the

County contract.

I 03 . On or about May 1 2, 2008, PE23 told Dim ora that the meeting with the halfway

houses at:id the Court was scheduled the following day at 1 2 :30. Dimora explained that he will

say that the judges were overlooking halfway houses as an alternative to jail .

1 04. On or about May 1 3, 2008, Kelley told Schuman that they were confirmed for

Thursday at Delmonico's restaurant. Kelley wanted to start working on the Sheriffs line item

and suggested that they discuss it Thursday. Kelley told Schuman that he would pick up his

consulting check from AA so that he could pay for Thursday' s dinner.

EXECUTION OF THE SCHEME

I 05 . On or about the dates listed below, in the Northern District of Ohio and elsewhere,

Dimora, Russo, Kelley, Schuman, CALABRESE and others, for the purpose of executing the

above-described scheme and artifice, caused documents to be delivered and sent through the

United States mail, including invoices from AA in Cleveland, Ohio, to the County in Cleveland,

Ohio, and payments from the County to AA in satisfaction of those invoices, including the

following:

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Date Description Approximate Amount

May 1 9, 2008 Check from the County in $4,705 .30 Cleveland, OH, to AA in Cleveland, OH, for April 2008 Work Release

June 1 9, 2008 Check from the County in $ 1 5,78 1 .29 Cleveland, OH, to AA in Cleveland, OH, for May 2008 Work Release

July 1 7, 2008 Check from the County in $24, 1 1 3 .56 Cleveland, OH, to AA in Cleveland, OH, for June 2008 Work Release

August 1 4, 2008 Check from the County in $28,593 .44 Cleveland, OH, to AA in Cleveland, OH, for July 2008 Work Release

September 25 , 2008 Check from the County in $39,8 1 3 .97 Cleveland, OH, to AA in Cleveland, OH, for August 2008 Work Release

October 27, 2008 Check from the County in $47,974. 1 7 Cleveland, OH, to AA in Cleveland, OH, for September 2008 Work Release

November 20, 2008 Check from the County in $49,3 82.63 Cleveland, OH, to AA in Cleveland, OH, for October 2008 Work Release

December 1 5 , 2008 Check from the County in $41 ,555 . 1 4 Cleveland, OH, to AA in Cleveland, OH, for November 2008 Work Release

2 1


January 20, 2009 Check from the County in $2,785 .80 Cleveland, OH, to AA in Cleveland, OH, for December 2008 Work Release

All in violation of Title 1 8, United States Code, Section 1 349.


COUNT 3 (Hobbs Act Conspiracy, 1 8 U.S.C. §§ 1 95 1 and 2)

1 06. Paragraphs 1 , 6, 7, 9, 1 1 - 1 3, 1 5, 1 7, and 71 of this Indictment are re-alleged and


At all times relevant to this Count of the Indictment:

I 07. The operations of the County and the Common Pleas Court affected interstate

commerce.

1 08 . The operations of AA affected interstate commerce.

CONSPIRACY

1 09. Beginning in or around November 2007 and continuing until in or around May

2008, the exact dates being unknown to the Grand Jury, in the Northern District of Ohio, Eastern

Division and elsewhere., Defendant ANTHONY 0. CALABRESE, III, and James C. Dimora (not

charged herein), Frank P. Russo (not charged herein), John Kevin Kelley (not charged herein),

Brian Schuman (not charged herein) and others known and unknown to the Grand Jury, did

knowingly and intentionally combine, conspire, confederate and agree with each other to

obstruct, delay and affect commerce and the movement of articles and commodities in commerce

by extortion; that is, Dimora obtained property not due to him or his office, namely, travel from

22


Cleveland, Ohio, to Las Vegas, Nevada, for Dimora, Russo, and PE55, and a Delmonico' s

restaurant dinner party valued at approximately $826, from AA, with its consent, under color of

official right.

All in violation of Title 1 8, United States Code, Sections 1 95 1 and 2.


COUNT 4 (Bribery Concerning Programs Receiving Federal Funds, 1 8 U.S .C. §§ 666(a)(2) and 2)

1 1 0. Paragraphs I, 6, 7, 9, 1 1 - 1 3 , 1 5 and 1 7 of this Indictment are re-alleged and


1 1 1 . At all times relevant, the County was a government agency as that term is defined

in Title 1 8, United States Code, Section 666( d)(2). The County received benefits in excess of

$ 1 0,000 during the one year period November 1 , 2007 through October 3 1 , 2008, under a Federal

program involving a grant, contract, subsidy, loan, guarantee, insurance and other form of

Federal assistance.

1 1 2. Dim ora and Russo were agents of the County as defined in Title 1 8, Section

666( d)( 1 ), United States Code.

The Scheme

1 1 3 . Beginning in or around November 2007 and continuing until in or around May


Division .and elsewhere, Defendant ANTHONY 0. CALABRESE, III and John Kevin Kelley

(not charged herein), Brian Schuman (not charged herein), Alternatives Agency (not charged

herein), and others known and unknown to the Grand Jury, aiding and abetting one another, did

23

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corruptly give, offer, and agree to give anything of value to any person, with intent to influence

and reward County Commissioner James C. Dimora (not charged herein) and Frank P. Russo

(not charged herein), both agents of the County, in connection with any business, transaction and

series of transactions of the County involving any thing of value of $5,000 or more; namely,

County funding valued at approximately $250,000 for AA.

All in violation of Title 1 8, United States Code, Sections 666(a)(2) and 2 .

The Grand Jury further charges: COUNT S

(Conspiracy to Commit Mail Fraud, 1 8 U.S.C. § 1 34 1 , in violation of 1 8 U.S.C. § 1 349)

1 1 4. Paragraphs 1 -5, 1 3 , 1 5 and 17 of this Indictment are realleged and fully

incorporated herein.


1 1 5 . AA was governed by a Board of Directors.

1 1 6. The Board of Directors for AA retained CALABRESE and Law Firm 1 as its legal

counsel.

1 1 7 . Business Executive or Employee 39 ("BE39") was an employee of AA until in or

around 2006.

1 1 8 . A.C. Sinagra and Associates was a lobbying and consulting company formed by

Anthony C. Sinagra in or around January of 1 995.

1 1 9. Anthony C. Sinagra was a principal of A.C. Sinagra and Associates. Before

forming the company, �inagra served as the Mayor of Lakewood, Ohio and as a member of The

Ohio Senate. Sinagra was also a partner in the law firm A. C. Sinagra & Company, LPA.

1 20. Relative I was CALABRESE's relative and the registered agent for Business 43 .

24

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1 2 1 . Relative 2 was related to PRUDOFF' s girlfriend.

THE CONSPIRACY

1 22. From in or about January 2002, and continuing through on or about August 4,


Division, Defendants ANTHONY 0. CALABRESE, III, and SANFORD A. PRUDOFF, and

John Kevin Kelley (not charged herein), Anthony Sinagra (not charged herein), and others known

and unknown to the Grand Jury, did knowingly and intentionally combine, conspire, confederate

and agree with each other to commit an offense against the United States, namely, to devise and

intend to devise a scheme and artifice to defraud AA of money and property and to obtain money

and property by means of materially false and fraudulent pretenses, representations and promises,



States Postal Service, in violation of Title 1 8, United States Code, Section 1 34 1 .

OBJECTS OF THE CONSPIRACY

1 23 . It was an object o f the conspiracy that CALABRESE abused his position and

professional relationship with AA by influencing AA to hire and retain consultants at high fees,

which consultants would in tum use those funds to benefit CALABRESE and his designees on

matters unrelated to AA.

1 24. It was a further object of the conspiracy that CALABRESE and others concealed

and attempted to conceal the identities of the ultimate recipients of AA' s funds.

25


MANNER AND MEANS

It was part of the conspiracy that:

AA.

1 25. CALABRESE influenced AA in hiring consultants for the purported benefit of

1 26. CALABRESE influenced AA in establishing the consultants' fees.

1 27. CALABRESE knew that the consultants performed l ittle, if any, actual work for

AA, yet continued to influence AA to retain the consultants.

1 28 . CALABRESE made material misrepresentations to AA about the work performed

by the consultants.

1 29. CALABRESE concealed and attempted to conceal from certain members of the

AA's Board of Directors the number of consultants retained.

1 30. CALABRESE concealed and attempted to conceal from certain members of AA's

Board of Directors the fact that the consultants performed little, if any, actual work for AA.

1 3 1 . CALABRESE concealed and attempted to conceal from certain members of AA' s

Board of Directors the fact that CALABRESE and his designees received a personal benefit from

the consultants.

1 32. One effect of the conspiracy was that AA had fewer resources with which to serve

its clients.

Acts in furtherance of the conspiracy primarily related to PRUDOFF and AA

1 33. In or around 2003 , PRUDOFF began receiving payments from AA on an

approximately monthly basis, purportedly for consulting work.

