U.S. Attorney: Moreland Hills man pleads guilty in county corruption probe

2:43 PM, May 18, 2010   |    comments
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The plea is part of the ongoing Cuyahoga County corruption probe that went public on July 28, 2008, when 200 FBI and IRS agents raided the homes and offices of Cuyahoga County officials.

Since then, 18 people have pleaded guilty to charges, one has pleaded not guilty, and one, Thomas J. Greco Jr., is on trial this week.

Schatz was the general legal counsel for the Northeast Ohio Regional Sewer District from 1979 until his retirement in August 2007.

During that time, NEORSD had major sewage tunnel contracts, including the Mill Creek Tunnel contract, Phases 2 and 3.

Schatz admitted that, from in or about 2000, through on or about April 26, 2007, he corruptly solicited and accepted approximately $682,130 from a contractor, identified as Contractor No. 1, who was part of a joint venture working on the Mill Creek Tunnel contracts, Dettelbach said.

Schatz received the payments through an intermediary company, identified only as Client Company No. 1.

Schatz also admitted that, from in or about 2002, through on or about December 15, 2005, he embezzled, stole, and obtained by fraud, NEORSD property by, among other things, depositing checks made payable to NEORSD (including insurance premium returns and NEORSD tenant payments) totaling approximately $166,940, into accounts he controlled using a fraudulent deposit stamp he had obtained for this purpose.

Schatz also admitted that he failed to report income from his private law practice, as well as his bribery and embezzlement income, on his Form 1040 U.S. Individual Income Tax Returns in the amount of $148,213 for 2003; $219,678 for 2004; $185,527 for 2005; $179,929 for 2006; and $88,975 for 2007.

Dettelbach said, "When anyone abuses their position and violates the public trust, it is a very serious matter. When an attorney who is entrusted to uphold the rule of law does so, it calls for vigorous action."

"Today's guilty plea highlights the strength of the federal government's firm resolve to combat corruption in northern Ohio, and the consequences facing public officials who think they can conduct business as usual," said FBI Special Agent in Charge Frank Figliuzzi.

Schatz's sentence will be determined by the court after review of factors unique to this case, including the defendant's prior criminal record, if any, the defendant's role in the offense and the characteristics of the violation.

This case is being prosecuted by Assistant United States Attorneys Justin J. Roberts and Daniel J. Riedl, following an investigation by the Cleveland offices of the Federal Bureau of Investigation and Internal Revenue Service, Criminal Investigation Division.

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