The Dynus timeline
The following is a timeline of events in the Dynus fiber optics scandal in Butler County. The investigation started in 2005 when Butler County Commissioner Chuck Furmon asked the FBI to look into whether fiber optics firm Dynus Corp. took out a multimillion dollar loan in the county’s name without approval.
Aug. 9, 2004: County Auditor Kay Rogers signs a mutual confidentiality agreement with Jim Smith, chief marketing officer of CBS Technologies, which later became Dynus Corp.
Sept. 15, 2004: Rogers signs a declaration that Smith is a representative of the county.
Dec. 31, 2004: Rogers signs a resolution at her home saying the county would borrow roughly $5.3 million from National City Bank for a fiber-optics deal with Dynus Global Communications. The resolution listed Rogers and Smith as representatives of the county.
Dec. 31, 2004: Rogers and County Commissioner Michael Fox have phone conversation with National City.
Jan. 12, 2005: A Dynus representative identified by the FBI as "JS" paid $9,500 to "HRH, a third-party intermediary company," according to the FBI.
Jan. 19, 2005: HRH pays $9,500 to Rogers.
Feb. 28, 2005: Smith meets with commissioners about planned project.
July 28, 2005: Commissioners approved an agreement with Dynus Corp., allowing the company to use four of the county's fibers in exchange for the company luring new jobs and investment into the county.
Aug. 26, 2005: Dynus' line of credit with Fifth Third increased from $3 million to $7 million as a result of the Butler County contract.
Late August 2005: County receives invoice for lease agreements and discovers debt with National City.
Sept. 6, 2005: Commissioner Chuck Furmon and National City Bank officials contact the FBI.
Sept. 14, 2005: County administration meets with Dynus and National City officials, seeking a way to settle the dispute.
Sept. 16, 2005: Commissioners unanimously sever the economic development agreement.
Sept. 22, 2005: FBI begins investigation of potential bank fraud, other crimes.
Sept. 26, 2005: Rogers returns the $9,500 to HRH "in an effort to conceal the receipt of (the money)," according to the FBI. The money then went back to J.S.
Oct. 6, 2005: Commissioner Charles Furmon says Rogers, Smith, West Chester Twp. Trustee and Dynus Financial President George Lang, County GOP Executive Director and Dynus Technologies Government Relations Director Scott Owens, Dynus CEO Orlando Carter, and officials from Fifth Third Bank met March 8, 2005 to discuss the debt.
Oct. 11, 2005: Fifth Third gives Dynus three days to pay back $6 million because the Butler County contract is in question.
Oct. 14, 2005: Fifth Third halts Dynus' payroll, locks doors, and files suit for default in Hamilton County.
Nov. 10, 2005: Butler County files lawsuit against Dynus, National City to absolve debt. National City forgives debt.
Feb. 2006: Dynus sues the county for $12 million, the value of the disputed contract with the county plus punitive damages.
March 29, 2006: Rogers does not disclose the receipt of $9,500 from J.S. or Dynus in her financial disclosure statement, according to federal officials.
Sept. 2006: Dynus officials drop their lawsuit, saying they want to give the FBI investigation time to pan out.
Sept. 2007: Dynus' deadline to refile comes and goes as the FBI investigation trudges on.
Feb. 25, 2008: Court records are unsealed that includes County Auditor Kay Rogers' guilty plea to bank and mail fraud, and tax evasion.
March 4, 2008: County Auditor Kay Rogers resigns amid pressure from state and local officials.
May 7, 2008: Federal officials release 11-charge indictment of Carter for charges including bank fraud, and release guilty pleas to bank fraud from Smith and Dynus projects manager Karin Verbruggen.
Aug. 2009: Carter found guilty on 11 felony charges for his part in a scheme that cost two banks more than $10 million, caused his company's 2005 collapse and ignited political scandal in Butler County. Rogers, Smith and Verbruggen all pleaded guilty in the case.
Oct. 29, 2009: U.S. District Court unseals an eight-count indictment on former Butler County Commissioner Michael Fox. The indictment also names Robert Schuler, the son of a late state legislator and friend of Fox dating back to their days at Miami University. The U.S. Attorney's Office said Fox and Schuler "conspired to improperly benefit from Butler County contracts involving a (fiber optics) company doing business with the county," and that the men failed to report income from the deals on their federal income tax returns. Fox is also charged with mail fraud for allegedly failing to disclose conflicts of interest in Ohio ethics disclosure statements he mailed annually from 2004 through 2007. Schuler is charged with perjury for alleged false testimony he gave to a federal grand jury on Oct. 1, 2008.