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I 34. When BE39 informed CALABRESE that AA had received no work product from

PRUDOFF, CALABRESE told BE39 that PRUDOFF was consulting on a Lorain expansion

project. BE39 questioned why AA was paying PRUDOFF, since he was the Community

Development Director for Lorain and it would be within his job requirements to assist companies

such as AA, who were interested in developing facilities in Lorain. CALABRESE insisted that

BE39 continue to cause AA to pay PRUDOFF.

I 3 5 . CALABRESE did not inform the AA Board about payments for consultants on a

Lorain expansion project and the Board did not approve payments to any such consultant.

1 36. In or around June 2005, CALABRESE told BE39 that PRUDOFF had some

issues arise and that BE39 should issue PRUDOFF's monthly payments to Relative 2 .

1 37. In or around July 2005, CALABRESE and PRUDOFF assisted Relative 2 in

forming Business 46.

1 38. On or about July I 8, 2005, CALABRESE caused to be drafted a letter to

PRUDOFF, enclosing two sets of the agreement with AA to return for BE39's counter execution

and instructing PRUDOFF to have Relative 2 process paperwork to form Business 46.

1 39. On or about July 25, 2005, AA began issuing checks to Business 46 for

approximately $4,000, on an approximately monthly basis, which continued until on or about

March 24, 2006.

1 40. On or about August 1, 2005, AA entered into an Independent Contractor

Agreement with Business 46, establishing a fee of approximately $4,000 per month.

27


1 4 1 . PRUDOFF provided favorable consideration to CALABRESE and his designees

on business matters unrelated to AA, in return and in exchange for the consulting fees that

CALABRESE caused PRUDOFF and Business 46 to receive from AA.

1 42. Neither CALABRESE, nor PRUDOFF, nor Relative 2 disclosed to AA the fact

that PRUDOFF provided such favorable consideration to CALABRESE on non-AA matters.

1 43 . Neither CALABRESE, nor PRUDOFF, nor Relative 2 disclosed to AA the fact

that PRUDOFF and Relative 2 performed little to no work to justify the fees paid by AA .

Acts in furtherance of the conspiracy primarily related to Business 43 and AA

1 44. On or about March 3 1 , 2005, Business 43 was incorporated in the State of Ohio.

1 45. On or about March 3 1 , 2005, CALABRESE influenced AA to engage Business

43 's services.

146. On or about March 3 1 , 2005 , CALABRESE instructed BE39 to make a $950

check payable on the first of each month to Business 43 , in Brecksville, Ohio. CALABRESE

informed BE39 that an invoice for April would be forthcoming.

1 47. On or about March 3 1 , 2005, AA received an invoice from Business 43 for

approximately $950 for purported consulting and marketing services performed in March 2005 .

1 48. On or about March 3 1 , 2005, AA sent a check to Business 43 for approximately

$950 as payment on the March 3 1 , 2005 invoice.

1 49. On or about April 2 1 , 2005, AA received an invoice from Business 43 for $950

for purported consulting and marketing services performed in April 2005.

I 50. On or about April 28, 2005, AA sent a check to Business 43 for approximately

$950 as payment on the invoiced AA received on April 2 1 , 2005 .

28


1 5 1 . On or about March 24, 2006, AA sent a check to Business 43 for approximately

$ 1 , 1 50, which was the last payment made directly from AA to Business 43 .

1 52. CALABRESE concealed from AA his relative' s relationship to Business 43 .

1 53 . Neither CALABRESE, nor Relative I disclosed to AA that Relative 1 performed

little to no work for AA to justify the fees paid.

Acts in furtherance of the conspiracy primarily related to Sinagra and AA

1 54. In or around January 2002, CALABRESE influenced AA to hire A.C. Sinagra and

Associates.

1 55 . On or about January 1 , 2006, A.C. Sinagra and Associates and AA entered into a

contract setting a monthly consulting fee at approximately $ 1 ,500.

1 56. In or around March 2006, CALABRESE and Sinagra agreed that CALABRESE

would cause AA to increase its payments to A. C. Sinagra and Associates, and Sinagra would use

the additional funds to pay persons or entities identified by CALABRESE in the amounts

CALABRESE designated.

1 57 . CALABRESE first suggested that Sinagra make consulting payments to Relative

1 , through Business 43 . When Sinagra asked to meet Relative 1 , CALABRESE asked Sinagra to

pay CALABRESE through Burlwood Holdings, instead. CALABRESE also asked Sinagra to

pay Relative 2. Sinagra agreed to both requests.

fee.

1 58. Sinagra performed no legitimate work for AA to justify the increase in Sinagra's

I 59. Neither CALABRESE nor Sinagra disclosed to AA that Sinagra performed no

legitimate work for AA to justify the increase in Sinagra's fee.

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1 60. On or about April 28, 2006, A. C. Sinagra and Associates issued an invoice to AA

for $6,000.

1 6 1 . On or about May 4, 2006, AA sent a check to A.C. S inagra and Associates in the

amount of approximately $6,000, for payment on the April 28, 2006 invoice.

1 62. On or about May 1 2, 2006, Sinagra caused to be sent a letter to CALABRESE

enclosing two signed copies of a contract between AC Sinagra and Associates and AA, which

increased A. C. Sinagra and Associates' s monthly fees from approximately $ 1 ,500 to

approximately $6,000.

1 63 . On or about May 1 2, 2006, A.C. Sinagra Company, LPA issued a check for

approximately $2,000 to Relative 2, which was sent via United States mail .

1 64. On or about May 22, 2006, A.C. Sinagra Company LP A issued a check for

approximately $2,000 to Berlwood (sic) Holdings, which CALABRESE caused to be negotiated.

1 65 . On or about May 30, 2006, A. C. Sinagra and Associates issued an invoice to AA

for $6,000.

1 66. On or about June 1 6, 2006, AA issued a check to A.C. Sinagra and Associates in

the amount of approximately $6,000, for payment on the May invoice.

1 67. On or about June 20, 2006, A.C. Sinagra Company LPA issued a check for


1 68 . On or about June 20, 2006, A.C. Sinagra Company, LPA issued a check for

approximately $2,000 to Relative 2, which was sent via United States mail.

169. On or about June 26, 2006, A. C. Sinagra and Associates issued an invoice to AA

for $6,000.

30


1 70. On or about July 6, 2006, AA issued a check to A.C. Sinagra and Associates in

the amount of approximately $ 6,000, for payment on the June invoice.

171. On or about July 7, 2006, A.C. Sinagra Company LP A issued a check for

approximately $ 2,000 to Berlwood (sic) Holdings, which CALABRESE caused to be negotiated.

1 72. On or about July 7, 2006, A.C. Sinagra Company, LPA issued a check for

approximately $2,000 to Relative 2 which was sent via United States mail.

1 73 . On or about July 2 1 , 2006, A.C. Sinagra and Associates issued an invoice to AA

for $ 6,000.

1 74. On or about August 1 6, 2006, AA issued a check to A. C. Sinagra and Associates

in the amount of approximately $6,000, for payment on the July invoice.

1 75. On or about August 23, 2006, A.C. Sinagra Company LPA issued a check for

approximately $ 2,000 to Berlwood (sic) Hol�ings, which CALABRESE caused to be negotiated.

1 76. On or about August 23, 2006, A. C. Sinagra Company, LPA issued a check for

approximately $ 2,000 to Relative 2, which was sent via United States mail.

1 77 . On or about August 25 , 2006 and on or about September 29, 2006, A.C. Sinagra

and Associates issued an invoice to AA for $6,000 each.

178. On or about October 24, 2006, A. C. Sinagra and Associates received three checks

from AA for approximately $6,000 each, as payment on previously issued invoices. Two checks

were dated on or about October 20, 2006 and the third check was dated on or about October 23,

2006.

179. On or about October 27, 2006, A.C. Sinagra Company LPA issued a check for

approximately $ 8,000 to Berlwood (sic) Holdings, which CALABRESE caused to be negotiated.

3 1


1 80. On or about November 1 0, 2006, A.C. Sinagra Company LPA issued a check for

approximately $4,000 to Burlwood Holdings, which CALABRESE caused to be negotiated.

1 8 1 . Neither Burlwood, nor Relative 2 performed work for A.C. Sinagra and

Associates or A.C. Sinagra Company LPA.

1 82 . Neither CALABRESE nor Sinagra disclosed to AA that .Sinagra, through, A.C.

Sinagra Company LPA, made payments to Berlwood (sic) and Relative 2.

1 83 . In or around 2006, Kelley told CALABRESE that Kelley had received complaints

from AA employees about consulting payments that AA was making to Sinagra and the fact that

Sinagra' s work did not justify the amount of monthly consulting fees paid to S inagra.

CALABRESE instructed Kelley to speak favorably of Sinagra to these AA employees,

explaining to Kelley that Sinagra was paying a portion of his monthly consulting fee to

Relative 1 .

