CINCINNATI — A judge will decide in the coming weeks how much prison time Evans Landscaping owner Doug Evans should serve, if any, for a minority contracting scheme that a jury convicted him of last year.
A jury convicted Evans and his vice president of operations, Jim Bailey, of six charges related to wire fraud in December after a month-long trial.
Since the U.S. Probation Office recently finished pre-sentence reports in the case, it is likely that U.S. District Court Judge Michael Barrett will set a court hearing soon.
But attorneys are still fighting about the punishment for Evans and Bailey, which may range from probation and no prison time to as much as five years behind bars.
“This case has been contested from the beginning so it’s no surprise that the government and Mr. Evans’ attorneys are arguing over what would be the appropriate sentence, up to the end,” said Ralph Kohnen, a former federal prosecutor who is now a partner at Taft Stettinius & Hollister.
Defense attorneys and prosecutors filed sentencing memorandums this week about one of the biggest issues remaining for the judge to decide: the amount of loss suffered in the fraud scheme.
The dollar amount of the fraud could impact the range of prison time recommended for the crimes under federal sentencing guidelines.
A jury convicted Evans of creating a front company, Ergon Site Construction, to win minority and small business demolition jobs from the city of Cincinnati and the state.
“In this case there is no simple, readily available method to determine the profit gained by Ergon and/or Evans Landscaping with respect to the city demolitions,” prosecutors wrote. “As a result of the amount of fake invoicing between the parties it is effectively impossible to create a reliable estimate of the profits … as a result of this scheme.”
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.
Prosecutors believe the fraud cost the government $2.86 million – the value of the city and state contracts that Ergon received.
But defense attorneys say there was zero dollar loss, because both city and state governments had all of the contracted demolition projects completed.
“There was no monetary loss – no pecuniary harm – to the government. In other words, they were not swindled out of money and left with nothing to show for it,” wrote Eric Eckes, who is Bailey’s attorney. “The work was complete, the work was satisfactory, the services were rendered in full. The loss amount is zero.”
But prosecutors say the real loss is to the minority and small business contractors who were supposed to receive government work, but lost it because of Evans and Ergon.
“Legitimate SBE (small business enterprise) companies were harmed because their bids were competing against a fraudulent SBE (Ergon) that had the financial resources of a huge company (Evans Landscaping),” Assistant U.S. Attorney Emily Glatfelter wrote in her memorandum. “As a result, Evans Landscaping (through Ergon) could afford to bid very aggressively to obtain many demolition contracts, thereby depriving legitimate SBE’s of the available work.”
Barrett must now decide how to handle the issue of loss. He can either schedule a special court session and hear arguments from attorneys, or simply handle the matter at the sentencing hearing.
“Since the judge sat through this trial for a month, there aren’t going to be many issues that are open in his mind,” Kohnen said. “He is probably going to move to set a sentencing date and get that done in the next few weeks.”
In addition to sentencing Evans and Bailey, the judge must also decide on how large of a fine to impose against Evans Landscaping, which may pay up to $1.25 million.
The four former Evans employees who pleaded guilty in the scheme and testified for prosecutors at trial are also awaiting sentencing.
Korey 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.
Jurors took only four hours to find Evans, Bailey and the company guilty of all charges at the end of the month-long trial, which had involved 40 witnesses and hundreds of documents.
Both Evans and Bailey remain free on bond while they await sentencing.