June 9, 2010: Carter is sentenced to 15 years in prison.
Aug. 4, 2010: The federal government files a superseding indictment against Michael Fox adding the term "kickback and bribery scheme" to the original indictment. In subsequent filings, Fox's defense attorneys claimed this was a new indictment but it was allowed. Also, Fox's attorney's attempted to have all charges dismissed, which they were not.
Aug. 25, 2010: After the Oct. 4 trial was delayed, Michael Fox's trial was set for April 11, 2011. A preconference trial was set for March 9, 2011.
Dec. 15, 2010: George Lang is indicted on a federal perjury charge. The U.S. government said the West Chester Twp. trustee lied under oath during the Carter trial. Lang claimed he did not know Jim Smith was an employee of Dynus.
Jan. 25, 2011: The federal government lays out its case, showing its evidence Lang knew Jim Smith was an employee of Dynus. That evidence included sworn statements from Smith and former Butler County GOP Chair Scott Owens, documents from Lang's companies, and e-mails from Lang identifying Orlando Carter and Smith as the "leadership" of Dynus.
Jan. 30, 2011: George Lang's federal perjury trial begins.
Feb. 9, 2011: George Lang acquitted on federal perjury charge.
March 7, 2011: Michael Fox's attorneys file a change of plea motion. Fox had pleaded not guilty to several federal charges, including mail fraud and conspiracy.
March 9, 2011: Michael Fox pleads guilty in federal court to conspiracy to commit mail and wire fraud and filing a false tax return. He faces up to four years in prison. A sentencing date has not been set.
June 24, 2011: The attorney for Kay Rogers files a sentencing memorandum asking U.S. District Court Judge Sandra Beckwith to incarcerate the former county auditor for one day. Rogers' attorney said the reason it took four years for the federal government to sentence Rogers due to her cooperation with the FBI in its investigations of Dynus officials Orlando Carter, Jim Smith and Karin Verbrugeen; West Chester Twp. George Lang, who was acquitted on a perjury charge; former county GOP finance director and nightclub owner Joe Ruscigno, who pled guilty to obstruction; and former Butler County politician and Children Services director Michael Fox, who pled guilty to conspiracy to commit wire fraud, mail fraud and filing a false tax return and agreed to a four-year sentence so long the federal government dropped any corruption charges.
July 26, 2011: Kay Rogers is sentenced to two years in prison and five years of probation for her role. She joins a list of co-defendants expected to pay $4 million in restitution.
CINCINNATI — The emotions from being sentenced for two years in prison poured from Kay Rogers after the judge sentenced the former Butler County auditor for her role in the Dynus scandal that has plagued the county for years.
She also was ordered to pay $4 million in restitution to National City Bank along with co-defendants, who were not named in court or afterward by U.S. Assistant Attorney Jennifer Barry, the lead prosecutor in the case.
Dynus Corp. was contracted by Butler County early last decade to operate the county’s fiber-optics system, which was built to help spur economic development. But Rogers was at the core of the scandal, falsifying documents that secured loans for Dynus while in the name of the county.
Rogers pleaded guilty in December 2007 to conspiracy to commit bank and mail fraud, and to filing a false income tax return.
With Tuesday’s sentencing, Barry said after the noon hearing, “I think it’s safe to say this investigation is concluded.”
About 50 people, mostly friends and family of the disgraced former officeholder, packed the courtroom of U.S. District Court Judge Sandra Beckwith. Rogers, poised for most of the hearing, became emotionials while apologizing to the court and the county.
“I got in over my head and made a very, very bad decision,” she said.
Beckwith took into consideration Rogers’ cooperation with federal investigators, family situation (six children, but only two younger than 18, one developmentally disabled), early plea, and acceptance of responsibility, but she said she could not overlook the violation of the public’s trust.
“The sentence ... takes into account Ms. Rogers’ conduct and the large background to it,” Beckwith said about her key role in the scandal. “The sentence will send a message. It should be a source of deterrent of the conduct of any type by any other elected official.”
After the sentencing hearing at the Potter Stewart United States Courthouse, family and friends of Rogers physically showed their emotion, hugging her.
