State reviews status of trucking company after corruption indictment

Published: Sunday, November 17, 2019 @ 6:00 AM

Dayton City Manager Shelley Dickstein talks about city response to indictments

Green Star Trucking, one of two companies at the center of a newly announced public corruption indictment, was hired as a subcontractor by multiple companies over the years based upon state and federal certifications designed to give disadvantaged small businesses a leg up.

Now the state is reviewing Green Star’s status in those programs, which allowed the company to participate most recently as a subcontractor in this year’s repaving of U.S. 40 in Montgomery County and demolition on city land for new town homes in Springfield.

The Dayton Daily News has been examining allegations of public corruption since the first round of indictments was revealed in April. This story digs into what public work Green Star has done.

Content Continues Below

Our investigation found:

• Steve Rauch, a prominent local businessman who’s also been indicted as part of the investigation, used Green Star Trucking to meet minority contracting goals for nearly $4.4 million in city of Dayton demolition contracts between 2008 and 2013.

• A competitor accused Rauch of winning a $1.7 million bid for the Tech Town II project by claiming he would use Green Star as a minority subcontractor — and instead doing the work himself.

• It’s unclear how many trucks Green Star owns, with city documents listing varying numbers.

• The city of Dayton expects to make changes in its minority contracting programs once it receives the results of an independent investigation.

“Clearly the indictment activity revealed some issues that have to be addressed,” City Manager Shelley Dickstein said.

Steve Rauch Inc. subcontracted with Green Star Trucking for demolition and site preparation for Charles Simms townhome development in downtown Springfield earlier this year. The city awarded the $340,642 contract to Rauch in March. BILL LACKEY/STAFF(Staff Writer)

The state hasn’t received any questions related to Green Star’s work but has begun a formal review after the indictment, said Melissa Vince, spokeswoman for the Ohio Department of Administrative Services, which oversees certification of the Minority Business Enterprise and the Encouraging Diversity, Growth and Equity (EDGE), both small business participation programs that Green Star is certified for.

The review could result in Green Star losing its certifications.

“The goal is to determine if a business is responsible for the work, if they performed, managed and supervised the work,” Vince said.

Secret indictment

Green Star Trucking is owned by Joyce Sutton Cameron, 71, of Trotwood, who was that city’s mayor from 2010 to 2016. The company operates out of the Trotwood house she shares with her husband and Green Star employee, James Cameron, 80.

On Oct. 29 federal officials announced that on May 28 a federal grand jury had secretly indicted the Camerons and Rauch, 64, of Germantown, who owns several demolition, excavation, trucking and landfill companies.

Former Trotwood Mayor Joyce Sutton Cameron. PHOTO COURTESY OF THE CITY OF TROTWOOD.(Staff Writer)

Rauch and the Camerons were each indicted on one count of conspiracy to commit mail fraud and six counts of mail fraud, each carrying a possible prison sentence of up to 20 years. Rauch has pleaded not guilty.

The Camerons have not entered a plea but could make their initial appearance in court in early December, said Brent Tabacchi, assistant U.S. attorney.

Rauch’s attorney and the Camerons did not respond to requests for comment.

The indictment of the Camerons and Rauch are part of the same long-term investigation of public corruption in the Dayton region revealed in April when then-Interim U.S. Attorney Benjamin C. Glassman announced the indictment of four men, including a Dayton city employee and a former Dayton city commissioner.

RELATED: Ex-Dayton commissioner, state lawmaker arrested; more arrests coming, feds say

The latest indictment alleges Rauch, along with the Camerons, fraudulently sought and obtained “hundreds of thousands of dollars in demolition contracts,” including from the city of Dayton between 2012 and 2014.

Rauch won government contracts by subcontracting with Green Star to haul debris from demolition sites, allowing his bids to meet minority participation goals, Glassman said.

