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News Release

For Release: November 01, 2007

U.S. Department of Justice

United States Attorney
Northern District of Ohio
Gregory A. White
United States Attorney

Ann C. Rowland
Assistant U.S. Attorney
216-622-3600

Antoinette Thomas Bacon
Assistant U.S. Attorney
216-622-3600

Gregory A. White, United States Attorney for the Northern District of Ohio, together with Jose A. Gonzalez, Special Agent in Charge, Internal Revenue Service, Criminal Investigation, Cleveland Field Office, C. Frank Figliuzzi, Special Agent in Charge of the Cleveland Division of the Federal Bureau of Investigation, and Michael McGrath, Chief, Cleveland Division of Police, announced the unsealing of a five-count grand jury indictment charging three individuals in the investigation of corruption in the Cleveland Division of Water. The indictment charges Jimmy Lee Gates, Assistant Chief of Distribution of the Cleveland Water Division, Oscar Wells, Retired Water Pipe Repair Supervisor of the Cleveland Water Division and Liberator Noce, owner of Libby Construction, Inc. and Noce Enterprises, Inc., with one count of Hobbs Act bribery, one count of conspiracy to commit Hobbs Act bribery and one count of conspiracy to commit money laundering. Wells was also charged with two additional counts of Hobbs Act bribery.

The indictment alleges that Noce, who was paid $3.2 million by the City of Cleveland Water Division from 2002 through 2004 to repair and replace hydrants and valves, paid bribes to former Cleveland Water Division Supervisor Norman Gore totaling approximately $14,000 per year from 1999 through 2003 in exchange for Gore processing Libby Construction invoices in a timely manner. In a separate case, Gore pleaded guilty to bribery, and is now serving a 5-year federal sentence.

The indictment also alleges that, beginning in approximately 2002, and continuing through 2003, Noce paid cash bribes to Wells in exchange for Wells approving payment of inflated Libby Construction invoices.

The indictment further alleges that in 2003, Noce paid bribes to Gates and Wells totaling approximately $40,000 which Gates and Wells split, in exchange for Wells and Gates approving payment of inflated Libby Construction invoices.

The indictment also alleges that an unnamed contractor paid cash bribes to Wells in exchange for work twice in 2004, once in the amount of $200 and once in the amount of $100.

Gates, age 50, resides at 3542 East 149 Street, Cleveland, Ohio. Wells, age 58, resides at 354 Knollwood Trail, Richmond Heights, Ohio. Noce, age 66, resides at 2830 Loreto Drive, Willoughby Hills, Ohio.

Today’s indictment follows the convictions of three former City of Cleveland Water Division employees and seven Water Division contractors:

(1) Norman Gore, General Storekeeper at the Water Division, was convicted on April 25, 2005 and sentenced to 60 months incarceration. He was ordered to pay $1,337,597.20 restitution to the City of Cleveland;
(2) James Stallworth, Warehouse Manager at the Water Division, was convicted on November 18, 2004. Stallworth was sentenced to a 33 month term of imprisonment and ordered to pay $793,000 restitution to the City of Cleveland;
(3) Kenneth McNeil, Head Storekeeper at the Water Division, was convicted on November 17, 2004 and sentenced to 3 years probation. He was ordered to pay $10,000 in restitution to the City of Cleveland.
(4) Joseph B. Sturman, President and Owner of Victory White Metal Company, was convicted on November 22, 2004 and sentenced to 24 months incarceration, a $10,000 fine, and ordered to pay $1,156,853 restitution to the City of Cleveland. Sturman agreed to forfeit $584,705 in illegal proceeds;
(5) Samuel Petrony, Head of the Water Division at Victory White Metal Co., was convicted on November 29, 2004 and sentenced to 41 months incarceration and ordered to pay $1,949,853 restitution to the City of Cleveland;
(6) Arnold Kaufman, President of Woodhill Supply Co., was convicted on January 5, 2005 and was sentenced to 21 months incarceration and a $5,000 fine. Kaufman was ordered to pay $180,744.21 in restitution to the City of Cleveland, and Kaufman agreed to forfeit $90,372.10 in illegal proceeds;
(7) Michael Semlar, Salesperson at Woodhill Supply Co., was convicted on March 22, 2005. Semlar was sentenced to a 21 month term of imprisonment and ordered to pay the City of Cleveland $180,744.21 in restitution.
(8) Sebastian Morabito, Owner of Morabito Trucking, was convicted on January 25, 2007. Morabito was sentenced to a 24 month term of imprisonment and a $25,000 fine. He was ordered to pay the City of Cleveland $75,000 restitution.
(9) James Oppermann, Owner of Richmond Valve and Pipe, was convicted on April 10, 2007 and sentenced to 6 months home confinement without electronic monitoring and $37,000 in restitution to the City of Cleveland.
(10) Peter C. Zappola, a sales representative for a plumbing supply company, was convicted on June 8, 2007 and sentenced to imprisonment of 12 months and one day and restitution in the amount of $216,000 to the City of Cleveland.

An indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.

The case was presented to the grand jury by Assistant United States Attorneys Ann C. Rowland and Antoinette Thomas Bacon following investigation by the FBI, the IRS and the City of Cleveland Division of Police.

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Cleveland Water Indictments Nov 2007
 
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