In addition to two years in prison — her reporting date will be set by the Bureau of Prisons within 30 to 90 days — Rogers was ordered to five years’ probation.
Barry said Beckwith’s sentence “reflects the cooperation that Ms. Rogers provided, but more significantly reflects the seriousness of this offense and that public officials are going to be held accountable for their actions while holding public office.”
Hamilton resident Jim Fogle said Rogers deserved her sentence.
“Kay Rogers is not above the law,” he said. “She pleaded guilty to the crimes and therefore she needed to pay the price. Just because she was once a county official should not hold any bearing on her sentencing.”
Dynus took out two loans from National City Bank totaling approximately $6.4 million. Rogers signed a resolution on Dec. 31, 2004, at her home — on behalf of the county, but without the commissioners’ knowledge — saying the county would borrow $4 million from National City. Dynus used the loan money to borrow approximately $4 million from Fifth Third Bank.
The scheme began to unravel when the county received an invoice from National City for the debt in late August 2005.
Butler County Commissioner Chuck Furmon and National City officials called the FBI to investigate on Sept. 6, 2005.
Rogers eventually pleaded guilty in December 2007 and resigned as county auditor in March 2008.
In all, the Dynus scandal defrauded National City and Fifth Third banks of more than $10 million. Dynus executives secured a loan from Fifth Third on the back of the fraudulent National City loan.
After the sentencing, Rogers was escorted by her family and friends out the courthouse’s back entrance, shielding her from the media, to an awaiting silver pickup truck.
Rogers didn’t speak after the hearing, but her attorney, Konrad Kircher, said the judge did take into account her cooperation, but “it’s obviously very devastating to her friends and family that she’ll be gone for two years.
“I think after the initial shock of the sentencing, hopefully she’ll do well in the next couple of years,” he said. “She’s a tough lady, she’s accomplished a lot in life and we’re all hoping for her.”
Former West Chester Twp. Trustee Jose Alvarez, who ran for county commission last year, is “a little surprised” by the sentence. He was at the courthouse Tuesday.
“Many people know her for her generosity and the efforts that she put in both the community and her family,” said Alvarez, a 22-year friend of Rogers. “(I’m) devastated, saddened for the family, for her, for the community that’s suffered all this embarrassment. It’s not a good day, but we’ll move on and I’m sure she will also.”
Furmon said the invoice asking for payment on a multimillion dollar loan raised questions.
“I did not know who was guilty of what,” Furmon said in a statement. “I did know there had been violations of the law and I wanted it handled properly and not swept under the rug.”
At the time, Furmon said he did not realize the “trust and confidence of the citizens of Butler County had been betrayed.”
“Elected officeholders swear on numerous occasions to uphold the constitution and to protect the citizens of Butler County; therefore elected officeholders should be held to a higher standard.”
Butler County Republican Party Executive Committee Chairman Dave Kern said his heart goes out to Rogers and her family, but the party “certainly does not condone any illegal activity.”
The dark cloud of the scandal is not only over the county, but also the GOP, because all officials involved were Republicans, which is “certainly not one of our proudest moments,” Kern said.
“As soon as we become aware (of illegal activities), we will not tolerate such actions,” Kern said, highlighting that ,the party recognized some problems with Rogers in 2006 when Roger Reynolds was endorsed over the then-incumbent auditor. She beat Reynolds in the 2006 primary.
“She tricked the public into voting for her, but the party rejected her. I think that speaks to the credit to the party,” Kern said.
Rogers’ sentencing had been delayed since her December 2007 guilty plea due to her cooperation with the FBI. Kircher said his client wore a wire to about 100 face-to-face interviews with subjects of investigations.
According to Kircher, Rogers provided information in investigations that include former Dynus executives Orlando Carter and Jim Smith; former Dynus employee Karin Verbruggen; West Chester Twp. Trustee George Lang; former county GOP Finance Director Joe Ruscigno; and former politician and Butler County Children’s Services Director Michael Fox.
The last player in the county’s fiber optics scandal is Fox. He was not involved in the Dynus scandal, but Fox pleaded guilty on March 9 to conspiracy to commit wire and mail fraud and filing a false tax return for his connection in NORMAP — the company that built the county’s fiber optics system. He signed a plea agreement to be sentenced to four years in prison, but a sentencing date has yet to be set.
Staff Writer James Sprague contributed to this report.
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