In this photo from 2012, James Cameron, then a subcontractor for Steve Rauch, Inc., surveys the soon-to-be demolished Jefferson High School building for salvage. A Demolition Day Ceremony is scheduled for Saturday September 1st, 2012. Opening ceremonies will begin at 9:00am with a final walkthrough of the site. Staff photo by Jim Witmer(Staff Writer)

Glassman alleged Rauch used Joyce Sutton Cameron “as his straw or his front.” Rauch and his company completed “all or a substantial portion” of the work Green Star was supposed to do, according to the indictment. Rauch and the Camerons are accused of producing false documentation to make it appear Green Star did the work.

READ: Indictment lays out allegations against Rauch and Camerons

Instead of paying what Green Star was supposed to be paid under Rauch’s government contract, Rauch allegedly paid the Cameron’s “a fee — usually consisting of either several thousand dollars or credits against debts,” according to the indictment.

Glassman would not specify how much total money allegedly was involved, nor would he say what other government entities might have awarded contracts to Rauch.

Rauch was tried in October on separate state charges in Montgomery County Common Pleas Court. Accused of illegal dumping on multiple properties, Rauch and his trucking company were acquitted, but another of his businesses, SRI Inc., was convicted of illegal open dumping of solid waste and violating construction and demolition debris rules. Sentencing is scheduled for Monday, Nov. 18.

Disputed bid

The city of Dayton does not keep a comprehensive list of contractors, their subcontractors or total amounts paid for demolition work.

But a review of city commission documents show Rauch used Green Star Trucking to meet minority contracting goals for nearly $4.4 million in city demolition contracts between 2008 and 2013. That includes demolishing residential and commercial structures, a hotel at the Dayton International Airport, and the Tech Town Phase II project that cleared away the former General Motors Harrison Radiator plant on Monument Avenue in downtown Dayton.

Businessman Steve Rauch, 64, of Germantown, whose indictment on seven federal counts was announced in October 2019. DAN PASCIAK/STAFF(Staff Writer)

One of Rauch’s competitors, Phil Jergens, president and co-owner of Charles F. Jergens Construction Co., said he has long suspected that Green Star did not actually do the trucking work for Rauch at Tech Town. Jergens had done Tech Town Phase I but was outbid by Steve R. Rauch Inc., which won the $1.7 million bid for the Tech Town II in 2008.

“All the time all you saw was Rauch trucks. You never even saw James Cameron there,” said Jergens, who unsuccessfully appealed the bid award.

Dickstein said she doesn’t recall any complaints about Green Star not performing the work on Tech Town. Records about subcontractor compliance from a 2008 project would no longer exist, said Erica Fields, executive director of the city’s Human Relations Council that oversees the disadvantaged business programs.

Jergens said a contractor who does the work that a subcontractor is supposed to be doing can do a job for less money if they don’t have to pay the subcontractor, and therefore can beat out companies that follow the rules.

“It puts the honest contractor at a disadvantage,” Jergens said.

Green Star certified in multiple set-aside programs

Green Star has been certified as an MBE and EDGE company since 2005, and is also certified by the city of Dayton as a women business enterprise and a Dayton local small business enterprise. All expire in 2021.

The company is also certified in the U.S. Department of Housing and Urban Development’s Section 3 program.

Those certifications give Green Star preference on local, state and federal projects and help contractors like Rauch win government contracts that require disadvantaged business participation.

The Human Relations Council sets the goals for minority and other disadvantaged small businesses to get portions of certain public contracts. It also monitors compliance with those goals, as well as compliance with the rules by certified companies and the contractors who use them.

City departments review the bids, Dickstein said, and city commissioners award the contracts based on the lowest, best and most responsive proposal.

RELATED: City investigating after corruption charges allege contracting fraud in Dayton

Compliance

Among the things the city looks for in monitoring a certified company’s compliance is evidence that the owners are actually operating the company, Fields said, including that they own the equipment needed to do the work. A trucking company must own at least one truck to be certified. If the job requires additional trucks, the company needs to get them from another certified disadvantaged business, Fields said.

When Green Star was re-certified in June 2018, Fields said HRC staff photographed Green Star trucks where they were stored. She did not provide a tally of vehicles found or where they were stored.

