State seeks nearly $8M from Youngstown developer, former city official

The Ohio Auditor reported on Thursday that after years of investigation, it has issued findings of $1 million in adjustments, almost $8 million in findings for recovery against a former Youngstown city official and several business development companies managed by Dominic Marchionda and his wife, Jacqueline, or New York business partner, James Pantelidis.
The audit stems from an investigation that lead to Dominic Marchionda, former Youngstown Finance Director, David Bozanich, and others pleading guilty to crimes related to several Youngstown development projects.
In 2009, the City granted $1,200,000 in excess of Water and Wastewater funds to the developer, Dominic Marchionda for the Flats at Wick project.
However, according to investigators, Marchionda used $1,000,000 of the money to buy the fire station located at 145 Madison Avenue, which was not permitted through terms of the grant.
The transaction also improperly transferred money from the Water and Wastewater Funds to the General Fund, as part of a money-laundering scheme orchestrated by former Finance Director Bozanich, say investigators.
As a result, the city has been ordered to pay a total of $1 million into its Water Fund and Wastewater Fund.
According to the auditor, Marchionda used $200,000 of the $1,200,000 wastewater grant to take part in a money-laundering scheme with Bozanich who purportedly arranged to make it appear that the fire station was still useful to the city.
The City paid $3,220 in closing costs to the Hunter-Stevens Land Title Agency LTD as part of the fire station property transaction, resulting in what investigators say was a misappropriation of $614,608 of city funds.
The auditor’s office says Marchionda also submitted false documentation to the city when requesting a grant amendment claiming the project had encountered $600,000 in additional expenses.
The city agreed to grant money to cover a portion of those additional expenses, even though auditors say the project only required an additional $248,941 for unexpected water and wastewater costs.
A finding for recovery has been issued for the $220,000 provided by the City for public funds that were converted or misappropriated by Marchionda.
The audit also says three loans that Marchionda’s companies obtained from the state for restoring old industrial brownfields in the city have been declared in default. As of July, the balances of those three loans totaled more than $7 million.
A finding for recovery of $614,608 was issued against David Bozanich and his bonding company.
“This type of corruption has a history of running rampant throughout the City of Youngstown and the citizens deserve better,” said Auditor Keith Faber. “Laws and financial guidelines are in place to avoid fraud and abuse, however, when the wrong people are put in a position of public trust, their greed and duplicity gets the better of them.”
