Sunday, October 25, 2020

Four Toledo City Council members arrested on bribery charges

-

The FBI has arrested multiple Toledo city council members accused of taking cash in exchange for votes during what is described in court records as a years-long, sweeping bribery scandal involving some of the city’s highest elected officials.

City council members Tyrone Riley, Yvonne Harper, Larry Sykes, and Gary Johnson are all charged in federal court with accepting bribe payments for official acts and extortion, according to criminal complaints filed Tuesday. Keith Mitchell, an attorney who is accused of funneling bribes to Ms. Harper, also faces bribery and extortion charges. Ms. Harper is charged as well with interstate communications with intent to extort.

FBI Special Agent Eric Smith in a Tuesday afternoon news conference said the councilmen were arrested without incident earlier in the day, while authorities are “actively seeking the whereabouts of Keith Mitchell.”

He said the councilmen committed a “fundamental breach” of the oath they took upon taking office, and violated the public’s trust for their own personal gain. The maximum prison sentence for bribery is 10 years, while the maximum for the extortion charge is 20.

- Advertisement -

Ms. Harper could face an additional two years in prison for the additional charge.

Details in the complaint suggest up to $34,260 changed hands between business owners, the councilmen, and Mr. Mitchell during the course of the investigation.

Image Description“The residents of Toledo should know, as should every other resident of the Northern District of Ohio, that where there are allegations of public corruption and kickbacks, we and our federal partners will be there every time,” U.S. Attorney Justin Herdman said in a statement.

The four council members appeared before Magistrate Judge James Knepp II by video conference in U.S. District Court in Toledo on Tuesday afternoon.

- Advertisement -

U.S. Assistant Attorney Michael Freeman said the government did not seek detention for any of the defendants. Each councilman was released on a $50,000 unsecured bond, meaning if they fail to appear in court, they owe the government that much money. Additionally, they were barred from out-of-state travel and from having contact with co-defendants, victims, and witnesses.

“I don’t know anything; I don’t know how this came about,” Ms. Harper told The Blade as she left the courthouse Tuesday afternoon.

She would not address the accusations of soliciting bribes, nor would she say if she will step down from her post on council.

Her attorney, Jon Richardson, could not be reached for comment. Ronnie Wingate, an attorney representing Mr. Sykes, declined to comment.

Both Mr. Riley, himself an attorney, and Mr. Johnson did not yet have legal representation but are expected to hire lawyers.

Toledo Mayor Wade Kapszukiewicz said in a statement that he was “shocked and heartbroken by today’s arrests.”

“This is a terrible day for Toledo — and for everyone who believes in the good that can be accomplished through public service,” he said.

Matt Cherry, president of city council and a Democrat like his accused colleagues, said he and other councilmen are cooperating with the investigation.

“Corruption of any kind cannot be tolerated and has no place in the government of Toledo and Ohio,” he said in a statement.

Court records suggest that one council member — Mr. Riley — has been soliciting bribes since at least 2013. It was Mr. Riley’s actions that also seemed to initially draw the attention of the FBI.

The criminal probe appears to have started on March 5, 2018, when a federal agent interviewed an unnamed source who owns several commercial properties, primarily gas stations and convenience stores, within the city. That person, who was arrested in 2018 for being in the United States illegally, reported previously providing things of value to Mr. Riley in exchange for his vote on matters before council.

- Advertisement -

Investigators noted that they believe the source married a U.S. citizen in 2000 with the sole intent of obtaining immigration benefits, but was denied lawful permanent resident status based on the fraudulent marriage, which was denied. The source has remained in the United States without lawful immigration status and is still subject to criminal and immigration consequences, according the complaint.

The source in 2013 purchased a gas station and convenience store on Dorr Street. Shortly thereafter, another business wanted to open a competing store nearby, but needed city council to approve a special use permit.

When the source asked Mr. Riley to vote against the permit, the councilman asked for a political donation, according to a criminal complaint.

