Russo Information

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IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF OHIO EASTERN DIVISION

UNITED STATES OF AMERICA,

Plaintiff,

v.

FRANK P. RUSSO

Defendant.

The United States Attorney charges:

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CASE NO. JUDGE ,[.lor .~

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Title 18, United States l:J

Code, Sections 2, 371, 1341, 1349, )5~2

1951,7206(1). '

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GENERAL ALLEGA TrONS

At all times material to this Information:

Public Entities

1. Cuyahoga County, Ohio ("County") was a government agency as that term is

defined in Title 18, United States Code, Section 666(d}(2}, that received benefits in excess of

$10,000 during each calendar year from 1998 through 2009 under a federal program involving a

grant, contract, subsidy, loan, guarantee, insurance and other form of federal assistance. Its

departments included the Cuyahoga County Auditor's Office ("Auditor'S Office"), Cuyahoga

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County Engineer's Office ("Engineer's Office"), and Cuyahoga County Sheriff's Office ("Sheriff's Office"), each of which was headed by an elected public official.

2. The Board of Cuyahoga County Commissioners ("County Commissioners") was

the central governmental body of the County, consisting of three co-equal members who were elected at large for four-year terms. Each year, the County Commissioners elected a president, who served on the Board of Revision and the County Records Commission. The County Commissioners' powers included budgeting, levying taxes, issuing bonds, letting contracts for public works services, monitoring expenditures, administering purchases, and making personnel decisions. The County Commissioners were also responsible for approving all collective bargaining agreements and administering federal grant monies.

3. The County Commissioners had authority to appropriate funds for the operations

of their own agencies and other elected County officials, including the County Auditor, County Engineer, County Prosecutor and the Cuyahoga County Court of Common Pleas ("Common Pleas Court").

4. The operations of the County, the County Commissioners, the Auditor's Office, the

Engineer's Office, Sheriffs Office and Common Pleas Court affected interstate commerce.

5. The Ohio Public Employees Retirement System ("OPERS") was a state pension

fund located in Columbus, Ohio. OPERS provided retirement, disability and survivor benefit programs for public employees throughout the State of Ohio, who were not covered by another state or local retirement system. OPERS was established in or around 1935 to make available a secure means to provide retirement for Ohio public employees. The system was originally named

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the Public Employees Retirement System ("PERS") and changed in or around 2003 to become OPERS. In order to obtain OPERS benefits, it was necessary for the public employee to complete a Form A, and mail the completed form to OPERS in Columbus, Ohio.

Private Entities

6. Alternatives Agency ("AA") was a non-profit organization that provided treatment

and rehabilitation services to post-incarceration individuals in criminal cases who had been ordered to receive such services. The funding AA received from the County was controlled, in part, by the Cuyahoga County Corrections Planning Board, which fell under the auspices of the Common Pleas Court. AA was located on East 55th Street in Cleveland, Ohio. Its operations affected interstate commerce.

7. Belcuy Partners ("Belcuy") was created in or around December 2006 as a

partnership between Bruce Zaccagnini and Teresa Damiani. Its operations affected interstate

commerce.

8. Mont Granite was founded in or around 1989 and supplied natural stone products

with showrooms and indoor warehouses in Ohio, Pennsylvania, and Michigan. Mont Granite Real Properties ("MGRP"), a sister company of Mont Granite, owned the real estate on which Mont Granite's County showroom was located. Both companies' operations affected interstate

commerce.

9. Salva Stone Design ("Salva Stone") was a granite retailer located in Cleveland,

Ohio. Salva Stone purchased granite from suppliers and custom fabricated the granite before installing it for customers. It was also one of the local trade industry professionals that purchased

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Mont Granite's products for use by residential customers. Its operations affected interstate

commerce.

10. Business 16 was a commercial real estate appraisal business located at various

times in Athens, Ohio, Columbus, Ohio and Carmel, Indiana. Business 17 was a commercial real estate appraisal business located in New lersey. Business 17 wholly owned Business 18. In or around March 1998, Business 16 and Business 18 formed ajoint venture, Business 19, to perform commercial appraisal work for the Auditor's Office. Louis C. Damiani, now deceased, while not a party to the joint venture, had substantial control over Business 19. In or around lanuary 2007, Business 20 assumed Business 16's share in Business 19. Robert Scrivens, lr. was a principal in Business 17 and Business 20 until his death in or around November 2008. The operations of Businesses 16, 17, 18, 19 and 20 affected interstate commerce.

1 I. Business 30 was an Ohio limited liability company, operating to provide consulting

and government relations services. Its operations affected interstate commerce. FRANK P. RUSSO was interested in Business 30's success. Business 30's clients included Business 22 and Business 40.

12. Business 34 was a printing company located in Garfield Heights, Ohio.

13. Business 36 was a real estate development company located in Euclid, Ohio, whose operations affected interstate commerce.

14. Business 39 was company that offered energy services, integrated facility

management services, and other services to commercial, institutional and industrial customers. Business 39 was located in Middleburg Heights, Ohio, and its operations affected interstate

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commerce.

15. Business 40 was a company that offered contracting, construction management and

design build services. Business 40 was located in Pennsylvania and its operations affected interstate commerce.

Public Officials and Employees

16. Public Official 1 ("PO I") was an elected County official, whose responsibilities

included budgeting, levying taxes, issuing bonds, letting contracts for public works services, monitoring County expenditures, administering all purchases for County use, and approving funding to build and maintain certain roads. In addition, PO I had the authority to influence personnel decisions within the County, including hiring, approving raises or promotions, terminating employment, and establishing job duties.

17. Defendant FRANK P. RUSSO ("RUSSO") was the County Auditor, an elected

County official. He was the County's chief fiscal officer, with overall responsibility for all County funds. As the Auditor, RUSSO served as secretary to the Board of Revision, which had responsibility to rule on property assessments and hear valuation complaints, and as Secretary to the ADP Board, which reviewed information technology related purchases and contracts for the County. RUSSO had the power to influence contracts and expenditures within the Auditor's Office and had authority over personnel decisions within the Auditor's Office, including hiring, approving raises or promotions, terminating employment, and establishing job duties. RUSSO had an ownership interest in Allstate Realty company.

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18. Because of his high ranking position within the County and his political longevity,

RUSSO exerted significant influence over other public officials in the County.

19. John Kevin Kelley ("Kelley") was employed in various positions within County

government from approximately 1998 through June 2009. In 2004, Kelley became the Geographic Information Systems ("GIS") project manager. His salary was funded in equal parts by the budgets of the Engineer's Office, the Auditor's Office, and the County Commissioners. Kelley had the power to influence public policy, contracts and expenditures. In addition to his public employment, in or around May 2003, Kelley created a consulting business, J. Kevin Kelley Consulting, LLC.

20. Santina Klimkowski ("Klimkowski") was employed at the Auditor's Office as a

Department of Appraisal Specialist, responsible for overseeing the commercial real estate appraisal process.

21. Kevin F. Payne ("Payne") served as the Chief of Staff at the Engineer's Office

from in or around September 2002 to in or around February 2009. In that capacity, Payne had the power to influence public policy, contracts and expenditures, and he oversaw hiring and promotion in the Engineer's Office. Payne was Kelley's supervisor at the Engineer's Office. Payne was also an attorney licensed to practice law in the State of Ohio. The operations of Payne's law practice affected interstate commerce.

22. Joseph Gallucci ("Gallucci") was a candidate for County Auditor in 2006 and was

later employed by the County Auditor's Office.

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23. Joseph P. O'Malley ("O'Malley") was an attorney licensed to practice law in the

State of Ohio. O'Malley was a County employee who worked for RUSSO from in or around March 1997 to in or around April 2004. From on or about January 1,2008, to on or about December 31, 2009, O'Malley worked as independent contractor for the County Information Services Center.

24. Daniel Weaver ("Weaver") was employed by the County as the Director of the

Information Services Center, a position to which RUSSO appointed Weaver. Prior to becoming the Director, Weaver had worked in the County Auditor's Office as RUSSO's Chief Deputy Auditor and at the Board of Revision.

25. Public Official 4 ("P04") was a Common Pleas Court judge.

26. Public Official 7 ("POT') was an elected public official with the power to influence certain aspects of contracting for a municipality located within the County. P07 was Ferris Kleem's relative.

27. Public Official 11 ("POll") was a candidate for County Probate Court, who won

election in or around November 2008. PO 11 was a relative of RUSSO.

28. Public Official 12 ("PO 12") was an elected County official responsible, among

other duties, for maintaining public safety, custodial care, law enforcement and selling foreclosed properties. PO 12 had the power to influence personnel decisions within the office to which PO 12 was elected, including hiring, approving raises or promotions, terminating employment, and establishing job duties.

29. Public Official 16 C'POI6") was a Common Pleas Court judge.

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30. POI, RUSSO, Klimkowski, Kelley, and Payne were agents of the County as

defined in Title IS, Section 666(d)(I), United States Code.

31. Public Employee 2 ("PE2") was hired by the Auditor's Office on or about May 20,

2002. PE2 had a close personal relationship with Kevin Payne.

32. Public Employee 3 ("PE3") was employed by the Engineer's Office from on or

about April 17,2000 until on or about May 4,2009. PE3 was RUSSO's relative.

33. Public Employee 4 ("PE4") was an Auditor's Office employee, who was a close

friend and confidante of POI and RUSSO.