Acts in furtherance of the conspiracy primarily related to Kelley and AA

1 84 . In or about October 2004, CALABRESE influenced AA to hire J . Kevin Kelley

Consulting as a consultant and paid it a monthly fee of approximately $900 per month plus

expenses.

1 85 . In or around August 2005, CALABRESE told Kelley to increase his monthly fee

to approximately $4,900.

1 86. CALABRESE instructed Kelley to include on the invoice to AA that Kelley had

performed work for AA in Lorain.

1 87. Kelley performed no work for AA in Lorain.

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1 88 . In August of 2005 , CALABRESE caused AA to increase J . Kevin Kelley

Consulting' s fee to approximately $4,900 per month, plus expenses.

1 89. Kelley did not produce any written work product to AA, and he performed little

actual work for AA.

1 90. Neither Kelley, nor CALABRESE disclosed to AA that J. Kevin Kelley

Consulting performed no work for AA in Lorain and did not perform work for AA to justify the

increase in fee.

1 9 1 . Kelley provided favorable consideration to CALABRESE and his designess on

business matters unrelated to AA, in return and in exchange for the consulting fees

CALABRESE caused J. Kevin Kelley Consulting to receive from AA.

1 92. Neither CALABRESE nor Kelley disclosed to AA the fact that Kelley provided

such favorable consideration to CALABRESE on non-AA matters .

Total payments to consultants

1 93. In total, from on or about July 24, 2003 through on or about March 24, 2006,

CALABRESE caused AA to make payments to PRUDOFF and Relative 2 of approximately

$ 1 44,000 .

1 94. In total, from on or about March 3 1 , 2005 through on or about March 24, 2006,

CALABRESE caused AA to make payments to Business 43 of approximately $ 1 2,950.

1 95 . In total, from in or around January 2002 through on or about November 8 , 2007,

CALABRESE caused AA to make payments to A. C . Sinagra and Associates of approximately

$ 1 90,500.

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1 96. In total, from in or around October 2004 through on or about August 4, 2008,

CALABRESE caused AA to make payments to J. Kevin Kelley Consulting of approximately

$20 1 ,473 .

Use of the U.S. Mail

1 97. On a regular basis and on numerous occasions from in or around January 2002

through on or about August 4, 2008, CALABRESE, Sinagra, PRUDOFF and others executed and

attempted to execute the scheme and artifice set forth above by causing matters and things to be

sent and delivered by the United States Postal Service, according to the directions thereon within

the Northern District of Ohio, including:

( 1 ) invoices from purported consultants to AA in Cleveland, Ohio, including invoices

sent from A. C. Sinagra and Associates in Lakewood, Ohio to AA in Cleveland, Ohio on or about

January 3 1 , 2007, March 1 4, 2007, and August 30, 2007;

(2) AA's checks remitting payment on consultants' invoices, including payments on A.C.

Sinagra and Associates invoices sent from AA in Cleveland, Ohio to A. C. S inagra and

Associates in Lakewood, Ohio on or about October 20, 2006, October 23, 2006, January 30,

2007, April 24, 2007, and August 20, 2007;

(3) checks from A.C. Sinagra Company LPA in Lakewood, Ohio sent to Burlwood

Holdings on or about August 23, 2006, October 24, 2006, and November 1 0, 2006;

(4) a check from A. C. Sinagra Company LPA in Lakewood, Ohio sent to Relative 2 on or

about August 23, 2006;

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(5) checks from AA in Cleveland, Ohio to Business 43 on or about the following dates:

March 3 1 , 2005, "April 28, 2005, January 27, 2006, February 24, 2006 and March 24, 2006.

All in violation of Title I 8, United States Code, Section 1 349.


COUNTS 6-8 (Mail Fraud, in violation of 1 8 U.S .C. §§ 1 34 1 and 2)


1 98 . Paragraphs 1 -4, 1 3 , 1 5, 1 1 5 , 1 1 6, 1 1 8, 1 1 9 and 1 2 1 ofthis lndictment are re-

alleged and incorporated by reference as if fully set forth herein.

The Scheme

1 99. From in or around March 2006, and continuing through on or about November 1 0,

2006, in the Northern District of Ohio, Eastern Division, Defendant ANTHONY 0.

CALABRESE, III, and Anthony Sinagra (not charged herein), and others known and unknown to

the Grand Jury, did devise and intend to devise a scheme and artifice to defraud Alternatives

Agency of money and property and to obtain money and property by means of materially false

and fraudulent pretenses, representations, and promises.

It was part of the scheme that:

200. On or about January 1 , 2006, A. C. Sinagra and Associates and AA entered into a

contract setting a monthly consulting fee at approximately $ 1 ,500.

20 I . In or around March 2006, CALABRESE and Sinagra agreed that CALABRESE

would cause AA to increase its payments to A. C. Sinagra and Associates, and Sinagra would use

35


the additional funds to pay persons or entities identified by CALABRESE in the amounts

CALABRESE designated.

202. CALABRESE asked Sinagra to pay CALABRESE, through Burlwood Holdings,

and further asked Sinagra to pay Relative 2. Sinagra agreed to both requests.

203 . Sinagra did not perform additional work for AA to justify the increased fee.

204. Neither CALABRESE nor Sinagra disclosed to AA that Sinagra performed no

legitimate work for AA to justify the increased fee.

205 . On or about April 28, 2006, A.C. Sinagra and Associates issued an invoice to AA

for $6,000.

206. On or about May 4, 2006, AA sent a check to A. C. Sinagra and Associates in the

amount of approximately $6,000, for payment on the April invoice.

207. On or about May 1 2, 2006, A.C. Sinagra Company LPA issued a check for


208. On or about May 22, 2006, A. C. Sinagra Company LPA issued a check for


209. On or about May 30, 2006, A. C. Sinagra and Associates issued an invoice to AA

for $6,000.

2 1.0. On or about June 1 6, 2006, AA issued a check to A.C. Sinagra and Associates in

the amount of approximately $6,000, for payment on the May invoice.

2 1 1 . On or about June 20, 2006, A.C. Sinagra Company LP A issued a check for


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2 1 2. On or about June 20, 2006, A.C. Sinagra Company LPA issued a check for


2 1 3 . On or about June 26, 2006, A.C. Sinagra and Associates issued an invoice to AA

for $6,000.

2 1 4. On or about July 6, 2006, AA issued a check to A. C. Sinagra and Associates in

the amount of approximately $6,000, for payment on the June invoice.

2 1 5 . On or about July 7, 2006, A.C. Sinagra Company LPA issued a check for


2 1 6. On or about July 7, 2006, A.C. Sinagra Company LPA issued a check for


2 1 7. On or about July 2 1 , 2006, A. C. Sinagra and Associates issued an invoice to AA

for $6,000.

2 1 8. On or about August 1 6, 2006, AA issued a check to A. C . Sinagra and Associates

in the amount of approximately $6,000, for payment on the July invoice .

2 1 9. On or about August 23, 2006, A. C. Sinagra Company LPA issued a check for


220. On or about August 23, 2006, A.C. Sinagra Company LPA issued a check for


22 1 . On or about August 25, 2006 and on or about September 29, 2006, A.C. Sinagra

and Associates issued an invoice to AA for $6,000 each.

37


222. On or about October 24, 2006, A. C. Sinagra and Associates received three checks

from AA for approximately $6,000 each, as payment on previously issued invoices. Two checks

were dated on or about October 20, 2006 and the third check was dated on or about October 23,

2006.

223 . On or about October 24, 2006, A.C. Sinagra Company LPA issued a check for


224. On or about November 1 0, 2006, A. C. Sinagra Company LPA issued a check for

approximately $4,000 to Burlwood Holdings, which CALABRESE caused to be negotiated.

225. Neither Burlwood, nor Relative 2 performed work for A.C. Sinagra and

Associates or A. C. Sinagra Company LPA.

226. Neither CALABRESE nor Sinagra disclosed to AA that A. C. Sinagra Company

LP A made payments to Burl wood and Relative 2.

227. In or around 2006, Kelley told CALABRESE that Kelley had received complaints

from AA employees about consulting payments that AA was making to Sinagra and the fact that

Sinagra's work did not justify the amount of monthly consulting fees paid to Sinagra.

CALABRESE instructed Kelley to speak favorably of Sinagra to these AA employees,

explaining to Kelley that Sinagra was paying a portion of his monthly consulting fee to

CALABRESE's relative.

228 . On or about the following dates, for the purpose of executing and attempting to

execute the foregoing scheme and artifice to defraud and to obtain money and property by means

of false and fraudulent pretenses and representations, CALABRESE knowingly placed and

caused to be placed in an authorized depository for mail matter any matter or thing whatever to

38


be sent and delivered by the U.S . Postal Service, and knowingly caused to be delivered by mail

or such carrier according to the direction thereon, each constituting a separate count:

Count Date Description

6 October 23, 2006 Check from AA in Cleveland, Ohio to A. C. Sinagra and Associates in Lakewood, Ohio for $6,000

7 October 24, 2006 Check from A.C. Sinagra Company LPA in Lakewood, Ohio to Berlwood (sic) Holdings in Chagrin Falls, Ohio for $8,000

8 November 1 0, 2006 Check from A. C. Sinagra Company LP A in Lakewood, Ohio to Burlwood Holdings in Chagrin Falls, Ohio for $4,000

All in ·violation of Title 1 8, United States Code, Sections 1 34 1 and 2 .