The source wrote a $300 check to Mr. Riley, the complaint states. Additionally, Mr. Riley asked the source if alcohol could be delivered to the source’s business for Mr. Riley’s upcoming fund-raiser.

“Source 1 opined Riley did so in order to avoid paying the requisite taxes on alcohol by having the alcohol delivered to a liquor license holder. Source 1 agreed to accept the delivery of alcohol,” according to the complaint.

Mr. Riley also requested that the source pay the delivery fee of $300. The source agreed, as long as Mr. Riley didn’t cash the $300 check he/she just provided, court records state. Still, Mr. Riley cashed the $300 check, and the councilman did not reimburse the source for the delivery fee, in essence taking $600.

In May, 2018, the source filed paperwork with the city requesting a “curb cut ” — a small ramp built into the curb of a sidewalk — be placed near a Dorr Street gas station in order to increase traffic flow into the business. The business was in Mr. Riley’s district and such a request required a special permit that needed approval from city council.

Prior to the vote on May 23, 2018, the source met with Mr. Riley for lunch to discuss the matter. Mr. Riley expressed his support for the project. After the meal, Mr. Riley never attempted to pay for his portion of the approximately $130 restaurant bill, according to court records.

“Mr. Riley then ordered a meal (prime rib and carrot cake) ‘to go,’ knowing source 1 would pay for it,” a complaint states.

During a conversation in the parking lot, Mr. Riley also told the source he wanted $2,000 to be delivered to a family member.

During a second lunch meeting on May 31, 2018, the source provided Mr. Riley with $2,000 and informed Mr. Riley that it was the money, “for his support,” according to court records. A second unnamed person, identified as ‘middleman 1’ in court documents, joined the source and councilman for lunch then added $1,000 for Mr. Riley to accept a total of $3,000.

The middleman was directed to take the $3,000 in lieu of Mr. Riley accepting the funds in a public setting, records show. The middleman then purchased four $500 money orders with the money, forging the source’s name as the purchaser with the money orders payable to Mr. Riley.

Over several months, Mr. Riley deposited $1,500 worth of money orders in his “Riley for Council,” account and then deposited the other $500 money order in his “Smith Park Community Coalition” account. Mr. Riley hosts an annual family festival at Smith Park in his district, which includes a bicycle giveaway for kids.

On Dec. 10, 2018, an FBI agent approached the middleman, who admitted to paying bribes to Mr. Riley and acting as a conduit to funnel bribes to the councilman, according to the complaint. That person then agreed to cooperate with the FBI investigation, becoming identified as source 2 in court documents.

Source 2 does not have a criminal history, however his/her actions prior to cooperating are subject to criminal penalties. Internet cafe businesses, which source 2 operated, may be in violation of federal or state gaming laws, records show.

The next day, source 2 spoke to Mr. Riley about the curb cut and indicated the first source was willing to pay more money if necessary.

On Jan. 2, 2019, source 1 — the owner of the Dorr Street gas station — again met for lunch with Mr. Riley to discuss the May, 31, 2018 bribe payment.

The councilman reassured source 1 that he would take care of everything necessary to get the special permit approved, records show. He also asked the source to financially support a re-election event and again left without paying for his meal.

On April 30, Mr. Riley informed source 1 that he garnered enough votes for council to support the curb cut permit, but that he would have to abstain from voting, according to the complaint. He later told the source that his abstention was to make sure that was no “appearance of impropriety.” City council approved the special permit but source 1 was required to install a sprinkler system on the property.

The gas station owner then met with Mr. Riley for lunch on May 9, 2019, thanking the councilman for his assistance. Mr. Riley again left the restaurant without paying for his meal, and added a piece of carrot cake “to go,” according to the complaint.

On Tuesday, Mr. Riley told The Blade while standing outside the federal courthouse that he did not accept any bribes, and he needed to review the charges to understand how the allegations came about.

Internet cafe votes

Before ever becoming an FBI informant, the ‘middleman’ from the gas station curb cut exchange had applied for his own rezoning request to open an internet cafe business on Holland-Sylvania Road in April, 2018, according to the complaint. In that matter, too, the source paid Mr. Riley $3,000 for his support, according to court records.