34. Public Employee 5 ("PE5',') was employed in various positions in the County,

including serving as the deputy auditor for the Auditor's Office. PES also worked on the GIS project.

35. Public Employee 7 ("PET') was employed by the Auditor's Office and could

influence personnel decisions of that office.

36. Public Employee 13 ("PE13") was an employee ofthe County Commissioners'

Office with management and policy responsibilities.

37. Public Employee 20 ("PE20") was a County employee who reported to P04.

3S. Public Employee 24 ("PE24") was a Sheriffs Office employee.

39. Public Employee 25 ("PE25") was an Auditor's Office employee and a relative of

BE30.

40. Public Employee 31 C"PE31") was a high-ranking member of the Auditor's Office,

whose responsibilities included human resources.

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41. Public Employee 32 ("PE32") was a County employee who worked for the

Auditor's Office and subsequently for P016.

42. Public Employee 40 ("PE40") was an Auditor's Office employee, who obtained

employment with the County Sheriffs Office in or around April 2008. PE40 had an interest in Business 32.

43. Public Employee 43 ("PE43") was employed by the Auditor's Office.

44. Public Employee 47 ("PE47") was employed by the Auditor's Office and was a member of the MHCS School Board.

45. Public Employee 49 ("PE49") was employed in several roles in the County,

including the Auditor's Office.

46. Public Employee 50 ("PE50") was employed by the Auditor's Office.

47. Public Employee 53 ("PES3") was an Auditor's Office employee, who also had an interest in Business 34.

48. Public Employee 55 ("PE55") was a County employee and RUSSO's domestic

partner.

Other Individuals

49. Timothy J. Armstrong ("Armstrong") was an attorney licensed to practice law in

the State of Ohio. Armstrong was one of four partners in the law firm of Armstrong, Mitchell, Damiani and Zaccagnini ("AMDZ") located in Cleveland, Ohio. The operations of AMDZ affected interstate commerce. AMDZ dissolved in or around December 2006.

50. Dinesh Bafna ("Bafna") was the president of Mont Granite.

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51. Louis C. Damiani ("Damiani") was an attorney licensed to practice law in the State

of Ohio until his death on or about September 4, 2006. Damiani was a partner in AMDZ until its dissolution in or around December 2006.

52. Daniel P. Gallagher ("Gallagher") was employed in the Engineer's Office until he

retired in 2002. Thereafter, he served as a consultant, eventually forming a consulting company.

53. Ferris Kleem ("Kleem") was the Vice-president of Blaze Construction Co., Inc.

("Blaze Construction"), president and majority owner of Blaze Building Corporation ("Blaze Building"), half owner of Phoenix Cement, Inc. ("Phoenix"), and sole owner of F JR Properties, Ltd., all located in Berea, Ohio.

54. BE13 was a principal and agent of Business 30. BE13 facilitated the finding of

business, including public business, for Business 30's clients. BEl3 was RUSSO's relative.

55. Brian Schuman ("Schuman") was an employee of AA.

56. John Valentin ("Valentin") was a principal in Salva Stone.

57. Bruce Zaccagnini ("Zaccagnini") was an attorney licensed to practice law in the State of Ohio. Zaccagnini was a partner in AMDZ until its dissolution in or around December

2006.

58. Attorney 1 was an attorney licensed to practice law in the State of Ohio and a

partner in a law firm doing business in the Northern District of Ohio and elsewhere. The law firm's operations affected interstate commerce. Attorney 1 also served as a lobbyist/consultant for clients seeking municipal contracts. His clients included AA.

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59. Attorney 2 was an attorney licensed to practice law in the State of Ohio. Attorney

2 was a partner in AMDZ until its dissolution in or around December 2006.

60. Business Executive or Employee 30 ("BE30") was a retiree who had worked in the

construction industry.

61. Business Executive or Employee 32 ("BE32") had an interest in Indian l-Iills

Senior Community, Inc., the operations of which affected interstate commerce. BE32 was

associated with Business 35, which was a real estate company that provided fully integrated

planning and development services for retail projects throughout Northeast Ohio, in addition to

providing property management for apartment owners. The operations of Business 35 affected

interstate commerce.

62. Business Employee or Executive 34 ("BE34") was associated with Business 39.

63. Business Executive or Employee 36 ("BE36") owned Business 39.

The United States Attorney charges:

COUNT!

(Hobbs Act Conspiracy, 18 U.S.C. § 1951)

64. Paragraphs 1,4,7,10,17,20,49,51,57 and 59 of the General Allegations are re-

alleged and incorporated by reference as if fully set forth herein.

65. Beginning in or around March 1998 and continuing until on or about May 26,

2009, the exact dates being unknown to the United States Attorney, in the Northern District of

Ohio, Eastern Division and elsewhere, Defendant FRANK P. RUSSO and other individual

persons known and unknown to the United States Attorney, did knowingly and intentionally

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combine, conspire, confederate and agree with each other to obstruct, delay and affect commerce and the movement of articles and commodities in commerce by extortion; that is, RUSSO and Klimkowski obtained property not due to them or their offices, namely substantial quantities of cash, from Attorney 2, Armstrong, Zaccagnini, Louis C. Damiani, AMDZ and Teresa Damiani, with their consent, under color of official right.

OBJECT OF THE CONSPIRACY

66. It was the object of the conspiracy that RUSSO and Klimkowski abused their

official positions in the Auditor's Office by performing official acts and promising to perform official acts for the benefit of Business 16, Business 17, Business 18, Business 19, AMDZ, Belcuy Partners, Louis C. Damiani, Zaccagnini, Armstrong, Attorney 2, Teresa Damiani and others, in return for RUSSO and Klimkowski receiving cash kickbacks.

MANNER AND MEANS

It was part of the conspiracy that:

67. In or around March 1998, Damiani and RUSSO negotiated bribes and kickbacks

that AMDZ and its partners would pay to RUSSO, in return for RUSSO awarding Business 16 or Business 19 a contract with the Auditor's Office to perform commercial appraisal services.

68. RUSSO performed official acts to assist Business 19 in obtaining contracts with

the Auditor's Office totaling approximately $21,480,000 (collectively hereinafter "Commercial Appraisal Contracts").

69. Beginning in or around March 1998 and periodically thereafter, RUSSO received

cash bribes and kickbacks pursuant to RUSSO's discussions with Damiani. As the scheme

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progressed, Klimkowski began serving as an intermediary for the payments to RUSSO and also began receiving cash bribes and kickbacks.

70. The County paid Business 19 on the Commercial Appraisal Contracts in

installments according to a negotiated fee schedule.

71. In or around December 2006, AMDZ dissolved and the kickbacks to RUSSO and

Klimkowski continued under Zaccagnini's direction, with Belcuy performing the role AMDZ had performed.

72. On or about July 28, 2008, Klimkowski learned that the Federal Bureau of

Investigation ("FBI") was executing search warrants at RUSSO's residence and at the Auditor's Office in connection with a corruption investigation.

73. On two occasions from in or around October 2008 through in or around December

2008, RUSSO asked Klimkowski for $2,000 from the July kickback, which she gave him.

74. In or around December 2008, Klimkowski gave RUSSO the last $5,000 of the July

24, 2008 payment from Zaccagnini.

75. During the course of the conspiracy, Armstrong, Zaccagnini, Louis C. Damiani,

Attorney 2, Teresa Damiani and AMDZ generated approximately $1,374,000 in cash for the purpose of paying bribes and kickbacks related to the Commercial Appraisal Contracts.

All in violation of Title 18, United States Code, Section 1951.

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The United States Attorney further charges:

COUNT 2


76. Paragraphs 1-4,6, 16-19,36,55 and 58 of the General Allegations are re-alleged

and incorporated by reference as if fully set forth herein.

77. Beginning in or around November 2007 and continuing until in or around May




combine, conspire, confederate and agree with each other to obstruct, delay and affect commerce

and the movement of articles and commodities in commerce by extortion; that is RUSSO obtained

property not due to him or his office, namely travel from Cleveland, Ohio to Las Vegas, Nevada,

from AA, with its consent, under color of official right.


78. It was the object of the conspiracy that RUSSO and others secretly used their

official positions to enrich themselves by accepting things of value from AA, in return for

favorable official action.

MANNER AND MEANS


79. In or around December 2007, after County Probation Department officials told

Schuman that the County intended to eliminate its contract with AA for 2008, Schuman and

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Attorney 1 asked Kelley to help restore AA's funding.

80. Kelley asked RUSSO to assist in restoring AA's funding and in obtaining

additional funding.

81. In response to Kelley's request, in or around December 2007, RUSSO, acting in

his official capacity as County Auditor, talked to other public employees with responsibility and influence over funding.

82. On or about December 21, 2007, Kelley informed Attorney 1 he had good news

regarding AA. Kelley indicated that PE 13 told RUSSO that the County was re-working the budget, and AA would be back in the budget. Kelley then instructed Attorney 1 to call and thank RUSSO. Attorney 1 agreed and said, "You and I need to get together on this too, you know what

I mean."

83. On or about December 21,2007, Kelley told Schuman that a County employee

called RUSSO, telling them that a funding mechanism was in place to reinstate AA in the County budget. Kelley said that RUSSO was not given an exact number, but PE13 told RUSSO things "look good" for AA. Kelley emphasized the importance of AA receiving a budget allocation, because after the budget was in place, RUSSO could influence other County employees to increase AA's allocation after the Health and Human Services levy passed.