COUNT 9 (Tampering With a Witness, Victim or an Informant, 1 8 U.S.C. §§ 1 5 1 2(c)(2) and 2)

229. Paragraphs 1 , 1 1 - 1 3 , 1 5 , 1 1 7 and 1 20 of this Indictment are realleged and fully


At all times relevant to this count of the Indictment:

230. Relative 1 ' s brother was Attorney 6.

23 1 . Attorney 7 was CALABRESE's relative and was formerly related to Relative 1 .

232. Business Executive or Employee 40 ("BE40") (now deceased) was a former

vendor to AA.

233 . From in or around December 2007 through the date of the filing of this

Indictment, the Federal Bureau of Investigation ("FBI") and Internal Revenue Service, Criminal

Investigation Division ("IRS") were investigating, among other things, whether individuals and

private companies had provided things of value, including cash, travel, meals, and free and

39


discounted home improvements, to James C. Dimora, Frank P. Russo, John Kevin Kelley and

other public officials in return for their promise to perform official acts. The FBI and IRS were

also investigating, among other things, whether CALABRESE and others abused their positions

of trust by misdirecting funds provided to AA for their personal benefit (hereinafter "County

Corruption Investigation").

234. During the period from in or around July 28, 2008 through on or about the date of

this Indictment, a Federal Grand Jury sitting in the Northern District of Ohio was conducting a

criminal investigation, pursuant to its powers as set forth under Rule 6 of the Federal Rules of

Criminal Procedure, into matters stemming from the County Corruption Investigation.

235 . On or about the morning of February 2, 2009, the FBI interviewed Relative 1 in

connection with payments she received from AA through Business 43 . Relative 1 told the FBI

that BE39 and BE40 contacted her about consulting for AA, that she (Relative 1 ) conducted all

of her work from home, and that she (Relative 1 ) worked on AA' s plans to expand into Lorain

County. The FBI served Relative 1 with a federal grand jury subpoena.

The Offense

236. On or about February 2, 2009, the exact date unknown to the Grand Jury, in the

Northern District of Ohio, Eastern Division, Defendant ANTHONY 0. CALABRESE, III, did

corruptly obstruct, influence and impede an official proceeding and attempted to do so, in

violation of Title 1 8, United States Code, Section 1 5 1 2( c )(2).

It was part of the offense that:

40


237. On or about February 2, 2009, CALABRESE told BE39 that CALABRESE and

Attorney 7 had recently met with Attorney 6 . CALABRESE asked that BE39 meet with

Attorney 6.

23 8. On or about February 2, 2009, BE39 met with Attorney 6 .

239. During the meeting, Attorney 6 told BE39 that CALABRESE and Attorney 7

wanted Attorney 6 to meet with BE39 to go over the script.

240. Attorney 6 instructed BE39 that if anyone questioned BE39 about Relative 1 ,

BE39 should say that BE40 and he (BE39) hired Relative 1 to work out of her home to help with

the Lorain expansion, which CALABRESE and BE39 knew was not true.

All in violation of Title 1 8, United States Code, Sections 1 5 12(c)(2) and 2.


COUNT 1 0 (Conspiracy to Commit Bribery Concerning Programs Receiving Federal Funds,

1 8 U.S.C. § 666, in violation of 1 8 U.S.C. § 3 7 1 )

24 1 . Paragraphs 1 , 3 , 4, 6-9, 1 3, 1 4 and 1 6 of this Indictment are realleged and fully



242. The County was a government agency as that term is defined in Title 1 8, United

States Code, Section 666( d)(2). The County received benefits in excess of $ 1 0,000 during each

of the one year periods July 2 1 , 2005 through July 20, 2006; July 2 1 , 2006 through July 20, 2007;

July 2 1 , 2007 through July 20, 2008; and July 2 1 , 2008 through July 20, 2009 under a Federal

program involving a grant, contract, subsidy, loan, guarantee, insurance and other form of

Federal assistance.

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243 . Kelley and Payne were agents ofthe County as defined in Title 1 8, Section

666( d)( 1 ), United States Code.

244. The Geospatial Information Systems ("GIS") project was a joint project of the

County Commissioners, the Auditor's Office and the Engineer's Office, financed by the County

general fund. Kelley served as the project manager. GIS maps and data combine layers of

information (such as streets, parcel numbers and population density) about a geographical region

using computer software. The GIS project was completed in phases, consisting of constructing

the initial GIS system, followed by projects that would enhance the system and make it available

to other users (hereinafter collectively "GIS Project").

245. In or around November 2004, the County sought a Request for Qualification

("RFQ") for a GIS contractor. In or around March 2005, the original RFQ was withdrawn and a

second RFQ issued. Kelley served on a five-member committee to review the RFQ responses.

Eight companies, including Business 7, submitted proposals in response to the RFQ.

246. Business 7 was a professional engineering and consulting services company that

provided geospatial services. Business 7a was the engineering unit of Business 7 (collectively

"Business 7").

247. Business Executive or Employee 42 ("BE42") was a supervisor at Business 7.

248 . Business 7 's GIS project manager, Business Executive or Employee 3 ("BE3")

oversaw daily operations and managed employees. In or about February 2008, BE3 left Business

7 and began working for Business 8 as a Project Director for the Dayton, Ohio office.

249. Business 8 was a national Geographic Information Systems firm.

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)I

THE CONSPIRACY

250. From in or around July 2 1 , 2005 and continuing through on or about November

25, 2008, the exact dates being unknown to the Grand Jury, in the Northern District of Ohio,

Eastern Division and elsewhere, Defendant ANTHONY 0. CALABRESE, III, and John Kevin

Kelley (not charged herein), Kevin F. Payne (deceased and not charged herein), Daniel P.

Gallagher (not charged herein), and others known and unknown to the Grand Jury, did knowingly

and intentionally combine, conspire, confederate and agree with each other to commit an offense

against the United States, that is, bribery concerning programs receiving federal funds, in

violation of Title 1 8, United States Code, Sections 666(a)( l )(B) and (a)(2).


25 1 . It was an object of the conspiracy that Kelley and Payne corruptly solicited,

demanded, accepted and agreed to accept money for the benefit of any person from

CALABRESE, Law Firm 1 , and Eagle, Kelley and Payne acting with the intent that Kelley and

Payne be influenced and rewarded in connection with a business, transaction and series of

transactions of the County valued at $5,000 or more in the one year periods July 2 1 , 2005

through July 20, 2006; July 2 1 , 2006 through July 20, 2007; July 2 1 , 2007 through July 20, 2008;

and July 2 1 , 2008 through July 20, 2009; that is, the award and administration of County

business related to the GIS Project, both as requested and as future opportunities arose.

252. It was a further object of the conspiracy that CALABRESE, Law Firm 1, and

Eagle corruptly gave, offered and agreed to give money to Payne, acting with the intent to

influence and reward Kelley and Payne in connection with the above described business,

transaction and series of transactions.

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253 . It was a further object of the conspiracy that CALABRESE and Law Firm 1

received a financial benefit in connection with the above described business, transaction, and

series of transactions.

MANNER AND MEANS

It was part _of the conspiracy that:

254. In or around 2005, Payne and Kelley discussed a way for Payne to obtain bribes

and kickbacks from the GIS project.

255 . On or about July 2 1 , 2005, the County Commissioners awarded an approximately

$725,000 contract for consultant services for the GIS project to Business 7 .

256. In or around the end of 2005, Kelley used his position as GIS project manager to

facilitate Business 7 engaging Law Firm 1 in a professional services agreement.

257. In or around 2005 , Kelley asked CALABRESE to cause Law Firm 1 to hire Eagle,

which would then use the money received from Law Firm 1 to pay Payne.

258. On or about October 27, 2005, the County Commissioners awarded an

approximately $637,050 contract to Business 7, as Amendment 1 to the GIS Project.

259. On or about January 1 6, 2006, Business 7 signed a professional services

agreement with Law Firm 1 , at a rate of approximately $3 ,000 per month, with Law Firm I

paying Eagle $ 1 ,500 of the $3 ,000 monthly fee.

260. CALABRESE caused Law Firm I to issue invoices to Business 7 at a rate of

approximately $3,000 per month, and Law Firm 1 received payment from Business 7 on those

invoices.

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26 1 . Payne created Eagle invoices to Law Firm 1 for approximately $ 1 ,500 and gave

the invoices to Kelley to give to CALABRESE.

262. Kelley hand-delivered to CALABRESE the Eagle invoices that Payne had given

to Kelley.

