The Dayton Daily News previously obtained copies of many of the records sought by investigators; many of the records the newspaper obtained in the course of reporting on other stories. This story digs into those records to examine what information federal agents have reviewed in their investigation.
The records show:
• Links between former Trotwood mayor Joyce Sutton-Cameron’s company Green Star Trucking and the companies owned by Steve Rauch, whose businesses have been raided by law enforcement and are also named in the subpoena.
• A 2016 contract Rauch received from the city — and sub-contracted to Green Star — was his first in years after the city terminated a contract because of concerns about him using improper fill after demolishing homes.
• The city of Dayton lost access to federal funding because the U.S. Department of Housing and Urban Development concluded the city lacked documents proving some projects and costs were eligible and allowable under the program.
• A federal review found Dayton’s former planning director Aaron Sorrell “submitted false claims for payment” to a government payment and reimbursement system, though an audit for the city by an outside firm found no evidence money was misappropriated.
FBI Spokesman Todd Lindgren declined to comment on the ongoing investigation.
Both Rauch and Sutton-Cameron told the Dayton Daily News they didn’t know why federal investigators demanded records related to their businesses.
“I don’t know anything about it,” Rauch said.
Green Star Trucking
A Nov. 1, 2017, subpoena orders the city of Dayton to hand over contracts and other city documents about companies owned by Rauch — a prominent businessman who has received millions of dollars in city demolition contracts — as well as Green Star Trucking.
Green Star is owned by Sutton-Cameron, who served as mayor of Trotwood from 2010 through 2016. Of the $4,619 Sutton-Cameron had in campaign funds in her 2015 losing re-election bid, $3,000 was donated by Rauch, according to Montgomery County campaign finance forms.
Sutton-Cameron told the Dayton Daily News last week she has no idea why her company’s records were sought by federal investigators. The subpoena came amid a covert FBI investigation into corruption in Dayton-area politics that became overt with the unsealed indictments in April.
State records show Green Star Trucking was incorporated in 1992. The company lost its business license in 2007 due to failing to maintain a statutory agent, but was reinstated by Sutton-Cameron in 2008. In 2018, state records say Sutton-Cameron also registered the trade name Green Star Labors for the purpose of “supplying unskilled labor to the construction trades.”
Green Star is a trucking company certified by the city of Dayton’s Human Relations Council as both a minority-owned and a woman-owned business, according to city records obtained by the Dayton Daily News.
The HRC’s disadvantaged business certification records list Sutton-Cameron, her husband James Cameron and two semi-skilled workers as employees in 2015. The company had $696,800 in sales in 2014, the records say. The documents list Sutton-Cameron’s net worth at $416,000. These documents are from the same time frame that the federal investigators subpoenaed. The Dayton Daily News filed a public records request for more recent records related to Green Star but the city hasn’t provided them.
Sutton-Cameron said last week her husband is not part of the company.
City contracts show Green Star was hired as subcontractors by demolition and construction companies doing work for the city of Dayton. Using minority- or woman-owned subcontractors helps larger companies meet the city’s disadvantaged business set-aside goals.
Rauch used Green Star
One of the last city contracts awarded to Rauch in May 2016 listed Green Star as a subcontractor. That $267,320 contract was for the demolition of roughly 30 homes in Dayton.
The contract had diversity participation goals that called for 10 percent of the work to go to a minority-owned business and 5 percent to go to a woman-owned business. Rauch subcontracted with Green Star to meet both goals.
The subcontract agreement says Rauch would pay Green Star $40,120 to use three trucks to haul material.
The city employee who reviewed Rauch’s bid for compliance with the disadvantaged business rules was RoShawn Winburn, one of the men charged in the federal indictment, according to city records. Winburn is accused of accepting bribes from people and companies that he certified as minority and disadvantaged businesses without a proper review of their qualifications. The indictment also says he leaked confidential information to companies about upcoming demolition contracts.
RELATED: Dayton worker accused of bribery runs business linked to city department
Winburn has pleaded not guilty. His attorney didn’t respond to requests for comment.
Cameron: ‘It will come out’
City records include on-site inspections with Green Star in 2012 and 2015 that include dozens of questions about who runs the company and its disadvantaged status.
The May 2015 inspection says James Cameron is one of the two people who oversee job sites but Sutton-Cameron is in charge of most aspects of the business and is 100 percent owner. Green Star had two trucks, the report says, and lists a lot in Dayton where its trucks are stored.
A Dayton Daily News reporter visited that lot and found James Cameron sitting in a pickup truck. He said the trucks are no longer stored there but would not say where they moved them. “Get it from the city,” he said.
Cameron said they never had any problems with their minority contracting designation and he has no idea why their records were subpoenaed.
“I imagine it will come out sooner or later,” he said.
Public Utilities Commission of Ohio records show Green Star Trucking currently has five trucks and four drivers.