84. On or about January 11,2008, Kelley told Attorney 1 that AA was allocated

$250,000 because AA had only used $500,000 the previous year even though it was budgeted $600,000. Kelley and Attorney 1 then agreed it would be easier for the County to amend and add money in the future, once AA was included in the budget. Kelley said that he was on his way to

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AA because Kelley just had a meeting with RUSSO, who was "very clear on what his thoughts are." Attorney 1 replied, "Understood." Attorney 1 and Kelley agreed to meet the following Monday. Kelley then stated, "I am just going to, you know, be coy about it with these guys, but they got to .... It's one thing to hold me back a couple months." Attorney 1 replied, "I understand," and inquired whether "the two boys on 55 [referring to AA located on E. 55th Street]" would know about it before he and Kelley met. Kelley said he was on his way to meet with them.

85. On or about February 14,2008, the County Commissioners approved a $250,000

allocation for Residential Facilities for the Work Release Program for the period May I, 2008 through December 31, 2008, and authorized the Office of Procurement & Diversity to advertise for bids.

86. On or about April 6, 2008, Kelley telephoned Schuman and said, "Hey, we're

heading out now [on the Las Vegas trip]. The guys [RUSSO and others] wanted me to call and thank you." Schuman replied, "Oh, I hope everybody has a good time."

87. On or about April 6, 2008, RUSSO and others boarded a Continental Airlines

flight from Cleveland to Las Vegas.

88. On or about April 17,2008, the County Commissioners approved a $250,000

contract with AA for residential facilities for the work release program.


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COUNT 3

(Conspiracy to Commit Bribery Concerning Programs Receiving Federal Funds, 18 U.S.C. § 371)

89. Paragraphs 1-3,16-19,30,33, and 53 of the General Allegations are re-alleged and

incorporated by reference as if fully set forth herein.

INTRODUCTION

HUD-funded County Grant to City of Berea

90. Beginning in or around the mid-1990's, Ferris Kleem engaged in a series of fund

raising efforts to benefit the City of Berea. In approximately 2006 and early 2007, and at Kleem's

request, RUSSO used his influence to assist the City of Berea obtain a $150,000 grant funded by

the United States Department of Housing and Urban Development ("HUD") and awarded by the

County for the Coe Lake Nature Trail and Bridge Project.

The Juvenile Justice Center Project

91. In 2006, the County Commissioners approved construction of a new Juvenile

Justice Center at East 93rd Street and Quincy Avenue in Cleveland, Ohio, at an estimated cost of

approximately $160 million (hereinafter "JJC project").

92. On or about December 13,2007, the County Commissioners issued requests for

proposals ("RFPs") for various portions of the JJC project. Blaze Building sought the General

Trades portion of the JJC project budgeted at approximately $22.6 million. Phoenix Cement

sought the concrete portion of the project valued at approximately $4.6 million.

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93. Phoenix Cement was the low bidder on the concrete portion and on or about March

20, 2008, received the $4.6 million contract.

94. On or about March 20, 2008, the County Commissioners voted to reject all bids

received for the general trades portion of the JJC and ordered that the general trades be rebid with revised specifications and estimates.

95. On or about April 3, 2008, the County Commissioners approved an addendum to

the general trades portion of the JJC project, making technical changes and changing the estimated cost from $36,800,000 to $37,000,000.

96. On or about April 7, 2008, the bids for the general trades were opened. Blaze

Building bid approximately $38 million but was the second lowest bidder and did not receive the contract, which was awarded to the low bidder on or about April 24, 2008.

Federal Funds

97. The County received benefits in excess of $10,000 during the years May 31, 2006

through May 30, 2007, and May 31, 2007 through May 30,2008 under a Federal program involving a grant, contract, subsidy, loan, guarantee, insurance and other form of Federal assistance.

THE CONSPIRACY

98. From in or around Fall 2006 and continuing through on or about May 23, 2008, the

exact dates being unknown to the United States Attorney, in the Northern District of Ohio,

Eastern Division and elsewhere, Defendant FRANK P. RUSSO and others known and unknown to the United States Attorney, did knowingly and intentionally combine, conspire, confederate and

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agree with each other to commit an offense against the United States, in violation of Title 18, United States Code, Sections 666(a)(l)(B) and 666(a)(2).

OBJECTS OF THE CONSPIRACY

99. It was an object of the conspiracy that RUSSO corruptly solicited, demanded and

accepted things of value for the benefit of any person from Kleem and the companies in which Kleem had an interest, RUSSO acting with the intent to be influenced and rewarded in connection with a business, transaction and series of transactions of the County valued at $5,000 or more in the years May 31,2006 to May 30, 2007 and May 31,2007 to May 30, 2008, that is, the award and administration of County business, both as requested and as future opportunities arose. The things of value included, among others, cash, entertainment, and business opportunities for BEI3.

100. It was further an object of the conspiracy that Kleem and the companies in which Kleem had an interest corruptly gave, offered and agreed to give RUSSO things of value, acting with the intent to influence and reward RUSSO in connection with the business, transaction and series of transactions described in paragraph 99.

101. It was a further object of the conspiracy that RUSSO and others concealed and attempted to conceal from the public and from law enforcement the corrupt relationship described herein.

OVERT ACTS

102. In furtherance of the conspiracy, and to effect the objects thereof, RUSSO and others committed the following overt acts in the Northern District of Ohio and elsewhere:

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A. In or around Fall 2006, Kleem asked RUSSO to assist him in obtaining a

HUD-funded County grant for the City of Berea to build a pedestrian bridge connecting a nature trail to a pavilion on Coe Lake, to which RUSSO agreed.

B. In or around late 2006 or early 2007, RUSSO used his official position as

County Auditor to participate in efforts to expedite Berea's application for the grant.

C. On or about February 1,2007, the County Commissioners voted to award a

HUD-funded $150,000 grant to the City of Berea for the Coe Lake Nature Trail and Bridge Project.

D. On or about February 22, 2008 at approximately 2: 15 p.m., RUSSO was

part of a group that requested Kleem to assist in making arrangements for a trip to Las Vegas.

E. On or about February 26, 2008 at approximately 3:41 p.m., POI told

RUSSO "[Blaze Construction'S] bid is f--ked up. Did you ever hear of anything like this? He submits a $35 million bid and he only puts a [sic] $30 million bond." POI and RUSSO discussed how the County Prosecutor's Office would have to decide whether to accept or reject Blaze Construction's bid. RUSSO asked POI which company bid lower than Blaze Construction. POI told him and RUSSO replied, "Ohhh, try everything to give it to him [Blaze Construction]." RUSSO then suggested PO I call Kleem and tell him to be "proactive" and explain it was just a "clerical error," POI and RUSSO then discussed the fact that Kleem, through Phoenix Cement, was the low bidder on the concrete portion of the JJC project. POI said, "I don't even know why they do stupid things these guys .... Don't even, I mean why do you subject yourself to the risk of the problem unless he can't get the 35 million bond." Later in the conversation, POI and RUSSO

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discussed other companies that bid for different portions of the JJC project but were not the lowest bidders. PO 1 complained there was not much he could do because he would have to explain to the other County officials why they were not accepting the lowest bid. RUSSO said, "I tell all these guys - go in low and just add a thing or two on as you go along." POI responded, "Yeah." RUSSO said, "But they don't listen." POI replied, "No."

F. On or about March 10,2008 at approximately 3:58 p.m., POI and Kelley

had a conversation in which they discussed the possibility that RUSSO might not go to Las Vegas. Kelley said "Frank [RUSSO] ain't passing up Vegas, especially with Ferris [Kleem] gonna be there. He's [RUSSO's] already got Ferris convinced that he's got him ten jobs lined up." POI

replied, "Yeah."

G. On or about March 26, 2008, Kelley and RUSSO spoke about their

upcoming trip to Las Vegas. RUSSO said, "I can't wait." RUSSO confirmed he was meeting with Kleem before the trip. Kelley and RUSSO then spoke about their hotel rooms in Las Vegas and whether the reservations were "all set." RUSSO said he would speak to Kleem about the rooms and "get it all organized."

H. On or about April 2, 2008, Kleem met with RUSSO at Teamz Restaurant to

discuss the Las Vegas trip. During the meeting, Kleem gave RUSSO an envelope containing $6,000 in cash; $1,000 for his airfare to Las Vegas, and $5,000 for gambling, the latter to insure that RUSSO gambled enough to earn the "cornped" suite at the Mirage that Kleem had reserved.

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1. On or about April 2, 2008 at approximately 4:20 p.m., and after the Teamz

meeting, RUSSO and POI discussed their meeting with Ferris Kleem. POI stated, "He [Kleem] made me sick with ten more f----ing issues." RUSSO replied, "You should have left when I left."

1. On or about April 3, 2008, RUSSO and PE4 had a conversation in which

RUSSO said, "Don't say anything, but we just met with the one guy [Kleem] who's going to be there [in Las Vegas], he's gonna have whores and he's got a tiki hut by the pool, he's got everything." PE4 replied, "I heard. That's a beautiful thing, that's awesome." RUSSO continued, "Monday night we're going to dinner at this great restaurant there." PE4 said, "Yeah, that's awesome." RUSSO added, "It is going to be a nice time." PE4 then confirmed RUSSO received his "package [itinerary]." PE4 told RUSSO it was his (PE4's) decision to put it in an envelope because it was "nobody's business." RUSSO replied, "I paid Kevin [Kelley]. I did not want anybody to say they paid for our tickets. So [PO 1] and I gave him a check today for our tickets because I didn't want no rumors to start that Kevin [Kelley] took us to Vegas or that other guy [Kleem] took us to Vegas. This way we got proof we paid our own tickets and I have no problem then. You know what I mean." PE4 responded, "Absolutely. F-k it. This was what ... you got the check, it's done."