263 . Kelley and CALABRESE sometimes spoke in code to coordinate the delivery of

the Eagle invoices.

Firm 1 .

264. CALABRESE caused the Eagle invoices to be processed for payment by Law

265. Gallagher caused to be negotiated the checks from Law Firm 1 to Eagle, and gave

Payne approximately one third of the money that Eagle received from Law Firm 1 .

266. Eagle performed no work for Law Firm 1 on the GIS project.

267. Kelley and Payne used their official positions to influence the award and

administration of the GIS project to benefit Business 7 and later, Business 8 .

268. On or about March 6, 2008, the County Commissioners awarded a $94,539.72

contract to Business 8 for Digital Orthoimagery, which was part of the overall GIS Project.

269. On or about April 3 , 2008, the County Commissioners awarded an approximately

$485,000 contract to Business 8, for the Sanitary Engineer' s Consolidated Work Order and

Resource Management Application for the County Sanitary Engineering Division (hereinafter

"Sanitary Engineer' s Project"), which was part of the overall GIS Project.

270. On or about June 26, 2008, the County Commissioners awarded an additional

$ 179,000 to Business 8 for Amendment I to Digital Orthoimagery, which was part of the overall

GIS Project.

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271 . On or about November 2 1 , 2006, the County Commissioners awarded an

approximately $3, 1 4 1 ,646 contract for consultant services for Amendment 2 to the GIS project to

Business 7 .

272. On or about October 1 8, 2007, the Cuyahoga County Commissioners awarded

Business 7 Amendment 3 to the GIS contract valued at approximately $760,300.

273. On or about January 24, 2008, Business 7 gave CALABRESE and Law Firm 1

notice that it was terminating its professional services arrangement with Law Firm 1 , effective on

or about January 3 1 , 2008 .

274. In or around early 2008, Kelley used his official position to facilitate Business 8

retaining Law Firm 1 for professional services.

275. On or about January 25, 2008, CALABRESE and BE3 discussed the possibility of

Business 8 entering into a professional services arrangement with Law Firm 1 .

276. On or about, March 1 1 , 2008, Business 8 executed a professional services

agreement with Law Firm 1 at a monthly rate of approximately $3 ,500, with Law Firm 1 paying

Eagle approximately $2,000 from the money Law Firm 1 received from Business 8 .

277. CALABRESE caused Law Firm 1 to issue invoices to Business 8, and Law Firm

1 received payment from Business 8 on those invoices.

278. Payne created Eagle invoices to Law Firm 1 for approximately $2,000 and gave



to Kelley.

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Firm 1 .


28 1 . Gallagher caused to be negotiated the checks from Law Firm 1 to Eagle, and gave


OVERT ACTS

282. In furtherance of the conspiracy, and to effect the objects thereof, CALABRESE,

Kelley, Payne, Gallagher and others committed the following overt acts in the Northern District

of Ohio and elsewhere:

A. On or about January 4, 2008 at approximately 3 :30 p.m., Kelley told

CALABRESE, "I have that, you asked for a couple, urn, uh twelve items for that one bird."

Kelley clarified he was referring to invoices for the Eagle Group. CALABRESE confirmed he

was out of Eagle invoices. Kelley said, "He [Payne] called me and said he had 'em."

CALABRESE thanked Kelley. Kelley and CALABRESE agreed to meet the following Monday.

B. On or about January 1 6, 2008 at approximately 6:57 p.m., CALABRESE

and Kelley discussed BE3 changing employers from Business 7 to Business 8 . Kelley told

CALABRESE, those guys with whom you have "that Eagle thing" are probably "going, uh, you

know, to finish that off." CALABRESE asked, "They are gonna stop it?" Kelley replied, from

his understanding the guy was moving to another company and "they" were going to pick it up.

CALABRESE and Kelley then discussed BE3 moving and that "it" would go with BE3 because

Business 8 was on State terms. CALABRESE and Kelley both agreed that this was good.

CALABRESE inquired if he should resign from Business 7. Kelley told Calabrese, "Keep going

until they stop," and later added, "Let it play out."

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C. On or about January 24, 2008 at approximately 9 :59 a.m., CALABRESE

told Kelley that he (CALABRESE) was meeting with BE42 in a few minutes to discuss projects

in 2008. Kelley said that he was sure that BE42 was going to "whack you guys." CALABRESE

agreed that BE42 was going to "terminate us." CALABRESE then asked Kelley what

CALABRESE did "besides help with the things at the County?" CALABRESE asked Kelley,

"What did I do there, just tell me again." CALABRESE later asked, "Do I know [BE3] left, or

no?'' Kelley told CALABRESE how to answer the questions and told CALABRESE to tell

BE42, "Every time they came, County issues, you helped resolve those." CALABRESE said, "If

he whacks, which I'm fine with, urn, I assume you, that we' l l just figure something else out."

Kelley responded, "We're gonna go in a different direction . . . I already have that set up."

D. On or about January 30, 2008 at approximately 5 :45 p.m., Kelley and

CALABRESE discussed Law Finn 1 working with Business 8 instead of Business . ? . Kelley

said, "I wouldn't be surprised if [Business 7] tries to bring you back." CALABRESE responded

that he cannot do both, so Kelley will have to advise him. CALABRESE then asked, "Yeah, and

here and uh and on and on [BE3], I mean, would four be out of line with two going to Eagle

cause they do half the work or do you want me to do three with half?" Kelley responded, "No,

no, no, no, go four." CALABRESE said, "Yeah, don't you think?" Kelley replied, "Yeah,

Absolutely." CALABRESE told Kelley, "I may even do twenty-five with Eagle, and just to,

' cause, uh, all I need really is fifteen hundred and I can, I can, I can help them out." Kelley said,

"I think, yeah, absolutely. I mean you're definitely going to help them."

E. On or about February 22, 2008, CALABRESE caused to be sent to BE3 , a

proposed engagement letter between Law Firm 1 and Business 8.

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F. On or about February 25, 2008 at approximately 2 : 59 p.m. , CALABRESE

and Kelley discussed the fact that since Kelley caused Business 8 to receive a greater contract

with the County on the GIS Project, Business 8 had more money available to pay Law Firm 1 .

G. On or about March 7, 2008 at approximately 1 I :57 a.m., CALABRESE

told Kelley, "BE3 called me, he split the baby, which is better than 3 , he gave me 3500 just FYI."

H. On or about March I I , 2008 at approximately 1 I :56 a.m., CALABRESE

told Kelley that Gallagher was in Florida for another week. CALABRESE then said, "On those,

urn, things, I need, you know, ten of those . . . for my Eagle project." Kelley responded,

"Absolutely."

I . On or about the following dates, CALABRESE caused to be issued a

check drawn on the account of Law Firm 1 , payable to The Eagle Group, LLC, each check

constituting a separate overt act.

Overt Act Date Approximate Amount

1- 1 February 28, 2006 $ 1 ,500

1-2 April 7, 2006 $3 ,000

I-3 May 9, 2006 $ 1 ,500

I-4 May 23, 2006 $ 1 ,500

1-5 June 25, 2006 $ I ,500

1-6 August 1 1 , 2006 $ I ,500

1-7 September 1 , 2006 $ 1 ,500

I-8 September 29, 2006 $ I ,500

1-9 December 1 , 2006 $ 1 ,500

I- I O January 3 , 2007 $ 1 ,500

1- 1 1 January 26, 2007 $ I ,500

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1- 1 2 March 1 , 2007 $ 1 ,500

1- 1 3 May 2, 2007 $ 1 ,500

1- 1 4 May 4, 2007 $ 1 ,500

1:.. 1 5 May 25, 2007 $ 1 ,500

I- 1 6 July 1 7, 2007 $ 1 ,500

1- 1 7 July 24, 2007 $ 1 ,500

1- 1 8 September 1 0, 2007 $ 1 ,500

1- 1 9 October 26, 2007 $ 1 ,500

I-20 November 27, 2007 $ 1 ,500

I-2 1 January 30, 2008 $2,000

I-22 April 9, 2008 $2,000

I-23 April 1 8, 2008 $2,000

I-24 June 3, 2008 $2,000

I-25 July 2, 2008 $2,000

I-26 August 1 4, 2008 $2,000

1-27 August 22, 2008 $2,000

J. On or about November 25, 2008, CALABRESE caused to be received by

Law Firm 1 a check in the amount of approximately $ 1 ,500, payable to Law Firm 1 , drawn on

the account of Business 8 .

All in violation ofTitle 1 8, United States Code, Section 37 1 .