The cafe came up for a vote on Oct. 23, 2018, and an FBI agent present at that council meeting witnessed Mr. Riley give source 2 a “thumbs up,” in council chambers.

The next day, the source sent an additional payment of $1,000, which Mr. Riley directed to go to the Smith Park Community Coalition.

Federal investigators contend bank records confirmed the source paid Mr. Riley a total of $2,000.

Internet cafes continued to play a role in the FBI probe as it unfolded.

In October, 2018, source 2 applied for a special use permit to open an internet cafe on Central Avenue, which was within Ms. Harper’s district.

The source was not as familiar with Ms. Harper and reached out to a fellow Toledo business owner — unnamed in court records — who received a renewal of a liquor license in April 2016, despite strong opposition from neighboring businesses and Toledo police, court records show.

The fellow business owner told source 2 that he paid approximately $5,000 in bribes through a local attorney — Mr. Mitchell — which was “the only way to ensure her support,” according to court records. The business owner suggested source 2 do the same thing and set up a meeting between them and the councilman.

About two weeks before the permit vote, Ms. Harper called source 2 and said she needed him/her to sponsor two tables at an upcoming event totaling $640, the complaint states. Source 2 on Feb. 12, “provided the requested money orders totaling $640 to Harper’s assistant while inside Council chambers,” according to court records. “Moments later, Harper sat on the Planning Committee and advocated for” the special use permit to go through.

Authorities contend source 2 eventually bribed four city council members for supportive votes: Ms. Harper through Mr. Mitchell, Mr. Johnson, Mr. Riley, and Mr. Sykes. Council unanimously passed the special use permit on Feb. 25, 2020.

Federal authorities point to other special use permit votes regarding internet cafes they contend were influenced by bribes, including two votes related to businesses owned by an acquaintance of source 2.

Ms. Harper, through Mr. Mitchell, is accused of accepting bribes from that acquaintance in exchange for an affirmative vote on July 23, 2019, for a Manhattan Boulevard internet cafe.

That acquaintance in December, 2019, filed another permit request to open an internet cafe, this time on Secor Road, but the Toledo City Plan Commission in February recommended council reject the request.

This time, federal officials allege, it was Mr. Johnson who accepted bribes in exchange for a “yes” vote. Even with the affirmative votes of other councilmen, including Ms. Harper, Mr. Riley, and Mr. Sykes, the permit request failed.

Source 2 reached out to Mr. Johnson to see if there was any way the acquaintance could appeal the decision. Source 2 gave Mr. Johnson $2,000 in cash toward his campaign for Lucas County sheriff, court records show.

The councilman then advised source 2 to call the plan commission staff because “you don’t want it to come through one of us (City Councilpersons), ‘cuz it’s gonna look like a quid-pro-quo,” court records show.

As Mr. Johnson left the federal courthouse Tuesday, he told The Blade he was confused by the whole situation and needed to hire an attorney.

Greg Gilchrist, professor at the University of Toledo’s College of Law, said that, in general, criminal cases involving bribery charges against public officials require evidence that the money or gift was provided in direct exchange for an official act, such as voting a certain way on a particular issue.

That can be difficult to prove, Mr. Gilchrist said, because politics is awash in money and public officials could argue that the funds were received as part of a campaign contribution, or that the person paying out the alleged bribe wasn’t trying to sway a vote but was simply buying goodwill.

“You see this all over politics in more sophisticated ways that never become criminal,” he said.

Both the general public and corporations have the right to spend money, per the Supreme Court, in support of political issues. Lobbying, though, typically isn’t done with an explicit understanding that the money is paying for a direct action from a politician, Mr. Gilchrist said.

The line between legal financial contributions and criminal activity can be blurry, he said.

“I think we have a real problem with the state of the law here,” Mr. Gilchrist said.

