CINCINNATI — A federal judge on Wednesday refused to overturn the fraud convictions of Evans Landscaping owner Doug Evans or his vice president of operations Jim Bailey. He also declined to give either of them a new trial.
U.S. District Court Judge Michael Barrett ruled late Wednesday that convictions for minority contracting fraud against both men will stand. A sentencing hearing will likely take place in three to four months.
“This is not a case of overbidding, gorging profits, kickback payments to government officials, or even billing for services not rendered,” Barrett wrote in his opinion. “Instead, the jury determined that defendants obtained contracts from the two public entities through a fraudulent scheme.”
Prosecutors accused Evans of creating a front company, Ergon Site Construction, and using black IT employee Korey Jordan as a figurehead to win millions of dollars in minority and small business demolition jobs from the city of Cincinnati and the state of Ohio.
In an effort to win a new trial, Evans’ attorney Ben Dusing criticized the jury, prosecutors, witnesses and even the judge, who he said committed legal errors during the trial.
But Barrett rejected all 15 accusations of wrongdoing that defense attorneys claimed occurred during the month-long trial, which ended in a guilty verdict on Dec. 10, 2018, after jurors spent fewer than four hours deliberating.
Evans argued that he did not coerce Jordan to do anything but was instead trying to protect his investment. Barrett disagreed.
“However, the evidence presented at trial showed that Ergon was regularly discussed at the weekly meetings of Evans Landscaping’s management,” Barrett wrote, noting that Evans and his managers sent emails about Ergon’s staffing, control, and bank account balance.
At trial, jurors heard from four former Evans employees who testified that fraudulent invoices, checks and photos were created to make Ergon seem like a legitimate minority business when in fact it was part of Evans.
“Based on this evidence, along with other substantial evidence presented at trial, any rational trier of fact could have found that the Evans defendants controlled Ergon as part of a scheme to defraud the city of Cincinnati and other governmental entities,” Barrett wrote.
Bailey argued he should be acquitted because he was not part of any decisions that involved Ergo, but Barrett rejected that.
Testimony showed that Bailey attended weekly management meetings where Ergon was discussed, that he was involved in hiring Ergon employees and responding to city audits, and that he purchased magnets with the Ergon name which were large enough “to cover Evans up” on equipment, Barrett wrote.
“From this evidence, and other evidence presented at trial, any rational trier of fact could have found that Bailey knew there was an agreement to commit the crime of wire fraud, and he voluntarily joined the conspiracy,” Barrett wrote.
Now Barrett must decide how much prison time, if any, that Evans and Bailey will serve for convictions of two counts of conspiracy to commit wire fraud and three counts of wire fraud. Prosecutors agreed to drop the misprision of a felony charge.
Although Barrett ruled against the defense on their motions for new trials and acquittals, he sided with them on a key factor: The dollar amount of the fraud.
This is important because it impacts the range of prison time recommended for the crimes under federal sentencing guidelines.
"While we are disappointed in the court's decision to dismiss the charges, we believe the court made a proper decision as to the loss amount. The city received what it contracted for and there was no loss," said Bailey's attorney, Martin Pinales.
Prosecutors believe the fraud cost the government $2.86 million — the value of the city and state contracts that Ergon received.
However, defense attorneys said there was zero dollar loss, because both city and state governments had all of the contracted demolition projects completed.
“No one really disputes that all the contracted work got done, and at the lowest possible price,” Dusing argued in court.
Barrett agreed, writing in his opinion, “There was evidence at trial that services were performed as result of the contracts.”
This means it is more likely that Evans and Bailey will serve a shorter prison term, or perhaps no prison at all. The court’s presentencing department will make a recommendation on a sentence, but Barrett will have the final say.
Barrett must also sentence the former Evans employees who pleaded guilty in the scheme and testified for prosecutors at trial.
Jordan, who was the figurehead of Ergon Site Construction, pleaded guilty to conspiracy to commit wire fraud.
Former general manager Mike Moeller, who bid minority state demolition jobs worth $10 million using Evans and Ergon, pleaded guilty to conspiracy to commit wire fraud.
Former CFO Maurice Patterson pleaded guilty to conspiracy to commit wire fraud, and former CFO John Dietrich pleaded guilty to misprision, or concealment, of a felony, for their roles in the scheme.
Also up to Barrett: How large a fine Evans Landscaping should be asked to pay. The upper limit is $1.25 million.