CINCINNATI — After three weeks and 24 witnesses, federal prosecutors rested their criminal wire fraud case against prominent Newtown businessman Doug Evans on Monday.
Now the defense team will have their turn to present evidence to the jury. But prosecutors have already filed a motion to limit how many character witnesses the defense can bring into U.S. District Court.
The defense team’s first witness, former Evans Landscaping general counsel Tony Muto, described Evans as hardworking, proud of his company, and dedicated to customer service.
“He takes great pride in not laying off an employee ever,” outside of reasons such as drug use, Muto testified.
As the recession deepened in 2008, Evans looked for ways to bring in more work so that he could avoid laying off any of his 250 employees, Muto testified.
So Evans decided to partner with a minority company in order to win government work, Muto said.
Muto, who is retired but still works for Evans part time, said the idea for that separate company – Ergon Site Construction -- didn’t come from Evans. Instead it came from former CFO Maurice Patterson and longtime advisor Tony Schweier, who is a shareholder at Cincinnati accounting firm Clark Schaefer Hackett.
“Mr. Patterson and Mr. Schweier were the masterminds of setting up this business,” Muto testified. “I relied on their knowledge and experience to let me know how to get things done.”
Patterson has taken a plea deal admitting his guilt and testified against Evans at trial.
But Schweier, who has not been charged with a crime, testified that he warned Evans that Ergon was a bad idea. He eventually ended his 22-year relationship with Evans in 2014 because of concerns about Ergon.
“My concern was this was not a legitimate MBE (company) and it would end badly – one way or another,” Schweier testified.
Whatever jurors believe about the true relationship between Ergon and Evans Landscaping will likely determine the outcome of the trial.
Prosecutors accuse Evans of creating a front company, Ergon, to win minority and small business demolition jobs from the city of Cincinnati and the state worth millions.
Three former Evans managers signed plea deals in exchange for their testimony. And Korey Jordan, an IT employee for Evans who eventually became Ergon’s owner, also signed a plea deal and testified as a witness for prosecutors.
“I’m a black man in this city and I did this and I shouldn’t have done it,” Korey Jordan testified on Nov. 19, wiping away tears. “I went against my belief system.”
Several employees testified that Jordan had no control over Ergon’s financials, the jobs it bid on, the employees it hired, or any purchases. All of that was done by Evans’ employees.
John Dietrich, former CFO at Evans, testified that he routinely drained Ergon’s bank account when it got paid for city jobs, and moved the money to Evans Landscaping.
“Our charge was to get Ergon’s income as low as possible,” Dietrich testified.
But Muto described a very different relationship between Evans and Ergon. He said the two companies were separate, independent and legal.
“Mr. Evans would not have lost $300,000 if he was controlling Ergon,” Muto testified, referring to a line of bank credit, secured by Evans, that Jordan had nearly maxed out.
Evans has insisted he was just trying to help Jordan start his own minority-owned business by giving him startup money, guaranteeing a line of credit and teaching him the business. The two men coached youth football together.
Evans relied on his longtime advisor, Schweier, to set up the new business correctly and legally because he had experience with minority business enterprises, Muto testified.
“My understanding is that he had the knowledge, experience and contacts in the business world … to set up these types of businesses,” Muto testified about Schweier. “He was the architect of the plan.”
But Assistant U.S. Attorney Emily Glatfelter zeroed in on several emails that Muto sent about Ergon in her cross-examination, including one that stated, “For Ergon - need to add laborers to make it look real.”
Evans faces trial with Jim Bailey, who is vice president of operations at Evans Landscaping. Both men face six charges related to wire fraud and up to 103 years in prison if convicted.