K. On or about April 9, 2008 at approximately 12:10 p.m., POI and RUSSO

discussed RUSSO's Mirage hotel bill. They agreed that they would not contest charges to RUSSO's room, because Kleem had provided cash with which to gamble at levels sufficient to quality for "camped" suites.

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L. On or about April 10, 2008 at approximately 8: 14 p.m., PO 1 and RUSSO

discussed a Plain Dealer reporter who called RUSSO about the Las Vegas trip. RUSSO and POI

agreed it was nobody's business about their personal trip to Las Vegas because the County did not

pay for their trip. RUSSO said, "I am so glad I paid for my ticket." POI replied, "You have to.

They are going to check all that." PO 1 and RUSSO then complained about the reporter wanting

to know who was with them in Las Vegas. POI said, "I'm not going to tell him [the Plain Dealer

reporter] that I saw Ferris Kleem over there [in Las Vegas]. RUSSO replied, "No, no. I would

say I didn't see him. PO 1 responded, "I'll say I saw a bunch of people over there." RUSSO said,

"Whatever you do, don't mention his name [POl]."



COUNT 4

(Conspiracy to Commit Mail Fraud and Honest Services Mail Fraud, 18 U.S.C. §§ 1341 and 1346, in violation of 18 U.S.C. § 1349)

103. Paragraphs 1-3,5, 16-18,27-28,38,42, and 54 of the General Allegations are re-


THE CONSPIRACY

104. From in or around 2006, and continuing through on or about July 18,2008, the


Eastern Division, Defendant FRANK P. RUSSO, and others known and unknown to the United

States Attorney, did knowingly and intentionally combine, conspire, confederate and agree with

23

..

each other to commit an offense against the United States, namely, to knowingly devise and intend to devise a scheme and artifice:

(1) to defraud and deprive Cuyahoga County and its citizens of their right to RUSSO's honest and faithful services, through bribery and kickbacks and the concealment of material information related thereto, and

(2) to defraud Cuyahoga County, certain County property owners, and certain prospective property owners and to obtain money and property by means of materially false and fraudulent pretenses, representations and promises,

and for the purpose of executing such scheme and artifice, to cause matters to be placed in any post office and authorized depository for mail matter to be sent and delivered by the United States Postal Service and private and commercial interstate carrier, in violation of Title 18, United States Code, Sections 1341 and 1346.


105. It was the object of the conspiracy that RUSSO secretly used his position to enrich himself and others, by soliciting and accepting gifts and other things of value from PE40, in exchange for favorable official action, and that PE40 enriched himself by secretly obtaining favorable official action for himself through corrupt means.

24

MANNER AND MEANS It was part of the conspiracy that:

106. RUSSO accepted gifts and other things of value from PE40, including entertainment and sponsoring a political fundraiser for PO 11, and giving a personal economic advantage to RUSSO related to a foreclosed property.

107. RUSSO provided favorable official action for the benefit ofPE40 as requested and as opportunities arose.

108. The conspirators took steps to hide, conceal, and cover up their activity and the nature and scope ofPE40's dealings with RUSSO.

109. Beginning in or around 2006, RUSSO contacted PE24 and inquired about PE40 being hired as an appraiser by the Sheriffs Office.

110. From in or around Summer 2007 through in or around Spring 2008, PE40 gave RUSSO things of value in exchange for RUSSO helping PE40 obtain employment with the Sheriffs Office.

111. Beginning in or around 2007, RUSSO asked PE24 if she could bend the rules for PE40 regarding the appraiser requirements, to which PE24 responded negatively.

112. On or about December 6,2007, PE40 applied for the position of appraiser at the Sheriff's Office.

113. On or about March 3, 2008 at approximately 4:57 p.m., RUSSO told another that PE40 raised $8,200 at the fundraiser for PO 11, which fundraiser PE40 held in exchange for RUSSO helping PE40 obtain employment with the Sheriffs Office.

25

114. On or about March 25, 2008, POI2, POI and RUSSO met at Delsangros's restaurant. During the meeting, POI told POl2 that he wanted the job (for PE40) to be "PERS".

lIS. On or about March 26, 2008, PE40 told RUSSO, "I just want to thank you for yesterday again." RUSSO replied, "Oh, no problem," and explained to PE40 that he believed it would be legal for PE40 to be employed by both RUSSO and the Sheriffs Office. RUSSO told PE40 that he might have to pay his own hospitalization for awhile, but he (PO 12) said PE40 would be able to make a minimum of$50,000. RUSSO stated, "He's [POI2] definitely going to give it to you, [PE40]. It'sjust a matter of what we gotta do with your benefits. But I think you're going to be ok."

116. On or about April 24, 2008, RUSSO and PE40 discussed a thing of value PE40 would provide to RUSSO, in exchange for RUSSO helping PE40 obtain employment with the Sheriffs Office, which had begun on or about April 9,2008.

117. On or about July 16, 2008, PE40 told RUSSO that he just appraised a property and asked ifBE13 planned to move closer to RUSSO. PE40 said that he had appraised a property on Chagrin River Road with 2.5 acres of land. PE40 said a family lived in the house but that it may sell for $180,000 to $190,000, which RUSSO called a "steal, my God that's a f=-ing steal." RUSSO said he would call BEl3 "right now."

118. On or about July 18,2008, RUSSO told PE40 that BE13 and RUSSO had driven by the house on Chagrin River Road and thought it had potential after some renovation. RUSSO decided to wait for the Sheriff s sale on it. RUSSO confirmed the property held two buildings. RUSSO lamented that BEl3 and he could not walk the property because someone lived there.

26

PE40 said that he could tell the owners that he worked for the Sheriffs Office and that he needed

to do another appraisal. PE40 then suggested RUSSO could go there and say that as the County

Auditor, he needed to look at it.

EXECUTION OF THE SCHEME

119. On or about the dates listed below, in the Northern District of Ohio and elsewhere,

RUSSO and others, for the purpose of executing the above-described scheme and artifice, caused

the following documents to be delivered and sent through the United States mails:

Date Description
December 20, 2007 PE40's appraisal license sent from Columbus, Ohio to PE40's
residence in Independence, Ohio.
January 3, 2008 Letter from PE40 to PE24's office in Cleveland, Ohio, enclosing
documents from the State of Ohio concerning his appraisal
license.
March 10,2008 Campaign contribution sent from Bedford Heights, Ohio to
Business 32, in Maple Heights, Ohio. All in violation of Title 18, United States Code, Section 1349.


COUNTS

(Hobbs Act, 18 U.S.C. § 1951)

120. Paragraphs 1,4, 17, 21, 31, and 32 of the General Allegations are re-alleged and


121. Beginning in or about May 20, 2002 and continuing until on or about December

27, 2007, the exact dates being unknown to the United States Attorney, in the Northern District of

27

-"

Ohio, Eastern Division and elsewhere, Defendant FRANK P. RUSSO did knowingly obstruct,

delay and affect and attempt to obstruct, delay and affect commerce and the movement of articles

and commodities in commerce by extortion; that is RUSSO obtained and attempted to obtain

property not due to him or his office, from Kevin F. Payne and Payne's law firm, with their

consent, under color of official right.

It was part of the offense that:

i22. RUSSO solicited and accepted gifts, payments, and other things of value from

Payne, including cash, limousine services, raises for PE3, and reduced payroll expense for the

Auditor's Office, said decisions with respect to PE3 and hiring decisions that caused reduced

payroll expenses for the Auditor's Office based on an agreement between Payne and RUSSO and

not based on PE3's or others' merit.

123. RUSSO provided official favors to Payne as requested and as opportunities arose,

including hiring PE2 and giving PE2 unnecessary and unjustified raises in salary, said decisions

based on an agreement between Payne and RUSSO, and not on PE2's performance.



COUNT 6

(Conspiracy to Commit Mail Fraud and Honest Services Mail Fraud, 18 U.S.C. §§ 1341 and 1346, in violation of 18 U.S.C. § 1349)

124. Paragraphs 1,5, 17, 19,22, and 23 of the General Allegations are re-alleged and


28

_ ..

THE CONSPIRACY

125. From in or around August 2005, and continuing through in or about December 1, 2009, the exact dates being unknown to the United States Attorney, in the Northern District of Ohio, Eastern Division, Defendant FRANK P. RUSSO and others known and unknown to the United States Attorney, did knowingly and intentionally combine, conspire, confederate and agree with each other to commit an offense against the United States, namely, to devise and intend to devise a scheme and artifice:

(1) to defraud and deprive Cuyahoga County and its citizens, and the Auditor's Office of their right to the honest and faithful services of RUSSO, through bribery and kickbacks and the concealment of material information related thereto, and

(2) to defraud Cuyahoga County and the Auditor's Office and to obtain money and property by means of materially false and fraudulent pretenses, representations and promises,



126. It was an object of the conspiracy that RUSSO secretly used his official position to enrich himself, by soliciting and accepting gifts, payments, and other things of value from

29

Gallucci, in exchange for favorable official action, and that Gallucci enriched himself by secretly obtaining favorable official action for himself through corrupt means.