The Dayton Daily News investigation found that Green Star has won work as a subcontractor on at least 34 public contracts since 2008. Joyce Sutton Cameron has told the city Green Star owned anywhere from two to six trucks, numbers that fluctuated from year to year.

Green Star had five trucks and trailers in 2008, Joyce Sutton Cameron said on city documents. But as Rauch sought the Tech Town II project, his company controller, Daniel E. Feucht, told the city Green Star had nine to 12 trucks “under their control,” according to a letter from Feucht to the city. There is no indication in city records of where those trucks came from or if they were from a certified disadvantaged company.

During an HRC on-site review in 2015, Joyce Sutton Cameron told the city she employed two drivers and had two trucks. During that same year, Green Star was the subcontractor for Barrett Paving Materials on two Ohio Department of Transportation projects in Miami and Hamilton counties and three other road projects in Montgomery County; as well as jobs for four other private companies, city and ODOT documents say.

RELATED: These documents reveal what feds are looking at in Dayton-area probe

Barrett, which has offices in the Dayton region but is based in New Jersey, used Green Star for $9.1 million in ODOT projects since 2012. It paid Green Star $96,050 for that work, according to ODOT.

City records show Barrett used Green Star on nearly $5.2 million in contracts for three paving projects at Dayton International Airport and Dayton-Wright Brothers Airport between 2011-2018. The records do not indicate what Green Star was paid.

Barrett did not respond to requests for comment.

Steve Rauch Inc. received the contract for demolition and site preparation in downtown Springfield, using Green Star Trucking as the minority subcontractor.Here crews began work on a set of new townhomes developed by Charles Simms set to be available in downtown Springfield by 2020.

Rauch also used Green Star to meet minority participation goals for the $340,642 contract the city of Springfield awarded his company in March to do demolition and site preparation on city-owned land where developer Charlie Simms is building town homes. Green Star’s share of the contract is about $61,300, according to city of Springfield documents.

A WHIO-TV video and Springfield News-Sun photos shot when the work began in April shows a green dump truck with the Green Star name on the job site.

Rauch also paid Green Star $24,000 for the demolition of the former Middletown High School/Vail Middle School in Middletown, according to the Ohio Facilities Construction Commission.

Neither Green Star nor Rauch currently are doing work for the city of Dayton, according to Fields and Dickstein.

“Should something come back, in terms of an ongoing investigation, that would impact their certification status,” Fields said of Green Star, “The city most likely would not want to do business with them.”

Steve Rauch Inc. of Dayton was the prime contractor for demolition of the old Middletown High School and Vail Middle School on Girard Avenue, which began on Wednesday, Sept. 26, 2018 in Middletown. Green Star Trucking of Trotwood was the subcontractor. NICK GRAHAM/STAFF(Staff Writer)

City contracting targeted in federal probe

Common witnesses connect the indictments in the regional corruption probe, Tabacchi said.

Of the seven people indicted in the public corruption investigation, two Dayton men have pleaded guilty: former state Rep. Clayton Luckie, 56, and former Dayton City Commissioner Joey D. Williams, 53.

On Friday Luckie was sentenced to four months in prison, followed by four months of home detention and three years of court supervision. Luckie admitted that he accepted $2,000 in a scheme to defraud the city of Dayton by using its disadvantaged business program to help a non-disadvantaged demolition contractor fraudulently complete city contracts between June 2016 and January 2017, according to court documents.

Luckie, a Democrat, resigned from the legislature in 2013 and served three years in prison after being convicted on charges related to misusing campaign account funds.

RELATED: Here’s how the feds say Clayton Luckie participated in a fraud for $2K

Williams pleaded guilty to one count of corruptly soliciting a bribe. He will be sentenced on Jan. 29.

Williams admitted that he accepted discounted home improvements and several thousand dollars in cash from a business owner seeking city work in 2015. In return, Williams encouraged at least one city employee to find work for the business, according to a statement of facts Williams signed as part of his plea agreement.

He admitted that he voted to approve a contract between the city and the business without disclosing the improper benefits. The business received demolition contracts worth more than $5,000 from the city of Dayton and CityWide Development Corp., the statement says.