50



COUNT 1 1 (Conspiracy to Commit Mail Fraud and Honest Services Mail Fraud,

1 8 U.S .C. §§ 1 34 1 and 1 346, in violation of 1 8 U.S.C. § 1 349)

283 . Paragraphs 1 , 3 , 4, 6-9, 1 3, 1 4, 1 6, 244, 246, and 248-49 of this Indictment are re-


THE CONSPIRACY

284. From on or about July 2 1 , 2005 through on or about November 25, 2008, the

exact dates being unknown to the Grand Jury, in the Northern District of Ohio, Eastern Division

and elsewhere, Defendant ANTHONY 0. CALABRESE, III, and John Kevin Kelley (not

charged herein), Kevin F. Payne (deceased and not charged herein), and Daniel P. Gallagher (not

charged herein) and others known and unknown to the Grand Jury, did knowingly and

intentionally combine, conspire, confederate and agree with each other to commit offenses

against the United States; that is, to knowingly devise and intend to devise a scheme and artifice:

( 1 ) to defraud and deprive the County (including the Auditor's Office, Engineer' s Office

and the County Commissioners) and its citizens, of their right to the honest and faithful

services of Kelley and Payne, through bribery and kickbacks and the concealment of

material information related thereto, and

(2) to defraud the County (including the Auditor's Office, Engineer's Office and the

County Commissioners) and to obtain money and property by means of materially false

and fraudulent pretenses, representations and promises,

and for the purpose of executing such scheme and artifice, to cause matters to be placed

in any post office and authorized depository for mail matter to be sent and delivered by the

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United States Postal Service and private and commercial interstate carrier, in violation of Title

1 8, United States Code, Sections 1 34 1 and 1 346.


285. It was the object of the conspiracy that Kelley and Payne secretly used their

official positions to enrich Payne and Gallagher by soliciting and accepting gifts, payment�, and

other things of value from CALABRESE, Law Firm 1 , Eagle and others, in exchange for

favorable official action, and that CALABRESE enriched himself and Law Firm 1 , by secretly

obtaining favorable official action through corrupt means.

MANNER AND MEANS


286. Payne, with Kelley's assistance, solicited and accepted money from Law Firm 1

and CALABRESE, through Eagle and Gallagher.

287. Payne and Kelley provided favorable official action for the benefit of Law Firm 1

and CALABRESE both as requested and as future opportunities arose.

288. The conspirators took steps to hide, conceal, and cover up their activity and the

nature and scope of CALABRESE's dealings with Payne.

Acts in furtherance of the conspiracy

289. In or around 2005, Payne and Kelley discussed a way for Payne to obtain bribes

and kickbacks from the GIS project. .

290. On or about July 2 1 , 2005, the County Commissioners awarded an approximately

$725,000 contract for consultant services for the GIS project to Business 7.

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291 . In or around the end of 2005, Kelley used his position as GIS project manager to

facilitate Business 7 engaging Law Firm 1 in a professional services agreement.

292. In or around 2005, Kelley asked CALABRESE to cause Law Firm 1 to hire Eagle,

which would then use the money received from Law Firm 1 to pay Payne.

293 . On or about October 27, 2005, the County Commissioners awarded an

approximately $63 7,050 contract to Business 7, as Amendment 1 to the GIS Project.

294. On or about January 1 6, 2006, Business 7 signed a professional services

agreement with Law Firm 1 , at a rate of approximately $3 ,000 per month, with Law Firm 1

paying Eagle $ 1 ,500 of the $3 ,000 monthly fee. ·

295. CALABRESE caused Law Firm 1 to issue invoices to Business 7 at a rate of

approximately $3,000 per month, and Law Firm 1 received payment from Business 7 on those

invoices.

296. Payne created Eagle invoices to Law Firm 1 for approximately $1 ,500 and gave



to Kelley.

298. Kelley and CALABRESE sometimes spoke in code to coordinate the delivery of

the Eagle invoices.

Firm 1 .


3 00. Gallagher caused to be negotiated the checks from Law Firm 1 to Eagle, and gave


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301 . Eagle performed no work for Law Firm 1 on the GIS project.

302. Kelley and Payne used their official positions to influence the award and

administration of the GIS project to benefit Business 7 and later, Business 8 .

303 . On or about March 6, 2008, the County Commissioners awarded a $94,539.72

contract to Business 8 for Digital Orthoimagery, which was part of the overall GIS Project.

304. On or about April 3 , 2008, the County Commissioners awarded an approximately

$485,000 contract to Business 8, for the Sanitary Engineer's Consolidated Work Order and

Resource Management Application for the County Sanitary Engineering Division (hereinafter

"Sanitary Engineer' s Project"), which was part of the overall GIS Project.

305 . On or about June 26, 2008, the County Commissioners awarded an additional

$ 1 79,000 to Business 8 for Amendment 1 to Digital Orthoimagery, which was part of the overall

GIS Project.

306. On or about November 2 1 , 2006, the County Commissioners awarded an

approximately $3, 1 4 1 ,646 contract for consultant services for Amendment 2 to the GIS project to

Business 7.

307. On or about October 1 8, 2007, the Cuyahoga County Commissioners awarded

Business 7 Amendment 3 to the GIS contract valued at approximately $760,300.

308. On or about January 24, 2008, Business 7 gave CALABRESE and Law Firm I

notice that it was terminating its professional services arrangement with Law Firm 1 , effective on

or about January 3 1 , 2008.

309. In or around early 2008, Kel ley used his official position to facil itate Business 8

retaining Law Firm 1 for professional services.

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3 1 0. On or about January 25, 2008, CALABRESE and BE3 discussed the possibility of

Business 8 entering into a professional services arrangement with Law Firm 1 .

3 1 1 . On or about March 1 1 , 2008, Business 8 executed a professional services

agreement with Law Firm 1 at a monthly rate of approximately $3,500, with Law Firm 1 paying

Eagle approximately $2,000 from the money Law Firm 1 received from Business 8 .

3 1 2 . CALABRESE caused Law Firm 1 to issue invoices to Business 8 , and Law Firm

1 received payment from Business 8 on those invoices.

3 1 3 . Payne created Eagle invoices to Law Firm 1 for approximately $2,000 and gave


3 1 4. Kelley hand-delivered to CALABRESE the Eagle invoices that Payne had given

to Kelley.

Firm 1 .

3 1 5 . CALABRESE caused the Eagle invoices to be processed for payment by Law

3 1 6. Gallagher caused to be negotiated the checks from Law Firm 1 to Eagle, and gave


Use of the U.S . Mail

3 1 7. On a regular basis and on numerous occasions during the course of this

conspiracy, CALABRESE, Kelley, Payne and others executed and attempted to execute the

scheme and artifice set forth above by causing matters and things to be sent and delivered by the

United States Postal Service, according to the directions thereon within the Northern District of

Ohio, including:

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A. County payments to Business 7 and Business 8 for work that Business 7 and

Business 8 performed on the overall GIS project.

B. Invoices sent from Law Firm I to Business 7, including invoices sent on or about

the following dates : March 1 3, 2006, May 5, 2006, June 1 6, 2006, July 1 9, 2006, August 3 1 ,

2006, September 1 3 , 2006, October 1 7, 2006, November 1 7, 2006, December 19, 2006, January

23, 2007, February 1 9, 2007, March 27, 2007, May 1 8, 2007, June 1 5 , 2007, July 1 6, 2007,

August 1 5 , 2007, September 2 1 , 2007, October 1 5 , 2007, November 1 6, 2007, December 1 8,

2007 and February 1 5, 2008 .

C. Checks sent from Business 7 to Law Firm 1 as payment on the above described

InVOICeS.

D. Invoices sent from Law Firm 1 to Business 8, including invoices sent on or about

the following dates: April 1 5 , 2008, May 1 5 , 2008, June 1 3 , 2008, July 1 5, 2008, August 1 5,

2008, September 1 5 , 2008, October 1 5, 2008, and November 1 4, 2008 .

E. Correspondence sent from CALABRESE to Gallagher on or about February 28,

2006, enclosing a $1 ,500 check from Law Firm 1 to Eagle.

F. Checks from Law Firm 1 to Eagle, including checks sent on or about the

following dates : February 28, 2006, April 7, 2006, May 9, 2006, May 23, 2006, June 25, 2006,

August 1 1 , 2006, September 1 , 2006, September 29, 2006, December 1 , 2006, January 3, 2007,

January 26, 2007, March 1 , 2007, May 2, 2007, May 4, 2007, May 25, 2007, July 1 7, 2007, July

24, 2007, September 1 0, 2007, October 26, 2007, November 27, 2007, January 30, 2008, April 9,

2008, April 1 8, 2008, June 3 , 2008, July 2, 2008, August 1 4, 2008 and August 22, 2008.


56



COUNT 1 2 (Conspiracy to Commit Bribery Concerning Programs Receiving Federal Funds,

1 8 u.s.c. § 37 1 )

3 1 8. Paragraphs 1 -4, 6-9, 1 3 , 1 4, 1 6, 244, 246, and 248-49 of this Indictment are re-


3 1 9 . At all times relevant, the County was a government agency as that term is defined

in Title 1 8, United States Code, Section 666( d)(2). The County received benefits in excess of

$ 1 0,000 during the calendar year 2008 under a Federal program involving a grant, contract,

subsidy, loan, guarantee, insurance and other form of Federal assistance.