127. It was a further object of the conspiracy that RUSSO deprived and attempted to deprive the County and the Auditor's Office of money and property by making personnel decisions based on things of value provided by Gallucci and not based on merit.

MANNER AND MEANS


128. RUSSO, with another's assistance, solicited and accepted gifts, payments, and other things of value from Gallucci, including cash, Gallucci's sham candidacy for public office, Gallucci's agreement to remain in the election for a certain period, and Gallucci's withdrawal from the election.

129. As a result of Gallucci's agreement to run a sham campaign, RUSSO obtained money and property in the form of retaining his County position, with its salary and benefits, and which also enabled him to obtain money and property from the kickback schemes described in this Information.

130. In exchange, RUSSO provided official action for the benefit of Gallucci as requested and as opportunities arose, including hiring Gallucci in a position that offered OPERS benefits, and RUSSO also provided and arranged to provide Gallucci with financial assistance so Gallucci could maintain his sham candidacy.

131. The conspirators took steps to hide, conceal, and cover up their activity and the nature and scope of Gallucci's dealings with RUSSO.

30

132. On or about November 29, 2006, RUSSO hired Gallucci in the Auditor's Office at a salary of approximately $67,849.86 per year, at that time approximately $3,400 more than the salary of Gallucci's supervisor at the Auditor's Office.

133. In or about December 2006, Gallucci was asked and agreed to contribute cash to be included in a card for RUSSO. Gallucci contributed approximately $250 cash, in part to thank RUSSO for the job.

134. In or about January 2008, the Plain Dealer began investigating patronage in the Auditor's Office. As part of that investigation, the Plain Dealer requested from the Auditor's Office the employment files of certain individuals, including Gallucci. RUSSO asked Joseph O'Malley to help RUSSO respond to the Plain Dealer's requests for information. In particular, RUSSO requested that O'Malley review Gallucci's personnel file.

135. RUSSO discussed with Gallucci questions the media might pose to Gallucci, as RUSSO's former opponent. RUSSO advised Gallucci to tell the media that it was difficult to raise money against RUSSO and that RUSSO was a good guy. RUSSO suggested Gallucci make these same statements to the FBI, if questioned about the campaign.


136. On or about the dates listed below, in the Northern District of Ohio and elsewhere, RUSSO, Kelley, Gallucci and others, for the purpose of executing the above-described scheme and artifice, caused the following documents to be delivered and sent through the United States mails:

31

Date Description
November 29,2006 Documents related to Gallucci's enrollment in OPERS sent
from Cleveland, Ohio to OPERS in Columbus, Ohio. All in violation of Title 18, United States Code, Section 1349.


COUNT 7

(Tampering with a Witness, 18 U.S.C. § ISI2(b)(3))

137. Paragraphs 17,22, and 23 of this Information are re-alleged and incorporated by

reference as if fully set forth herein.

138. From in or around December 2007 through the date of the filing of this

Information, the FBI, IRS, and a federal grand jury in the Northern District of Ohio were

investigating, among other things, whether Joseph Gallucci had provided things of value to

RUSSO, in exchange for RUSSO's promise to perform official acts to benefit Gallucci.

The Obstruction

139. Beginning in or around January 2008 and continuing until on or about July 28,

2008, the exact dates unknown to the United States Attorney, in the Northern District of Ohio,

Eastern Division, Defendant FRANK P. RUSSO did knowingly and corruptly persuade another

person and attempt to do so and engage in misleading conduct toward another person with the

intent to hinder, delay and prevent the communication to a law enforcement officer of the United

States of information relating to the commission and possible commission of a Federal offense.

32

It was part of the obstruction that:

140. On April 29, 2008, RUSSO and Joseph O'Malley discussed newspaper articles about County hiring practices and the newspaper's public record requests for personnel files for all of RUSSO's employees. RUSSO stated, "What I'm gonna do is go in at one and go through each and every one of 'em, and I told somebody to call Joe Gallucci. His is really pathetic, you know what I mean. His [file] has got to be superb." O'Malley replied, "I talked to Joe yesterday. I'm supposed to meet him this afternoon." RUSSO said, "Oh perfect. Just come on over. We can sit him in [PE31's] office, and you could develop his ... you could develop a nice thing for him, I uh, you know." O'Malley said, "Do you really think he'll become an issue or do you .... "

RUSSO interrupted and said, "Urn, I'm afraid he might. That's why I think his personnel jacket's got to suffice his salary in the high 60s, you follow me? In other words, it's gotta make it (inaudible) he's got it. Hejust didn't put it down, you know what I mean." Later in the conversation RUSSO said, "Yeah, like I say I'm gonna get there I'll probably get there hopefully around 12:30, but plan from one to five. I'm gonna be there and meet that yokel there only because I just think his application's gotta shine, you know what I mean."

141. On or about May 7, 2008, RUSSO told another that the Plain Dealer had not yet found out about Gallucci.

142. In or around the Spring of 2008, RUSSO discussed with Gallucci questions the media might pose to Gallucci, as RUSSO's former opponent. RUSSO advised Gallucci to tell the media that he resigned from the race because it was difficult to raise money against RUSSO and

33

that RUSSO was a good guy. RUSSO suggested Gallucci make these same statements to the FBI,

if questioned about the campaign.

All in violation of Title 18, United States Code, Section 1512(b)(3).


COUNT 8

(Mail Fraud, 18 U.S.C. § 1341)

143. Paragraphs 1,5, 17,33, and 44-46 of the General Allegations are re-alleged and


The Scheme

144. From on or about January 1,2002, and continuing through on or about July 28,


Ohio, Eastern Division, Defendant FRANK P: RUSSO, did knowingly and intentionally devise

and intend to devise a scheme and artifice to defraud Cuyahoga County and the Auditor's Office

and to obtain money and property by means of materially false and fraudulent pretenses,

representations and promises, and for the purpose of executing such scheme and artifice, caused

matters to be placed in any post office and authorized depository for mail matter to be sent and

delivered by the United States Postal Service and private and commercial interstate carrier.

It was part of the scheme that:

145. County employees and prospective employees sought jobs in RUSSO's office, in

part, to receive OPERS benefits.

34

..

146. RUSSO secretly used his official position to enrich himself, by soliciting and accepting gifts, payments, and other things of value from County employees, prospective County employees and others acting for the benefit of County employees and prospective County employees, in exchange for RUSSO granting favorable personnel actions, to include (1) hiring, (2) awarding raises, (3) granting transfers, (4) establishing work assignments, and (5) allowing employees to be absent from work without taking leave or suffering adverse employment action.

147. RUSSO deprived the County and the Auditor's Office of money and property by making hiring decisions and awarding raises based on RUSSO receiving something of value, and not based on merit or the County's needs, including the following personnel decisions:

A. In or around 2002, RUSSO offered to reduce Kelley's work hours from 35

hours per week to 30 hours per week and to increase his annual salary from approximately $58,000 to approximately $75,000, in exchange for Kelley withdrawing from the City of Parma, Ohio mayoral race. Kelley withdrew from the race in or around December 2002, and RUSSO thereafter adjusted Kelley's compensation. Kelley's OPERS benefits increased as a result of the salary increase.

B. In or around Fall 2002, Dennis Dooley agreed to give RUSSO, through

another, $10,000 in exchange for employment in the Auditor's Office. Pursuant to this agreement, Dooley paid $5,000 as an "up front" payment for the job. In return, on or about December 30, 2003, RUSSO hired Dooley in the Auditor's Office at a salary of approximately $36,500. On or about November 1,2004, RUSSO reassigned Dooley to the position oflnspector, Weights and Measures. Although paid a salary while assigned to Weights and Measures for a 35-

35

hour work week, Dooley actually worked only about 20 hours per week. Some days he did not report for work at all. While employed at the County, Dooley gave RUSSO cash from time to time in exchange for RUSSO not taking adverse employment action against Dooley for failing to report to work.

C. On or about August 25, 2003, PESO's relative gave RUSSO cash and free

and discounted home improvements, and in exchange RUSSO hired PESO in the Auditor's Office.

D. In or around 2004, PE47 told RUSSO that she wanted to resign from the

Maple Heights Board. RUSSO offered to give PE47 a $5,000 raise at the Auditor's Office and a parking pass in exchange for PE47 remaining on the Maple Heights Board. PE47 agreed to complete her term.

E. From on or about September 12, 2005 through in or around July 2008, PE4

gave RUSSO and his designee things of value, and in exchange, RUSSO hired PE4 in the Auditor's Office at a salary of approximately $39,995.02. RUSSO permitted PE4 to work fewer hours than required, while receiving his full salary and benefits and without requiring PE4 to take leave or to suffer adverse personnel action. On numerous occasions between on or about September 10, 2007 and on or about July 28, 2009, PE4 ran errands during his regularly scheduled work day, such as driving other public officials to events, spending time with friends, attending pool parties, and traveling on gambling trips. On average, he worked only approximately ten hours per week on Auditor's Office business.

36

F. On or about October 3,2005, PE49's relative gave RUSSO approximately

$2,000, and in exchange, RUSSO hired PE49 in the Auditor's Office. PE49's position came with

OPERS benefits.