RELATED: Ex-city commissioner Joey Williams pleads guilty, apologizes to ‘citizens of Dayton’

CityWide President Brian Heitkamp said he does not believe the nonprofit wrongly awarded contracts.

“CityWide has reviewed all of the demolition contracts that were awarded during the time period in question, and we believe that those jobs were properly awarded,” Heitkamp said.

Trials are scheduled in 2020 for former city of Dayton business and technical assistance administrator RoShawn Winburn, 45, and Dayton businessman Brian Higgins, 48. Both pleaded not guilty.

Brian Higgins, Clayton Luckie, Joey Williams, and Roshawn Winburn

Winburn, faces three counts of honest services wire fraud, two counts of corruptly soliciting a bribe and one count of making a false statement to the FBI. A former Huber Heights councilman, Winburn was fired in May as the Human Relations Council’s business and technical assistance administrator.

The indictment alleges Winburn solicited and accepted more than $20,000 in cash from individuals and companies between 2014 and 2017. In return, Winburn allegedly provided minority and other small-business certifications without performing complete verification of qualifications.

He’s also accused of disclosing confidential information on upcoming projects and influencing city employees to not fully sanction those who failed to comply with contractual obligations.

RELATED: City fires administrator after federal bribery, fraud charges

Higgins is the only one indicted without a direct connection to government contracting. He was indicted on three counts of mail fraud and one of wire fraud for allegedly defrauding an insurance company in 2014 and 2015 with a claim involving a leaking fish tank that damaged his home.

Changes expected at city of Dayton

The city will soon receive a comprehensive, independent investigation by the law firm Green and Green, which is looking at how the city’s contracting is handled and how HRC monitors compliance with contractors and its various disadvantaged business programs, Dickstein said.

Dayton City Manager Shelley Dickstein(Staff Writer)

Accountants Julian and Grube are also reviewing procurement practices. Once those reports are done, Dickstein anticipates recommending changes in how the city does business. She said that might include pulling compliance monitoring responsibilities from the Human Relations Council and moving it to the law department.

Fields, whose office falls under the authority of the city commission and not Dickstein, opposes that.

“I would like it to remain at HRC,” Fields said. “I think that there needs to be considerable investment in resources and staffing to ensure and prevent that something like this doesn’t happen again, so people taking advantage of the system doesn’t happen again.”

Dickstein said “bad actors” exist and it is the city’s job to do everything it can to stop them and to protect taxpayers. She said doing that may mean having some “very spirited conversations about where we go into the future, from all aspects.”

“So at the end of the day, I am confident that we will have the information and the data to address that, whether it’s through more resources, reorganizing, amending or adjusting processes,” Dickstein said.


How to spot fraud and theft in government offices

Ohio Auditor Keith Faber said there are “red flags” that could be signs of fraud, which can be reported by calling his Fraud Hotline at 866-FraudOH or emailing fraudohio@ohioauditor.gov.

The potential signs are:

•Employee lifestyle changes, such as owning expensive cars, jewelry, homes or clothes.

•Refusing to take a vacation or sick leave.

•Poorly defined job duties and inadequate monitoring.

•Excessive and/or unauthorized voided receipts.

•Inordinate volume of manual checks.

•Unsupported financial transactions or adjusted journal entries.

•Photocopied or missing documents.

Source: Ohio Auditor’s Office

STAYING WITH THE STORY

The Dayton Daily News first broke the news about a federal investigation into corruption in the Dayton region. The newspaper will continue to dig into this important story to find out what’s really going on. If you have tips or any information on this investigation, please call or email Lynn Hulsey at 937-225-7455 or lynn.hulsey@cmg.com.

Other stories by Lynn Hulsey

Meet the 66 top employers in the Dayton region. How big are they?

Houses going fast in booming Dayton housing market

‘Magnet for high tech:’ How research drives Wright-Patt’s $15.5B impact

Critics say township should spend money on roads, not salaries

Trucking industry must overcome challenges to continue growth