320. Kel ley and Payne were agents of the County as defined in Title 1 8, Section

666(d)( 1 ), United States Code.

32 1 . Business Executive or Employee 3 7 ("BE37") replaced BE3 as the project

manager at Business 7, when BE3 left Business 7 for Business 8 .

322 . Broma Information Technology ("Broma") was an IT consulting firm and a Small

Business Enterprise ("SBE") certified with the County and located in Cleveland, Ohio.

323 . Anthony Ma ("Ma"), now deceased, was an officer or employee of Broma.

324. Business 44 was a technology consulting company founded by Business

Executive or Employee 3 8 ("BE38"). At times, Business 44 was an SBE certified with the

County.

325 . On or about April 3 , 2008, the County Commissioners approved an approximately

$485,000 contract with Business 8 for the Sanitary Engineer's Project, which was part of the

overall GIS project.

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THE CONSPIRACY

326. From in or around February 2008 and continuing through on or about September



Kelley (not charged herein), and others known and unknown to the Grand Jury, did knowingly

and intentionally combine, conspire, confederate and agree with each other to commit an offense

against the United States, that is, bribery concerning programs receiving federal funds, in

violation of Title 1 8, United States Code, Sections 666(a)( l )(B) and (a)(2).


327. It was an object of the conspiracy that Kelley corruptly solicited, demanded and

agreed to accept money for the benefit of any person from CALABRESE, Burl wood Holdings,

and Business 44, Kelley acting with the intent that Kelley be influenced and rewarded in

connection with a business, transaction and series of transactions of the County valued at $5,000

or more in the calendar year 2008; that is, the award and administration of County business

related to the Sanitary Engineer's Project, which was related to the overall GIS Project, both as

requested and as future opportunities arose.

328. It was a further object of the conspiracy that CALABRESE, Burlwood Holdings

and Business 44 corruptly gave, offered and agreed to give to Kelley money, acting with the

intent to influence and reward Kelley in connection with the above described business,


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329. It was a further object of the conspiracy that CALABRESE obtained a financial

benefit for himself and for Burl wood in connection with the above described business,


MANNER AND MEANS


330. On or about February 28, 2008, Business 8 provided Kelley with a proposal for

the Sanitary Engineer' s Project, which was part of the overall GIS Project.

33 1 . On or about March 26, 2008, Kelley caused the ADP Board to approve a proposed

contract with Business 8 for the Sanitary Engineer's Project, which would run from on or about

April 1 , 2008 to on or about March 3 1 , 2009, in the amount of approximately $485,000.

332. On or about April 1 , 2008 at approximately 8 :00 a.m., Anthony Ma and BE3 met

to discuss the possibility of Broma serving as Business 8 ' s SBE on the Sanitary Engineer's

Project.

333 . On or about April 1 , 2008 at approximately 1 1 :20 a.m., Ma communicated to BE3

that Broma could not partner with Business 8 on the Sanitary Engineer' s Project.

334. On or about April 1 , 2008 at approximately 1 :30 p.m., BE3 communicated with

Gallagher about Broma declining to partner with Business 8 on the Sanitary Engineer' s Project.

335 . In or around April 2008, after Business 8 learned that Broma could not partner

with Business 8 on the Sanitary Engineer's Project, CALABRESE suggested that Business 8 use

Business 44 to fulfill the SBE requirement.

336. Kelley understood that if Business 8 used Business 44 on the Sanitary Engineer' s

Project, Business 44 would pay a fee to Burlwood Holdings, LLC.

59


337. CALABRESE told Kelley that Kelley would receive approximately $ 1 5,000 over

the course of Business 44' s contract, if Business 8 engaged Business 44 to work on the Sanitary

Engineer' s Project.

33 8. Kelley was to keep a portion of the $ 1 5,000 and cause to be distributed the

remaining money to others.

339. Kelley used and attempted to use his official position to arrange for Business 8 to

use Business 44' s services on the Sanitary Engineer's Project.

340. On or about May 1 9, 2008, Business 8 signed a subcontractor's agreement with

Business 44, valued at approximately $75,000, related to the Sanitary Engineer' s Project.

34 1 . The first payment to Kelley was scheduled to occur on or about August 1 , 2008,

but did not happen, following the July 28, 2008 search warrants that the FBI and IRS executed at

Kelley's home and office and other locations throughout the County.

OVERT ACTS

342 . In furtherance of the conspiracy, and to effect the objects thereof, CALABRESE,

Kelley and others committed the following overt acts in the Northern District of Ohio and

elsewhere:

A. On or about January 30, 2008 at approximately 5 :45 p.m., Kelley and

CALABRESE discussed work CALABRESE has been doing on the "Engineer' s project" and

that CALABRESE had not been officially hired. CALABRESE said, "We're already working on

it. BE38 is doing his behind the scenes thing. He and I are supposed to talk Monday." Kelley

told CALABRESE that he talked to the "Business 7 guys" today and also BE3 . Kelley said that

he told everyone, "There' s enough work for everybody." Kelley told CALABRESE about a

60


meeting Kelley had with Business 7, and then said, "I wouldn't be surprised if Business 7 tries to

bring you back." CALABRESE responded that he cannot do both, so KELLEY would have to

advise him.

B. On or about April 30, 2008 at approximately 6 :55 p.m. , Kelley told ·

CALABRESE that he wanted to meet regarding the SBE matter involving Kevin Payne. Kelley

said that they were moving forward on CALABRESE's recommendation. CALABRESE said

that they have not done anything yet because CALABRESE's guy called and CALABRESE had

to meet with him and he was not going to do anything yet.

C. On or about July 8, 2008, CALABRESE caused to be sent to BE3 8 an

email with an invoice from Burl wood Holdings for approximately $7,500.

D. On or about September 1 2, 2008, CALABRESE caused to be deposited a

check from Business 44 to Burlwood Holdings, LLC for approximately $5 ,000.

E. On or about September 25, 2008, CALABRESE caused to be deposited a

check from Business 44 to Burlwood Holdings, LLC for approximately $5,000.

All in violation of Title 1 8, United States Code, Section 3 7 1 .

The Grand Jury further charges: COUNT 1 3

(Hobbs Act Conspiracy, 1 8 U.S.C. § 1 95 1 )

343 . Paragraphs 1 -4, 6-9, 1 3 and 244 of this Indictment are re-alleged and incorporated

by reference as if fully set forth herein.

344. The operations of Business 44 affected interstate commerce.

345. The operations of Burl wood Holdings affected interstate commerce.

6 1


346. The operations of the County, the County Commissioners, the Auditor's Office,

and the Engineer' s Office affected interstate commerce.

THE CONSPIRACY

34 7. Beginning in or around March 2008 and continuing until on or about September



Kelley (not charged herein), and others known and unknown to the Grand Jury, did knowingly

and intentionally combine, conspire, confederate and agree with each other to obstruct, delay and

affect commerce and the movement of articles and commodities in commerce by extortion, in

·that Kelley attempted to obtain property from Business 44 and Burlwood Holdings, with their

consent; to wit: money, under color of official right.

All in violation of Title 1 8, United States Code, Section 1 95 1 .


COUNT 1 4 (Conspiracy to Commit Mail Fraud and Honest Services Mail Fraud,

1 8 U.S.C. §§ 1 34 1 and 1 346, in violation of 1 8 U.S .C. § 1 349)

348 . Paragraphs 1 , 3 , 4, 1 0 and 1 3 of this Indictment are re-alleged and incorporated by

reference as if fully set forth herein.

THE CONSPIRACY

349. From in or around 200 I through on or about July 28, 2008, the exact dates being

unknown to the Grand Jury, in the Northern District of Ohio, Eastern Division and elsewhere,

Defendant ANTHONY 0. CALABRESE, III, and John Kevin Kelley (not charged herein), and

others known and unknown to the Grand Jury, did knowingly and intentionally combine,

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conspire, confederate and agree with each other to commit offenses against the United States;

that is, to knowingly devise and intend to devise a scheme and artifice:

( 1 ) to defraud and deprive the Parma City School District, and the Cities of Parma, Parma

Heights, and Seven Hills and their citizens, of their right to the honest and faithful

services of Kelley, through bribery and kickbacks and the concealment of material

information related thereto, and

(2) to defraud the Parma City School District and to obtain money and property by means

of materially false and fraudulent pretenses, representations and promises,



States Postal Service and private and commercial interstate carrier, in violation of Title I 8,

United States Code, Sections 1 34 1 and 1 346.


350. It was the object of the conspiracy that Kelley secretly used his official position on

the Parma City School Board to enrich himself and his designees, CALABRESE, Law Firm 1 ,

their clients, and their designees, by soliciting and accepting gifts, payments, and other things of

value from CALABRESE and others, in exchange for favorable official action, and that

CALABRESE enriched himself, Law Firm I , their clients and their designees, by secretly

obtaining favorable official action through corrupt means.