EXECUTION OF THE SCHEME'

148. On or about the date listed below, in the Northern District of Ohio and elsewhere,


documents to be delivered and sent through the United States mails, and interstate private and

commercial carrier, including the following:

Date Description
November 29,2007 Documents related to PE49's enrollment in OPERS, sent from
Cleveland, Ohio to OPERS in Columbus, Ohio. All in violation of Title 18, United States Code, Section 1341.


COUNT 9


149. Paragraphs 1,4,8,9, 17, 18,50, and 56 of the General Allegations are re-alleged


THE CONSPIRACY

150. Beginning in or around January 2004 and continuing until on or about May 5,




37

combine, conspire, confederate and agree with each other to obstruct, delay and affect commerce and the movement of articles and commodities in commerce by extortion; that is, RUSSO obtained property not due to him or his office, namely free or discounted home improvements and materials, from Salva Stone, Mont Granite, Bafna and Valentin, with their consent, under color of official right.


151. It was the object of the conspiracy that RUSSO obtained things of value, including free and discounted home improvements and materials, from Bafna, Valentin, Salva Stone and Mont Granite in return for RUSSO using his County position to benefit MGRP, Valentin and Bafna, both as requested and as future opportunities arose.

MANNER AND MEANS


152. RUSSO used his official position to help Valentin's relative and Valentin's friend obtain County employment and used his official position to help MGRP and Bafna with property valuation complaints pending in the County in 2006 and in 2007.

153. RUSSO hired Valentin's friend on or about May 1,2006, and RUSSO hired Valentin's relative on or about December 11,2006.

154. In return, RUSSO solicited and obtained free and discounted home improvements and materials from Valentin, Bafna, Salva Stone and Mont Granite.

All in violation of 18 U.S.C. § 1951.

38

..


COUNT 10

(Charging Conspiracy to Commit Mail Fraud and Honest Services Mail Fraud, 18 U.S.C. §§ 1341 and 1346, in violation of 18 U.S.C. § 1349)

155. Paragraphs 1-3, 5, 17-18, 23, 29, 40-41, and 48 of the General Allegations are re-


INTRODUCTION

156. On or about April 20, 2007, P016 was appointed as judge to the Common Pleas

Court.

157. In or around 2007, P016 announced his candidacy to retain his seat on the

Common Pleas Court, and sought and obtained RUSSO's support in the November 2008 election

(hereinafter PO 16' s 2008 campaign).

158. On or about November 4,2008, P016 was elected as judge to the Common Pleas

Court.

159. Upon his appointment, P016 inherited numerous cases, including K&L

Excavation, Ltd. v. Auburn Building Company, et al., Case No. CV -03-515172 and Avon Poured

Wall, Inc. v. Brian Lane, et al., Case No. CV-04-519620, related cases which involved a

multiparty civil foreclosure action concerning a house that Litigant 1 had been constructing

(hereinafter collectively the American Home Bank Case). As part of the litigation, American

Home Bank ("AHB") sought $190,000 in damages from Litigant 1.

160. In the American Home Bank Case, attorney Joseph O'Malley represented Litigant

1 and Attorney 4 represented AHB.

39

.. ....

161. On or about November 27,2006, Litigant 1 filed a motion for summary judgment, arguing that there existed no material issues of fact in dispute and that Litigant 1 was entitled to judgment as a matter of law.

162. On or about March 28, 2008, AHB filed a motion for summary judgment, arguing that there existed no material issues of fact in dispute and that it was entitled to judgment as a matter of law.

163. At all times material herein, judges ofthe County Common Pleas Court were governed by the Ohio Code of Judicial Conduct.

THE CONSPIRACY

164. From on or about February 23,2007, and continuing through on or about November 17,2008, the exact dates being unknown to the United States Attorney, in the Northern District of Ohio, Eastern Division, Defendant FRANK P. RUSSO and others known and unknown to the United States Attorney, did knowingly and intentionally combine, conspire, confederate and agree with each other to commit an offense against the United States, namely, to devise and intend to devise a scheme and artifice:

(la) to defraud and deprive the Common Pleas Court and certain litigants, including AHB, of their right to the honest and faithful services ofP016 and RUSSO, through bribery and kickbacks and the concealment of material information related thereto, and

(lb) to defraud and deprive the Auditor's Office, Cuyahoga County and its citizens, of their right to the honest and faithful services ofP016 and RUSSO, through bribery and kickbacks and the concealment of material information related thereto, and

40

(2a) to defraud Common Pleas Court and certain litigants, including AHB, and to obtain money and property by means of materially false and fraudulent pretenses, representations and promises,

(2b) to defraud the Auditor's Office and Cuyahoga County, and to obtain money and property by means of materially false and fraudulent pretenses, representations and

promises,



165. It was an object of the conspiracy that P016 secretly used his official position to enrich himself, by soliciting and accepting gifts, payments, and other things of value from RUSSO, in exchange for favorable official action, and that RUSSO enriched himself and his designees by secretly obtaining favorable official action for himself through corrupt means.

166. It was a further object of the conspiracy that PO 16, with the assistance of RUSSO, deprived the citizens of Cuyahoga County of money and property by using County resources to benefit P016's campaign.

167. It was a further object of the conspiracy that POI6, with the participation of RUSSO, deprived and attempted to deprive AHB of money and property by giving O'Malley's clients a secret advantage in the litigation, and by failing to disclose that secret advantage to AHB.

41

MANNER AND MEANS


168. PO 16 accepted things of value, including financial support for PO 16's political

campaign.

169. In exchange, PO 16 provided favorable official action for the benefit of RUSSO

and his designee as requested and as opportunities arose, including hiring and promising to hire certain employees, engaging Russo in ex parte communications about pending cases, and allowing those ex parte communications to influence his judicial decision making.

170. The conspirators took steps to hide, conceal, and cover up their activity and the nature and scope of RUSSO's dealings with P016.

171. On or about April 30, 2007, P016 hired PE55 as a member ofP016's court staff, where he remained employed until on or about August 28, 2007. As part of PE55's employment with POI6, PE55 received OPERS benefits.

172. After P016's appointment, RUSSO used Auditor's Office resources to assist in POI6's 2008 campaign.

173. RUSSO, in consultation with P016, made personnel decisions in the Auditor's Office to facilitate PO 16 having staff at the Common Pleas Court willing to work on PO 16'5 political campaign.

174. PO 16 concealed from certain litigants the nature of the ex parte communications with RUSSO and the effect of said communications on P016's rulings.

42

175. On or about April 25, 2008, RUSSO received a call from PE31. RUSSO told

PE31 that PO 16 had called him a couple of times and "wants to get somebody [to serve as a bailift]." RUSSO said that he stayed up the previous night and highlighted about 20 names. RUSSO and PE31 discussed the names. PE31 thought one employee would take the bailiff job, but PE31 stated he was not sure if [the employee] "is what [P016] would be looking for as far as going out and campaigning and s--t." RUSSO stated, "See, I'd like somebody a little more political." RUSSO and PE3 I discussed another individual for the bailiff job and agreed that individual would be "good for the election." RUSSO also stated that "PE55 was going to take that job back in January."

176. On or about May 2, 2008, PO 16 asked RUSSO if one of RUSSO's employees could help P016 "get my parade s--t together." RUSSO responded that the employee was in the room with him and that PO 16 was welcome to use her.

177. On or about July 15,2008, O'Malley was trying to settle the American Home Bank Case. O'Malley's efforts to settle the case were hindered by the fact that P016 had not ruled on the pending motions for summary judgment.

178. On or about July 15, 2008, O'Malley was meeting with RUSSO in RUSSO's office when a member of RUSSO's staff told RUSSO that P016 had arrived to see him. O'Malley told RUSSO that he needed PO 16 to review the motions for summary judgment on his case and that O'Malley could not settle the case until the motions for summary judgment were resolved.

179. On or about July 17,2008, P016 told RUSSO, "PE32 called and said you wanted me to call you." RUSSO replied, "Yeah, I just wanted to let you know. Did [a County employee] give you the case numbers?" P016 said, "Yes." RUSSO then stated, "Okay, in other words, I

43

talked to you about this once before, was deny, it's about denying the motions for summary judgment." P016 replied, "Yep, I still have the note that you gave me." RUSSO repeated, "Okay, good, so deny the motions for summary judgment, okay, good." P016 replied, "Got it." RUSSO replied, "Alright, good. No, that was all. Ijust wanted to touch base with you on that, and that's it." At the end of the conversation, RUSSO asked P016 to inform him of the dates and times of PO 16's political fundraisers so RUSSO could attend them.

180. On or about July 18, 2008 at approximately 10:31 a.m., RUSSO called PO 16, who stated, "This is so ironic that you are calling me because I called you just to tell you that I took care of those two issues with those two cases that we talked about." RUSSO replied, "Okay." P016 stated, "I just did it this morning right?" RUSSO replied, "Okay." P016 stated, "Denied everything. And then who's over in my courtroom right now. But Joe O'Malley." RUSSO stated, "So he's over ... alright." P016 stated, "Yeah, so everyone's, we're all on the same page." RUSSO replied, "Very good, very good. Tell him I said hi."

181. On or about July 18, 2008 at approximately 10:44 a.m., RUSSO received a call from Joe O'Malley, who stated, "You took care of that, he [P016] just told me." RUSSO replied, "Yeah, yeah, so it worked out good." O'Malley then stated, "That's huge. I should be able to settle that thing. It's a nightmare." RUSSO replied, "Alright, good."

