CINCINNATI -- Despite numerous complaints and “red flags” about Ergon Site Construction and its close relationship with Evans Landscaping, the city of Cincinnati never stripped Ergon of its small business enterprise certification and continued to give it demolition jobs.
Two city employees testified for several hours on Tuesday about the numerous complaints they received about Evans Landscaping employees and equipment on job sites that were supposed to be worked by Ergon.
“I was basically told they were certified and it was not my concern,” said Al Taylor, an assistant supervisor in the city’s buildings and inspections department.
As the criminal trial of Doug Evans, owner of Evans Landscaping, moves into its third week in U.S. District Court, city of Cincinnati and state of Ohio employees are being questioned about how they awarded and monitored work given to Ergon.
Prosecutors allege that Evans and an IT employee, Korey Jordan, created a new company, Ergon Site Construction, in 2008 to act as a front for Evans to win small business and minority contracts with the state and the city of Cincinnati – 140 city demolition contracts worth more than $2 million.
Evans is a well-known figure on the city’s East Side and one of Newtown’s biggest landowners. He built a landscaping empire from a humble beginning hauling mulch in a pickup truck as a teenager.
The company is now at the center of a month-long trial with allegations of wire fraud and schemes to defraud the city and state.
Rochelle Thompson, who ran the city’s contract compliance office for nine years, testified that Ergon was a “hot topic” in her office because it got complaints about Evans Landscaping working on job sites that were supposed to be run by the small business.
During several audits, site visits and meetings, Thompson warned Jordan to stay independent from Evans. But she testified that she never disciplined the company or stripped its certification to bid for city jobs.
“We were trying to determine if Ergon should have been certified,” Thompson said.
Thompson testified that she believed Jordan merely had a “friendly” relationship with Doug Evans, built over their son’s sporting events.
What jurors believe about the true relationship between Ergon and Evans Landscaping could determine the outcome of the trial.
Evans has insisted he was just trying to help Jordan start his own minority-owned business by giving him $85,000 in startup money, guaranteeing a line of credit and teaching him the business. The two men coached youth football together.
But prosecutors say the two companies conspired to commit fraud.
“This case is about lying and cheating,” assistant U.S. Attorney Emily Glatfelter told the jury during her opening statement. “The defendants lied and cheated to gain an unfair advantage against their competitors.”
Evans faces trial with Jim Bailey, who is vice president of operations at Evans Landscaping. Both men face the same charges: two counts of conspiracy to commit wire fraud, three counts of wire fraud, and one count of misprision of a felony. The company, Evans Landscaping, faces five charges and a potential $1.25 million in fines.
FBI agents began to secretly investigate Evans in late 2013. Over the years they conducted surveillance, executed four search warrants, interviewed 70 people and collected 2 million documents.
Todd McGonigle, who works for Ohio’s Equal Opportunity Division, testified about the EDGE certification it awarded to Ergon in 2012.
Evans Landscaping was never mentioned in the lengthy application that Ergon filed in order to win minority contracts, he testified.
The application lists questions about who controls payroll and who the company has partnerships with in order to determine if it is a “front company” for a bigger business, McGonigle testified.
“That’s a term that is used for a business that is set up by another business to give the appearance that it is a certified MBE and it passes through contracts for work,” McGonigle testified.
Last week Jordan testified that he controlled no money and had no decision-making power at Ergon, despite being listed on paper as the owner. He had to ask Evans to pay for all expenses, such as gas or a new laptop. And he routinely signed 20 blank company checks at a time, for use of Evans, he testified.
The testimony of Cincinnati employees is key to the case because Evans’ attorney, Ben Dusing, has long argued that they knew about the close relationship between the two companies. In fact, when Ergon made mistakes on job sites, the city called Evans Landscaping to fix them.
By 2013, Ergon was winning so many demolition jobs, that it couldn’t keep up with the work. Taylor testified that he eventually stopped giving Ergon new work.
Taylor noticed peculiarities on Ergon job sites – such as the fact that Jordan was rarely present and did not do much site work. He also noticed that Evans employees interchangeably wore Evans and Ergon work shirts.
Thompson also had worries about Ergon. She sent Jordan a letter warning him not to share personnel, supplies or equipment with another business that wasn’t certified as small business enterprise.
“They have to be separate entities, they cannot cross the line,” Thompson testified.
Taylor continues his testimony on Wednesday.