He also noted that paying a bribe is illegal as well, but prosecutors often focus bribery investigations on any public officials involved rather than those seeking a favor. That’s because public officials’ misconduct would mean a violation of the public trust, Mr. Gilchrist said, though he advised citizens to withhold judgment until more of the facts are brought to light.

“Right now, all we have is a complaint,” he said.

Tuesday’s events are not the first time Toledo’s elected officials have been charged with accepting bribes.

Former Toledo Councilman Bob McCloskey served about 20 months in federal prison term after pleading no contest in Lucas County Common Pleas Court and guilty in federal court to unrelated bribery convictions in 2006.

The federal conviction stemmed from two FBI stings in which the former Democratic councilman accepted $5,000 from a businessman who wanted assistance from the city on development projects. The conviction in Common Pleas Court stemmed from a 2002 case in which McCloskey was accused of working for the defeat of a rezoning application because the applicants refused to set up a $100,000 prescription drug fund for Pilkington Plc retirees.

McCloskey, of East Toledo, was elected as a district councilman in 1993 and continuously re-elected until 2005 when he was elected to an at-large seat.

In the current case, Mr. Sykes is accused of accepting bribes tied to several votes related to internet cafes, including two owned by source 2 on Reynolds Road.

Source 2, according to the complaint, applied for the permits in September, 2019, and during that same time wanted councilmen to pass a moratorium on additional internet cafes to cut down on competition.

Court records suggest source 2 paid Mr. Sykes $1,000 in exchange for three votes in favor of the cafes and the moratorium legislation. Source 2 paid Mr. Riley $5,500 for those same favors, the complaint states.

Upon his exit from the courthouse, a reporter asked Mr. Sykes if he intends to step down from his elected position:

“For what?” he said.

MUST READ

Julius Baer to deny two former CEOs their bonuses over money laundering scandal

Julius Baer will withhold millions of francs in bonuses from its former chief executives Boris Collardi and Bernhard Hodler, as a result of a...

Goldman Sachs executives to cover part payments of $3 billion fines in 1MDB scandal

Nine current or former Goldman Sachs executives, including CEO David Solomon, will have to pay back hundreds of millions of dollars in compensation over...

Goldman Sachs agrees $3 billion settlement with US DoJ over 1MDB corruption scandal

Goldman Sachs has agreed to pay nearly $3bn (£2.3bn) in the US to end a probe of its role in Malaysia's 1MDB corruption scandal. The...

Hong Kong fines Goldman Sachs $350 million over 1MDB scandal

Goldman Sachs ignored multiple red flags over the multibillion-dollar fundraisings it arranged for state fund 1Malaysia Development Berhad, Hong Kong’s financial regulator said on...

Texas attorney general Ken Paxton fires top aide who accused him of bribery

Lacey Mase, one of the top aides who accused Texas Attorney General Ken Paxton of crimes including bribery and abuse of office, has been fired, she told The...
Advertisement
Advertisement

Latest News

This Week

Judge opposed dismissal of bribery charge against former Portage mayor Synder

A judge denied Thursday two motions to dismiss a soliciting bribes charge former Portage Mayor James Snyder will be retried on, according to court...

Judge orders billionaire Greg Lindberg to report to prison after conviction for bribery

Try as he might to extend his freedom, Durham businessman and convicted felon Greg Lindberg will become a federal inmate on Tuesday. Lindberg, the billionaire...

Former Blue Bell Creameries CEO indicted for fraud linked to 2015 listeria outbreak

The former president and CEO of Blue Bell Creameries L.P., a Texas ice cream company, was indicted Tuesday on wire fraud charges in connection with a scheme...

Goldman to pay over $2 billion in DOJ’s 1MDB Probe

Goldman Sachs Group Inc. has reached a long-awaited pact with the U.S. Department of Justice to pay more than $2 billion for the bank’s...
Advertisement

Adblock Detected!

Our website is made possible by displaying online advertisements to our visitors. Please consider supporting us by whitelisting our website.

Enable Notifications    Ok No thanks