182. On or about October 7, 2008, AHB and Litigant 1 settled the case for a judgment in favor of AHB against Litigant 1 in the amount of approximately $27,000, PO 16 having failed to disclose the ex parte communication between P016 and RUSSO.

44


183. On or about the dates listed below, in the Northern District of Ohio and elsewhere,


documents to be delivered and sent through the United States mails, and interstate private and

commercial carrier, including the following:

Date Description
April 30, 2007 Documents related to PE55's enrollment in OPERS, sent from Cleveland,
Ohio to OPERS in Columbus, Ohio.
July 18,2008 Notice ofP016'sjudgment entry denying AHB's motion for summary
judgment in the American Home Bank Case, sent from the Common
Pleas Court in Cleveland, Ohio to Attorney 4 in Cincinnati, Ohio. All in violation of Title 18, United States Code, Section 1349.


COUNT 11

(Hobbs Act, 18 U.S.C. §§ 1951 and 2)

184. Paragraphs 1-4, 17-18,23,25,37, and 43 of the General Allegations are re-alleged


185. From in or around 2003 through in or around July 2008, the exact dates being

unknown to the United States Attorney, in the Northern District of Ohio, Eastern Division and

elsewhere, P04 (not charged herein), aided and abetted by Defendant FRANK P. RUSSO, did

knowingly obstruct, delay and affect and attempt to obstruct, delay and affect commerce and the

movement of articles and commodities in commerce by extortion; that is P04 obtained and

attempted to obtain property not due to her or her office, that is, financial support and the promise

45

of future financial support from RUSSO's campaign and the Auditor's Office, with RUSSO's consent, under color of official right.

It was part of the scheme that:

186. From in or around 2003 through in or around July 2008, RUSSO caused his campaign and the Auditor's Office to provide property to P04's political campaign.

187. On or about May 21, 2008, P04 continued a criminal trial pending before her Court, United States v. Scott, Case No. CR-08-S10073, in which Joseph O'Malley represented the defendant, for one week, to allow O'Malley to assist RUSSO prepare for an anticipated newspaper article critical of RUSSO's hiring practices.

188. In or around June 2008, RUSSO called PE20 and asked ifP04 could help one of the litigants in Debaltzo v. Consolo, Case No. CV-08-657958 (hereinafter "Debaltzo case"), by speeding up the litigation. PE43 was a litigant in the Debaltzo case.

189. On or about July 14,2008, RUSSO learned that PE43 wanted to speak to RUSSO when RUSSO came to the office.

190. On or about July 15, 2008, RUSSO told PE20 that a pretrial was scheduled in the Debaltzo case, and he asked that P04 assist in settling the case.

191. On or about July 15, 2008, RUSSO and P04 discussed the Debaltzo Case. P04 explained that she had scheduled a settlement conference for the following day, but that because of a recent bankruptcy filing, she could not proceed with the settlement conference. P04 explained that with the bankruptcy stay, her hands were tied. P04 stated that her staff attorney would bring the case file to her house that evening so she could take notes and make sure "everybody got the attention they deserved," because people sometimes file bankruptcy to play

46

games. RUSSO stated, "I understand very thoroughly." P04 stated, "But as soon as it gets

reinstated, I'll make sure that I set it for a hearing, might get some personal attention." RUSSO

replied, "Okay, great. You are one in a million." P04 replied, "I have my eye on the file for you.

I just wanted to make sure you knew."

All in violation of Title 18, United States Code, Sections 1951 and 2.


COUNT 12

(Hobbs Act, 18 U .S.C. § 1951)

192. Paragraphs 1,4, 17,35,39 and 60 of the General Allegations are re-alleged and


193. Beginning in or around 2001 and continuing until on or about August 3, 2009, the


Eastern Division and elsewhere, Defendant FRANK P. RUSSO, did knowingly obstruct, delay

and affect and attempt to obstruct, delay and affect commerce and the movement of articles and

commodities in commerce by extortion; that is RUSSO obtained property not due to him or his

office, namely a $25,000 loan and free and discounted home improvements and materials, from

BE30, with his consent, under color of official right.

It was part of the offense that:

194. RUSSO solicited and obtained things of value, including a loan and free and

discounted home improvements and materials in 2007, from BE30, in return for RUSSO using his

County position to give a relative ofBE30, PE25, raises on or about July 4,2005, on or about

April 16,2007, and on or about February 25,2008.

47

195. On or about March 29,2008, BE30 asked RUSSO, "Did you take care of PE25,

did you take care of that?" RUSSO replied, "Yeah, he should have already gotten it, did he say he

did?" BE30 replied "I haven't spoke [sic] to him but he said something." RUSSO replied,

"Yeah, let me check with [UI], no here's what we did, we have him twelve fifty now, and twelve

fifty in a few months we're gonna give him, but I had PE7 tell him that. Let me make a note right

now." RUSSO continued, "I'm positive I took care ofthat." BE30 said, "Alright. Just make sure

then you didn't forget in two months either." RUSSO immediately responded, mispronouncing

PE25's name. BE30 corrected RUSSO, "PE25, PE25." He then directed RUSSO to give PE7 a

note saying, "In two months, add the other." RUSSO read to BE30 the note he was writing for

PE7.

196. On or about April 28, 2008, RUSSO told BE30 that he had not seen him in awhile.

RUSSO told BE30 that he was finishing his bathroom and that he needed shingles to finish the

roof. RUSSO put a contractor working at RUSSO's house on the phone to speak to BE30. The

contractor told BE30 that he constructed an outdoor bathroom for RUSSO. The roof was water

tight, and RUSSO wanted BE30 to hang 120 square feet of shingles on the bath house. BE30 said

that he would stop by the house later that day to inspect it.



COUNT 13

(Tampering with a Witness, 18 U.S.C. §§ 1512(b)(I)(2) & (3))

197. Paragraphs 17 and 60 of the General Allegations are re-alleged and incorporated

by reference as if fully set forth herein.

48

INTRODUCTION

198. On or about January 6, 2009, BE30 was served with a federal grand jury subpoena for "records relating to any financial transactions between yourself ... and Frank Russo and/or PES5 from January 1,2001 through present. This information should include, but is not limited to ... (4) any loan documents."

199. On or about January 29, 2009, Special Agents ofthe IRS, Criminal Investigation Division, interviewed BE30 in connection with a federal grand jury investigation.

200. Through media coverage of court proceedings, RUSSO learned on or about July 1, 2009 that defendants had pleaded guilty to the conduct related to Counts 2, 3, 5 and 8 of this Information.

201. On or about July 29, 2009, RUSSO became aware that the Government knew about the criminal conduct charged in Count 1 of this Information.

The Obstruction

202. From in or around April 2009 through on or about August 3, 2009, the exact dates being unknown to the United States Attorney, in the Northern District of Ohio, Eastern Division, Defendant FRANK P. RUSSO did knowingly and corruptly persuade another person and attempt to do so with the intent to (1) influence, delay and prevent the testimony of any person in an official proceeding; (2) cause and induce any person to withhold testimony from an official proceeding; and (3) hinder, delay and prevent the communication to a law enforcement officer of the United States of information relating to the commission and possible commission of a Federal offense.

It was part of the obstruction that:

49

203. On or about August 3, 2009, RUSSO met with BE30 at the Lourdes Shrine. When

BE30 asked how things were going, RUSSO responded that things were fine until approximately

one week before. RUSSO explained that Klimkowski was claiming that Russo had received

money from a contract. RUSSO told BE30 that RUSSO was making a list of the donations that

RUSSO received following the death of his son approximately 15 years previously. In an attempt

to induce BE30 to falsely state to investigating agents that RUSSO had legitimate access to large

amounts of cash, RUSSO told BE30 that he put on the list that BE30 gave RUSSO a $10,000

donation. BE30 had not given RUSSO a $10,000 donation.

All in violation of Title 18, United States Code, Sections 1512(b)( 1 )(2) & (3).


COUNT 14


204. Paragraphs 1,4, 13, 17,20,58 and 61 of the General Allegations are re-alleged and


THE CONSPIRACY

205. Beginning on or about April 3, 2006 and continuing until in or around April 2007,

the exact dates being unknown to the United States Attorney, in the Northern District of Ohio,

Eastern Division and elsewhere, Defendant FRANK P. RUSSO and other individual persons

known and unknown to the United States Attorney, did knowingly and intentionally combine,

conspire, confederate and agree with each other to obstruct, delay and affect commerce and the

movement of articles and commodities in commerce by extortion; that is, RUSSO and

Klimkowski obtained property not due to them or their offices, from others, with their consent,

under color of official right.

50


206. It was the object of the conspiracy that RUSSO and Klimkowski used their County positions to perform official acts and promise to perform official acts, in return for cash. The official acts included exerting influence over property valuations for property tax calculations.

MANNER AND MEANS


207. On or about April 3, 2006, a deed was filed related to BE32 purchasing Indian Hills Senior Community ("Indian Hills") for approximately $30 million. Attorney 1 represented BE32 in the purchase.