MANNER AND MEANS


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35 1 . CALABRESE asked Kelley to use his official position to influence PCSD

business to benefit CALABRESE, Law Firm 1 , their clients and designees.

352. Kelley used his official position to award PCSD business both directly, and

through sub-contracts, to Law Firm 1 and to CALABRESE's and Law Firm 1 ' s clients, both as

requested and as future opportunities arose.

353 . Kelley used his official position to administer PCSD business favorably to Law

Firm 1 and CALABRESE's clients, both as requested and as future opportunities arose.

354. CALABRESE received a personal benefit when Law Firm 1 and clients of

CALABRESE and Law Firm 1 received favorable official action from PCSD.

355 . CALABRESE offered and gave to Kelley gifts, payments, and other things of

value, and Kelley solicited and accepted gifts, payments, and other things of value from

CALABRESE and others. The t�ings of value included campaign contributions, cash, tickets,

and meals.

356. At times, CALABRESE directly provided things of value to Kelley. At other

times, CALABRESE served as an intermediary between Kelley and a person seeking favorable

official action from Kelley and the PCSD.

357. On occasion, when CALABRESE served as a conduit, CALABRESE used code

words to reveal to Kelley the source of the thing of value that CALABRESE was giving to

Kelley.

358 . CALABRESE, Kelley and other conspirators used and caused to be used the

United States mail to send and deliver mail matter in furtherance of the conspiracy, including

mail matter sent and received in the Northern District of Ohio.

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359. The conspirators took steps to hide, conceal, and cover up their activity and the

nature and scope of CALABRESE's dealings with Kelley.



COUNT 1 5 (False Statement to Law Enforcement, 1 8 U.S .C. § 1 00 1 )

360. Paragraphs 1 , 5 , 1 3 , 1 5 and 1 1 9 of this Indictment are re-alleged and incorporated

by reference as if fully set forth herein.

361 . During the period from on or about January I , 2008 through on or about

September 1 , 2009, the FBI, part of the executive branch of the Government ofthe United States,

acting in a matter within its jurisdiction, was investigating PRUDOFF, Calabrese, Kelley,

Sinagra and others, in connection with AA' s payments to various consultants.

362. During the period from on or about January 1 , 2009 through on or about

September 1 , 2009, a Federal Grand Jury sitting in the Northern District of Ohio conducted a

criminal investigation, pursuant to its powers as set forth under Rule 6 of the Federal Rules of

Criminal Procedure, into the activities of PRUDOFF, Calabrese, S inagra, Kelley and others in

connection with AA's payments to various consultants.

363 . On or about August 1 9, 2009, in the Northern District of Ohio, Eastern Division,

Defendant SANFORD A. PRUDOFF, knowingly and willfully made material false statements to

a Special Agent of the FBI in a matter within the jurisdiction of the executive branch of the

Government of the United States, that is; ( 1 ) PRUDOFF said that he performed site selection

reviews for Alternatives Agency in every city in Lorain County other than the City of Lorain; and

(2) PRUDOFF said that he did not deal with Calabrese on matters other than AA; well knowing

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at the time that he made the statements to a Special Agent of the FBI that the statements were

false.

364. Defendant made the false statements described above with the intent to corruptly

obstruct, influence and impede and to attempt to obstruct, influence and impede the Federal

Grand Jury' s investigation described above. Defendant' s false statements caused Special Agents

of the FBI to perform additional investigation.

All in violation of Title I 8, United States Code, Section I 001 .


COUNT I 6 (Making or Subscribing a False Tax Return, 26 U.S.C. § 7206( I ))

365. On or about August I 5 , 2005, in the Northern District of Ohio, Eastern Division,

Defendant SANFORD A. PRUDOFF, a resident of Lorain, Ohio, did willfully make and

subscribe a U.S. Individual Income Tax Return, Form I 040, for the calender year 2004, on his

behalf, which was verified by a written declaration that it was made under the penalties of perjury

and was filed with the Internal Revenue Service, and which he did not believe to be true and

correct as to every material matter in that, as he then and there well knew and believed, said

return understated total income (on line 22).

All in violation of Title 26, United States Code, Section 7206( 1 ).


COUNT I 7 (Making or Subscribing a False Tax Return, 26 U.S.C. § 7206(1 ))

366. On or about October 1 5, 2006, in the Northern District of Ohio, Eastern Division,


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subscribe a U.S. Individual Income Tax Return, Form 1 040, for the calender year 2005, on his





All in violation of Title 26, United States Code, Section 7206(1 ) .


COUNT 1 8 (Making or Subscribing a False Tax Return, 26 U.S.C. § 7206( 1 ))

367. On or about October 1 5, 2007, in the Northern District of Ohio, Eastern Division,


subscribe a U.S. Individual Income Tax Return, Form 1 040, for the calender year 2006, on his





All in violation of Title 26, United States Code, Section 7206(1 ) .

RACKETEERING FORFEITURE

368. The allegations contained in Count 1 of this Indictment are hereby repeated,

re-alleged, and incorporated by reference herein as though fully set forth at length for the purpose

of alleging forfeiture pursuant to the provisions of Title 1 8, United States Code, Section 1 963

and Title 28, United States Code, Section 246 1 (c) . Pursuant to Rule 32.2, Federal Rules of


Criminal Procedure, notice is hereby given to defendant ANTHONY 0. CALABRESE, III, that

the United States will seek forfeiture as part of any sentence in accordance with Title 1 8, United

States Code, Section 1 963 in the event of the defendant' s conviction under Count 1 of this

Indictment. As a result of the foregoing offense, defendant ANTHONY 0. CALABRESE, III,

shall forfeit the following property to the United States :

a.) Any interest defendant ANTHONY 0. CALABRESE, III, acquired or maintained

in violation of 1 8 U.S.C. § 1 962;

b.) Any interest in, security of, claim against, or property or contractual right of any

kind affording a source of influence over, any enterprise which defendant ANTHONY 0.

CALABRESE, Ill, established, operated, controlled, conducted, or participated in the conduct of,

in violation of 1 8 U.S .C. § 1 962; and,

c.) Any property constituting, or derived from, any proceeds which defendant

ANTHONY 0. CALABRESE, III, obtained, directly or indirectly, from racketeering activity in

violation of 1 8 U.S.C. § 1 962.

369. The interests of defendant ANTHONY 0. CALABRESE, III, subject to forfeiture

to the United States pursuant to Title 1 8, United States Code, Sections 1 963(a)(1 ), 1 963(a)(2),

and 1 963(a)(3), include, but are not limited to:

a.) A sum of money equal to the total amount of proceeds obtained by defendant

ANTHONY 0. CALABRESE, III, as a result of his violation of 1 8 U.S.C. § 1 962.

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FORFEITURE UNDER I 8 U .S.C. § 98 I (a)( I )(C) AND 28 U.S.C. § Q461 (c)

370. The allegations of Counts 2 through I 4 are hereby realleged and incorporated

herein by reference for the purpose of alleging forfeiture pursuant to 1 8 U.S.C. 98 1 (a) ( l )(C)

and 28 U.S.C. § 246 1 (c). As a result ofthe foregoing offenses, defendants AN HONY 0.

CALABRESE and SANFORD A. PRUDOFF shall forfeit to the United States II property, real

and personal, which constitutes, or is derived from, proceeds traceable to the commission of

Counts 2 through 14; including, but not l imited to:

a.) MONEY JUDGMENT: defendant ANTHONY 0. CALABRESE shall forfeit

property, including, but not limited to, a sum of money equal to the proceeds of ounts 2

through 1 4.

b.) MONEY JUDGMENT: defendant SANFORD A. PRUDOFF sha�l forfeit

property, including, but not limiteq to, a sum of money equal to the proceeds of bount 5 .

SUBSTITUTE PROPERTY

3 7 1 . In the event that any property subject to forfeiture under 1 8 U.S.C § 1 963(a)

and/or 1 8 U.S .C. § 98 1 (a)( l )(C) and 28 U.S.C. § 246 l (c), as a result of any act o� omission of the

defendant(s):

a.) cannot be located upon exercise of due diligence;

b.) has been transferred or sold to, or deposited with a third party;

c .) has been placed beyond the jurisdiction of this Court;

d.) has been substantially diminished in value; or,

e.) has been commingled with other property which cannot be divided without difficulty,

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it is the intent of the United States, pursuant to 1 8 U.S .C. § l 963(m) and/or 2 1 .S.C. § 853(p)

[as incorporated by 28 U . S.C. § 246 I (c)], to seek forfeiture of any other prope of the

defendant(s), up to the value of the forfeitable property described above.

TRUE BILL

Original document -- Signatures on file with the Clerk of Courts, pursuant to th £-Government Act of 2002.

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u.s. v. calabrese & prudoff: bribery concerning programs receiving federal funds 18 usc 666 -...

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