CINCINNATI - The inner workings of Evans Landscaping’s payroll, accounting and billing were exposed during testimony Wednesday in U.S. District Court.
Evans’ longtime bookkeeper, Larry Zapolski, testified for more than four hours as prosecutors tried to show a paper trail between Evans Landscaping and a front company they allege was created to win minority and small business contracts from the city and state.
As the criminal trial of Doug Evans, owner of Evans Landscaping, moves into its third week, prosecutors may be close to resting their case against the prominent Newtown businessman.
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.
Two city of Cincinnati employees testified about numerous complaints they received and “red flags” they saw, stemming from Ergon’s relationship with Evans.
Al Taylor, assistant supervisor in the city’s buildings and inspections department, frequently noticed expensive trucks on Ergon job sites and wondered how a start-up small business enterprise could afford that equipment.
“Those were million dollar trucks on job sites, so yeah, I had some questions about how someone financed that, being a small business enterprise,” Taylor testified.
What jurors believe about the true relationship between Ergon and Evans Landscaping could determine the outcome of the trial.
Ergon often disclosed to the city that Evans was a subcontractor working on their job sites. But the percentage of work it allowed Evans to do has come under scrutiny.
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.
Ergon was only supposed to subcontract out 25 to 40 percent of its work, Thompson testified.
But prosecutors showed records in court that Evans routinely collected a 70-percent share of the money the city paid to Ergon for demolition jobs, and as high as 90 percent.
On state jobs where Evans used Ergon as a trucking subcontractor, Evans kept as much as 95 percent of the paycheck, records showed.
Prosecutors struggled with Zapolski, who repeatedly answered their questions with, “I don’t recall.”
Zapolski, who still works at Evans Landscaping as a controller, came to the courtroom with his own attorney, Mike Allen. He has not been charged with a crime.
Prosecutors tried to show that Ergon was part of Evans Landscaping.
Under cross-examination by Evans’ attorney, Ben Dusing, Zapolski said the two companies were completely separate. He kept an eye on Ergon’s cash balance sheet because he worried that owner Korey Jordan may steal money.
“In the back of my head I’ve always had the fear of if Korey would steal money,” Zapolski said.
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.