Brokers indicted in state of Ohio investment scandal
By CONNIE MABIN
June 19, 2006
CLEVELAND (AP) - The statewide investment scandal that has shaken Ohio's Republican-dominated government is widening almost by the week.
Investment brokers Michael Lewis and Daniel O'Neil were indicted Monday on federal charges that they bribed a former top official at the Ohio Bureau of Workers' Compensation with the use of their Florida Keys condo in exchange for state business.
Lewis, 71, of Willoughby, and O'Neil, 54, of Chesterland, both pleaded not guilty Monday before U.S. District Judge David D. Dowd Jr. in Akron, which is in the Cleveland-based federal district.
Lewis and O'Neil managed stock investments for the $15 billion insurance fund for injured workers while working at firms that received hundreds of thousands of dollars in commissions from the agency.
They were the eighth and ninth people charged in a yearlong political scandal in Ohio that has led to ethics charges against Gov. Bob Taft, who pleaded no contest to failing to report gifts.
Prosecutors promised more charges after Terrence Gasper, the bureau's former chief financial officer, pleaded guilty in state and federal court earlier this month to taking kickbacks from brokers and others who wanted to handle the fund's investments. He admitting accepting stays at the condo, money for his son's tuition and other gifts.
In the four-count indictment, Lewis and O'Neil also are accused of committing mail and wire fraud to conceal their relationship with Gasper and of lying to a federal agent about Gasper's involvement with the condo.
William Beyer, an attorney for O'Neil, said his client would fight the charges. "Dan O'Neil is a good and decent man," Beyer said.
Lewis' attorneys, Roger Synenberg and Dominic Coletta, did not immediately return messages.
The indictment accuses Gasper's then girlfriend of signing papers in November 1998 saying she intended to buy the luxury condo and a boat slip for $345,000. Gasper gave the real estate agent a $500 personal check as a down payment, the indictment states.
On Nov. 16, 1998, Lewis and O'Neil took over the purchase, four days after Lewis is to have told the real estate agent that Lewis was Gasper's partner. O'Neil and Lewis each paid $35,000 toward the purchase before closing in January 1999 for $345,000. They later paid condo fees, the indictment states.
But Gasper and his girlfriend stayed regularly at the condo and treated it as their own. Occasionally, Gasper made what the indictment described as a token rental payment to Lewis "in order to make it appear that his stays at Unit E-21 were legitimate."
In exchange, O'Neil and Lewis got favorable treatment from Gasper regarding workers' comp investment business, the indictment says.
Lewis and O'Neil both worked at several companies, including Roney & Co., a Cleveland-area firm that in 1997 was the subject of an internal bureau investigation over allegations it was receiving a disproportionately high share of workers' comp business.
Raymond James & Associates earned more than $530,000 in commissions while the two brokers were there from September 1999 through August 2000, according to bureau records.
Ferris, Baker Watts didn't have previous work with the bureau until Lewis and O'Neil joined it in 2000. The firm subsequently received $525,000 in bureau business.
The scandal began with rare-coin dealer Tom Noe, who is accused of funneling $25,000 to Gasper as a bribe in return for state business.
Besides Taft, Gasper and Noe, four aides to the governor also have been charged.
Noe, a prominent GOP contributor, pleaded guilty May 31 to funneling about $45,000 to President Bush's re-election campaign. He has pleaded not guilty to state charges of stealing more than $1 million from a $50 million investment in rare coins that he handled for the workers' comp bureau.
Gasper could be sentenced to up to 20 years in prison but is likely to get far less in exchange for testifying against others involved in the scandal.
O'Neil and Lewis could get up to 35 years in prison, $1 million in fines and three years' probation if convicted.
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