AKRON — Former Lorain Community Development Director Sandy Prudoff pleaded guilty Wednesday to five federal charges linking him to the long-running Cuyahoga County corruption investigation.
Prudoff, 69, won’t be sentenced until Aug. 16, but the plea agreement the ex-city official reached with federal prosecutors calls for him to serve two years behind bars. He would be due to report to federal prison Sept. 30.
Prudoff answered U.S. District Judge Sara Lioi’s questions respectfully during Wednesday’s hearing, which lasted around 50 minutes, as he entered guilty pleas to conspiracy to commit mail fraud, making false statements to law enforcement and three counts of making false statements on income tax returns.
Prudoff declined to comment as he left the federal courthouse in Akron.
John Ricotta, Prudoff’s attorney, said beating the tax charges — which accused his client of not telling the federal government about $116,000 that he received for consulting work that prosecutors contend he never did — would have been especially difficult for Prudoff to beat at trial.
“One way or another, I couldn’t get around the fact that he didn’t report the income,” Ricotta said.
Had Prudoff gone to trial and been convicted of the tax charges as well as conspiracy and making false statements to law enforcement, Ricotta said, he feared his client would have ended up with a far longer prison sentence under federal sentencing guidelines.
Prudoff will have to pay roughly $48,000 in back taxes, according to the plea agreement.
The conspiracy charge against Prudoff centers on consulting work he did for Alternatives Agency Inc., a Cleveland halfway house that has been at the heart of the Cuyahoga corruption probe.
The investigation, which became public in 2008, has seen more than 50 lawyers, vendors and government officials, including former Cuyahoga County Commissioner Jimmy Dimora and former Cuyahoga County Auditor Frank Russo, convicted.
Prudoff and a man matching the description of William Wells, the son of Prudoff’s longtime girlfriend, took in around $144,000 in fees for consulting work they purportedly did for Alternatives between July 2003 and March 2006, according to prosecutors.
Wells has not been charged, and Ricotta said the $144,000 that Prudoff will be required to pay in restitution to Ohio as part of the plea bargain includes money that Wells made from Alternatives.
Ricotta and Prudoff have previously said Prudoff was hired to help Alternatives, which has since changed its name, find a Lorain County location for a transitional housing facility for prisoners run by the company.
During an Aug. 19, 2009, interview with the FBI, “Prudoff said that he performed site selection reviews for Alternatives Agency in every city in Lorain County other than the city of Lorain, when Prudoff then well knew that in truth, he did not,” the plea agreement signed by Prudoff said.
That comment was the basis of the making false statements to law enforcement charge.
Prudoff was brought into Alternatives by Anthony Calabrese III, a former partner with the law firm of Vorys, Sater, Seymour & Pease, which did work for both Alternatives and the city of Lorain, according to the plea agreement.
Calabrese allegedly used his influence at Alternatives to maneuver the company into hiring consultants of his choosing, according to the plea agreement and other court documents filed in the corruption case. He also kept certain Alternatives executives in the dark about what the consultants were doing to earn the money they were paid.
For instance, “Calabrese did not inform the AA board about payments for consultants on a Lorain expansion project and the board did not approve payments to any such consultant,” the plea agreement said.
The point, prosecutors contend, was for Calabrese to pay the consultants with Alternatives’ money and get favors from them in return.
“It was an object of the conspiracy that Calabrese abused his position and professional relationship with AA by influencing AA to hire and retain consultants at high fees, which consultants would in turn use those funds to benefit Calabrese and his designees on matters unrelated to AA,” the plea agreement said.
Exactly what Prudoff did for Calabrese — who has pleaded not guilty to the charges leveled against him — in exchange for the consulting fees he received is unclear and has never been spelled out in court documents.
But the plea agreement did specifically note that Vorys, referred to in court documents as Law Firm 1, paid Calabrese and other lawyers through fees collected from clients.
“Law Firm 1 conducted periodic appraisals of its attorneys,” the plea agreement said. “One factor considered during the appraisal was the attorney’s ability to obtain and retain clients.”
Vorys was paid more than $1.6 million in fees beginning in 2001 for work Calabrese and other lawyers with the firm did for the city.
Lorain officials have said that much of the work Vorys attorneys did was for the Community Development Department, which Prudoff led until he was placed on paid leave in September 2009 after city leaders learned he was a target in the corruption investigation.
Prudoff retired a few weeks later.
Since 2009, the FBI and the U.S. Department of Housing and Urban Development’s Office of Inspector General have subpoenaed numerous city files, including documents detailing Community Development Department projects dating to 2003 and work the city has hired Lorain contractor and Prudoff friend Don E. Buchs to do.
Federal investigators have said nothing about what they were looking for in those files or what they found.
Lorain Law Director Pat Riley said Wednesday that he couldn’t provide any insight into the federal investigation either but is reviewing Prudoff’s plea agreement to see what, if any, impact it will have on the city.
“I have to review whether the plea has any bearing on the city’s right to recover any money from third parties,” Riley said.
Prudoff wasn’t alone among the consultants hired by Alternatives at the behest of Calabrese to face criminal charges, according to court records.
Two other consultants, former Lakewood Mayor Anthony Sinagra and former Cuyahoga County employee J. Kevin Kelley, were named in the plea agreement, and both men have entered guilty pleas to the respective charges against them.
Sinagra’s consulting company was paid $190,500 between 2002 and 2007 by Alternatives. Some of the money paid to Wells was funneled through Sinagra’s company, the plea agreement said.
Kelley received $201,473 between 2004 and 2008, while a company run by a relative of Calabrese’s and identified only as Business 43 in court documents was paid $12,950 between 2005 and 2006.
Neither Kelley, who falsely claimed in invoices to be working on the Alternatives project in Lorain, nor Sinagra has been sentenced, and both are cooperating with prosecutors in the corruption investigation.
Prudoff’s plea deal contains no mention of him working with the government, and Ricotta said his client isn’t doing so.
“They had always sought his cooperation, but Mr. Prudoff never had any desire to proffer or testify,” Ricotta said.
And although court records indicate prosecutors are considering another indictment against Calabrese, Prudoff won’t face additional charges stemming from the accusations prosecutors have leveled against him, according to the deal.
The agreement, however, doesn’t preclude other federal agencies or state and local government officials from taking legal action against Prudoff.
Contact Brad Dicken at 329-7147 or email@example.com.