208. On or about April 8,2006, Business 36 issued a $50,000 check to Allstate Realty.

RUSSO caused the check to be deposited into the Allstate Realty account, which RUSSO controlled, on or about April 10, 2006. RUSSO knew that Attorney 1 selected Allstate Realty as the broker in the transaction because of RUSSO's position as County Auditor. By virtue of RUSSO's position as County Auditor, RUSSO would be in a position to give official favors to Attorney 1 and BE32.

209. In or around 2006, at RUSSO's direction, Klimkowski met with Attorney 1 and BE32 to discuss the Indian Hills property and to arrange for an appraisal.

210. After the appraisal was completed, RUSSO indicated to Klimkowski he wanted to personally review the changes to the Indian Hills valuation and have final say on the new value of Indian Hills.

211. The Indian Hills property was reassessed at approximately $24 million.

51

212. RUSSO instructed Klimkowski to meet with Attorney 1 after the appraisal and

explain the changes made to the Indian Hills property value.



COUNT 15

(Conspiracy to Commit Bribery Concerning Programs Receiving Federal Funds, 18 U.S.C. § 371)

213. Paragraphs 1, 12, 17,30, and 47 of the General Allegations are re-alleged and


THE CONSPIRACY

214. Beginning in or about June 2005 and continuing until on or about May 1,2007, the


Eastern Division and elsewhere, Defendant FRANK P. RUSSO, and others known and unknown

to the United States Attorney, did knowingly and intentionally conspire, combine, confederate and

agree to commit an offense against the United States; that is, bribery concerning programs

receiving federal funds, in violation of Title 18, United States Code, Sections 666(a)(I)(B) and

(a)(2).


215. It was an object of the conspiracy that RUSSO corruptly solicited and accepted for

the benefit of any person things of value from PE53 and Business 34, RUSSO acting with the

intent that he be influenced and rewarded in connection with a business, transaction and series of

transactions of the County valued at $5,000 or more in each of the years June 1,2005 to May 31,

2006, and June 1, 2006 to May 31, 2007.

52

216. It was a further object of the conspiracy that PE53 and Business 34, corruptly gave,

offered and agreed to give to RUSSO things of value, PE53 and Business 34 acting corruptly with

the intent to influence and reward RUSSO in connection with the business, transaction and series

of transactions alleged in paragraph 215.

MANNER AND MEANS


2] 7. RUSSO used his official position to grant County business to Business 34, at a cost

of approximately $448,018.33, and in exchange, PE53 gave financial contributions to RUSSO's

political campaign.

218. RUSSO hired PE53's relatives in the Auditor's Office and made personnel

decisions to benefit PE531s relatives during their employ.

OVERT ACT

219. In furtherance of the conspiracy, and to effect the objects thereof, RUSSO and

others committed the following overt act in the Northern District of Ohio and elsewhere:

A. On or about May 5, 2006, RUSSO caused to be paid, an invoice from

Business 34 to the Auditor's Office for approximately $10,786.40.



COUNT 16


220. Paragraphs 1,4,11, 14-18,26,53-54, and 62-63 of the General Allegations are re-


53

THE CONSPIRACY

221. Beginning on or about January 1,2004 and continuing until on or about July 28, 2008, the exact dates being unknown to the United States Attorney, in the Northern District of Ohio, Eastern Division and elsewhere, Defendant FRANK P. RUSSO, and other individual persons known and unknown to the United States Attorney, did knowingly and intentionally combine, conspire, confederate and agree with each other to obstruct, delay and affect commerce and the movement of articles and commodities in commerce by extortion; that is RUSSO obtained property not due to him or his office, namely consulting fees for BE 13 and Business 30, from Business 30's clients, with their consent, under color of official right.


222. It was the object of the conspiracy that RUSSO solicited and obtained consulting payments to BEl3 and Business 30, from Business 30's clients, in return for RUSSO using his County position to benefit said clients, both as requested and as future opportunities arose.

MANNER AND MEANS


223. On or about January 1, 2004, when BEl3 formed Business 30, RUSSO began directing Auditor's Office employees to assist Business 30 and its clients during the County work day by, among other things, (1) sending County documents to Business 30, (2) providing Business 30 with contact information, and (3) scheduling meetings with other County officials.

224. During the conspiracy, RUSSO used his position as County Auditor to benefit Business 30 by including, among other things, (1) reducing property valuations for certain

54

property owners, (2) giving County jobs and raises to relatives and friends of Business 30's clients, and (3) helping BE13 navigate the County bureaucracy.

225. Business 22 was a client of Business 30.

226. In the Spring of2006, RUSSO urged Kleem to enroll his employees in Business 22. Two of Kleem's companies enrolled its employees in Business 22. In the Spring of 2008, RUSSO urged Kleem to maintain his two companies' enrollment with Business 22 and also urged Kleem to persuade P07 to switch his employees to Business 22. RUSSO indicated that Kleem owed it to him because RUSSO had backed P07 in a political campaign.

227. On or about April l , 2008, RUSSO spoke with BEl3 about his upcoming lunch with Kleem and POI. BE13 asked RUSSO to make sure "we keep the MCOs at his [Kleem's] personal companies and [P07] in Berea is what we are really looking for." RUSSO confirmed, "We want to keep his [Kleem's] MCOs and we want to get ... what is the kid's name out there, [P07]?" BE13 gave RUSSO the name and indicated he had met with P07 already but "I think [P07] may need a push from you know who." RUSSO said, "We got to get that one out there, you know what I mean."

228. On or about April 2, 2008 at approximately 1 :50 p.m., during the lunch described above, RUSSO received a call from BEl3. RUSSO told BE13 that POI and he were still at lunch with Kleem. BE13 asked RUSSO, "Will you true up with that stuff! talked to you about with his companies and that other thing." RUSSO replied, "Absolutely." BEl3 told RUSSO that he was "heading to that office and they are going to be drilling me." RUSSO said, "Tell them [POI] and I are still at lunch with him now and we are going to try to keep those, plus get more plus ... [P07] will definitely take care of us." RUSSO said, "[PO I] took care of us, they [Kleem and

55

P07] got no choice." RUSSO said to POI in the background, "[POI], remind me before we leave about something over here with the city." POI replied, "Berea city." RUSSO confirmed that BEl3 had already talked to P07 once. BE13 responded that he already talked to P07 and was supposed to get back to [P07] by May 1 st, but "you know ... little bit a little little little message that's all." RUSSO responded, "Okay."

229. On or about April 2, 2008 at approximately 3:00 p.m., RUSSO left the following voice mail message for BE13: "[I]t's about ten to three. My luncheon is over. Everything worked out good. He [Ferris Kleem] said he was going to talk to [P07]. And his accounts are still stable so everything's fine. I'll call ya on the cell."

230. On or about April 16, 2008, RUSSO discussed with BE34 lowering a property valuation in return for Business 39 making a business decision for the benefit ofBE13. BE34 told RUSSO that BE36 was having a "boat load of trouble" with the Board of Revision and that PO 1 suggested calling RUSSO about it. RUSSO asked, "Will that help if I get that all resolved?" BE34 replied, "It gives me a bargaining chip I didn't have." RUSSO added, "I will resolve the whole thing." BE34 told RUSSO he would be meeting with Business 39 the following week and wanted to "sandwich the topics together." RUSSO said, "My motto is everybody helps everybody

out."

231. On April 22, 2008, BE34 told RUSSO that the only other property BE36 owned was in Berea on Depot Street. BE34 offered to fax the property information to RUSSO. RUSSO . agreed and added, "Exactly. The other one [ got grips on, pretty good grips on it. The other one is very, very, very complicated, but I got grips on that one and I think we're going to work it out where he'll be tickled pink with it. And then, uh, we'll have this thing, uh, we'll have this thing

56

"". • _;r

all ... let me have the other one and we'll research that. But the other one we're doing really good

for you, okay. We're gonna ... we got grips on that and he's going to have a smile on his face for

that one. And also we'll take the other property and review that okay."

232. RUSSO also assisted Business 40, another Business 30 client. Specifically on or

about March 26, 2008, RUSSO and BEl3 discussed a strategy for Business 40 to obtain the

interior construction manager contract for the JJC project. RUSSO told BE 13 that RUSSO had

spoken to another County official, who could help Business 40 in this effort.



COUNTS 17-21

(Making and Subscribing False Tax Returns, 26 U.S.C. § 7206(1))

233. On or about the dates stated below, in the Northern District of Ohio, Eastern

Division, Defendant FRANK P. RUSSO, a resident of the Ohio cities listed below, who was

single, did willfully make and subscribe U.S. Individual Income Tax Returns, Form 1040, for the

calendar years stated below, on behalf of himself, each of which was verified by a written

declaration that it was made under the penalties of perjury and was filed with the Internal Revenue

Service, and each of which Defendant did not believe to be true and correct as to every material

matter in that, as he then and there well knew and believed, each said return understated his total

income (on line 22) by failing to report income Defendant had that year from bribes and kickbacks

he received, as a result of which each return understated the amount of taxes owing for that year,

in substantial amounts:

57

Count Year Residence Date
17 2004 Richmond Heights 04115/2005
18 2005 Highland Heights 04/15/2006
19 2006 Highland Heights 04/15/2007
20 2007 Mayfield Village 04/15/2008
21 2008 Mayfield Village 04/1512009 In violation of Title 26, Section 7206(1), United States Code.

Eric H. Holder, Jr.

Attorney General of the United States

Barbara L. McQuade

United .States Attorney Eastern District of Michigan

By:

Bernard A. Smith

Assistant United States Attorney

58

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