Rauch faced prior problems
The federal subpoena from Nov. 1, 2017, also asks for records pertaining to Rauch’s companies Steve Rauch Inc., SRI and Steve Rauch Trucking.
SRI is a construction and demolition debris landfill owned by Rauch. It was among several Rauch properties raided by federal agents in December 2016. Federal investigators didn’t announce a reason for the raid — the search warrant is sealed — but said it was led by the Southern District of Ohio Financial and Electronic Crimes Task Force.
Rauch also faces state illegal dumping charges in Montgomery County Common Pleas Court. The Ohio Attorney General alleges Rauch improperly dumped material in his landfill as well as on property owned by the city of West Carrollton.
Rauch uses several minority contractors to help him meet city subcontracting goals, he said, and has never had a problem with Dayton’s minority contracting program.
Sorrell oversaw HUD program
Sorrell’s personnel file and documents related to the Dayton/Kettering Consortium are included in another federal subpoena issued to the city of Dayton on Nov. 27, 2018.
A similar subpoena for consortium-related documents was sent to the city of Kettering.
Sorrell worked for the city of Dayton from July 2000 to July 2017 and most recently was the city’s director of planning and community engagement, according to his personnel file.
He resigned after being placed on administrative leave in mid-2017.
After he stepped down, the Dayton Daily News obtained his emails and revealed that the city of Dayton forfeited nearly $477,000 in federal HOME funds for housing development and assistance after missing key deadlines.
After a December 2017 visit, HUD officials recommended the city of Dayton repay $166,145 in “unallowed” costs to the HOME program and also produce documentation justifying more than $1.1 million in questionable and unsupported costs after its review.
In September 2018, HUD’s Office of Community Planning and Development in Columbus sent Dayton’s city manager a letter saying HUD had rejected the Dayton/Kettering Consortium’s fiscal year 2018 HOME program certification and disapproved of the consortium’s HOME section of its action plan.
HUD rejected the certification because the city failed to demonstrate that it used HOME funds for eligible activities and expenses because it lacked proper documentation and evidence showing compliance with federal regulations, according to the letter.
‘Reasons unknown’ for Sorrell’s actions
The city of Kettering participates in HUD’s HOME program through an agreement with the city of Dayton. Dayton, as the lead organization, is responsible for ensuring the program complies with HOME regulations.
The city of Dayton revised about 240 HOME vouchers between 1997 and 2015. HUD examined 19 of those vouchers related to more than $1 million in federal funds, HUD officials said.
Sorrell reassigned about $840,775 of those funds to other activities that weren’t properly explained and documented in the payment system, according to a June 2018 report.
Dayton staff couldn’t explain the pattern of reassigning funds and the city did not have documents to show the costs were eligible and allowable, HUD officials said.
Sorrell reassigned the money, the report says, for “reasons unknown to current city staff.”
MORE: Dayton forced to give up $477K for missing deadline
Defunct charter school involved
Some voucher revisions were associated with HOME activities completed by the Improved Solutions for Urban Systems, a charter school founded in 1992, the report says.
The city entered into multiple contracts with the group from the late 1990s to early 2010s to build and rehab homes.
ISUS ceased operations after the Great Recession hit, the housing market crashed and the group ended up more than $2 million in debt, officials said.
The properties sat unfinished, boarded up or vacant for more than four years, which meant the city should have repaid the HOME program $166,145, according to the report.
But instead, the city approved a $250,000 contract in June 2014 with HomeStart, doing business as CountyCorp, for work on two properties that ISUS started, the report says.
“Mr. Sorrell submitted false claims for payment into IDIS (the payment system) and expressly certified compliance with federal rules to draw down additional funds for a HUD-blocked activity,” the center’s report says. “This is a violation of the false claims provision and false certification liability of the False Claims Act.”
The False Claims Act says anyone who knowingly submits or causes to submit a false claim to the government will be civilly liable for the government’s damages and penalties.
The city of Dayton hired an outside firm, GBQ Consulting, to complete a forensic audit of certain parts of the HOME program, including the 240 voucher revisions and the documents reviewed by HUD.
“In our opinion, the forensic audit revealed no evidence that any HUD funds were misappropriated as a result of the revisions to the vouchers,” wrote GBQ Consulting in a Feb. 19, 2019, letter to the city outlining the results of its audit.
The city is still waiting to receive a monitoring report from HUD related to a July 2018 visit, in which inspectors took a closer look at the HOME program. The city has disputed some of the information and numbers in the snapshot report.
Josh Sweigart is a member of the Investigation & Community Impact Team for the Dayton Daily News whose stories have focused on government waste, fraud, abuse and accountability. He's won several awards for investigative reporting, including an Emmy Award and numerous awards from the Associated Press Society of Ohio and Society of Professional Journalists. Contact him on Facebook or Twitter.
CONTACT US
If you have tips or any information on this investigation, please call or email Josh Sweigart at 937-328-0374 or at josh.sweigart@coxinc.com
