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Former VA head indicted in county corruption probe

12:49 PM, Jun 19, 2013   |    comments
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CLEVELAND -- William D. Montague, 61, of Brecksville, the former head of the Louis Stokes VA Medical Center, was indicted Wednesday in federal court on charges related to the Cuyahoga County corruption probe.

He was charged with 36 counts, including money laundering, 17 counts of mail fraud, conspiracy to commit mail fraud, bribery of public officials, three counts of disclosing public contract information, one count of performing acts affecting a personal financial interest and multiple other counts.

Montague appeared in federal court at 1:30 p.m. today and the judge set $100,000 as his bond.

Montague was charged with conspiracy to commit honest services mail fraud, bribery, money laundering, multiple counts of wire fraud, mail fraud, disclosing public contract information and other charges.

"As a Veterans Affairs Medical Center Director, William Montague misled staff and misused his position to enrich himself and businesses pursuing contracts with the Veterans Administration," said Stephen D. Anthony, Special Agent in Charge of the Federal Bureau of Investigation's Cleveland Office.

"The arrest of Montague reflects law enforcement's continued dedication to root out corruption at any level."

The Louis Stokes Cleveland VA Medical Center was approximately the fifth-largest in the country, annually serving about 95,000 veterans who lived in 24 counties in Northeast Ohio.

Montague began working for the VA in 1975 and served as director of the Cleveland VA Medical Center from 1995 until his retirement in 2010, according to the indictment.

The VA had been operating medical facilities in both Brecksville and the Wade Park neighborhood in Cleveland. In the early 2000s, the VA began exploring the feasibility of consolidating the facilities into one location, known as the VA Development Project. The combined facility would include a domiciliary, office space and parking, according to the indictment.

The VA selected Business 42 to develop and managed the VA Development Project. Michael Forlani was the sole member of Business 42, and he had multiple other business interests, including as president and part-owner of Doan Pyramid LLC, according to the indictment.

On or about Jan. 1, 2010, Business 66 began operations, having purchased Doan's assets. Business 66 operated out of Doan's former office space and retained many Doan employees, according to the indictment. Montague solicited and accepted gifts, payments and other things of value from Forlani and Business 66, including a consulting contract between Business 66 and House of Montague, a financial services company Montague started in 2008, according to the indictment.

The indictment details numerous instances between 2007 and 2010 in which Montague took actions on behalf of Forlani or others.

Montague retired from the VA on Feb. 3, 2010, about a month after Business 66 began operations. On Feb. 15, 2010, Business 66 issued a check to House of Montague for $2,750, the first of many approximately monthly checks.

On Dec. 29, 2010, Montague became a member of the Business 66 Board of Advisors, according to the indictment. From about Feb. 15, 2010 through May 2012, Business 66 paid House of Montague $156,750, according to the indictment.

In a different scheme, Montague entered into a consulting agreement with a company identified as Business 73, headquartered in Virginia. The company agreed to pay Montague $2,500 a day for a minimum of 24 days, between July 1, 2008 and July 1, 2009, while Montague was still employed by the VA, according to the indictment.

Montague emphasized his ability to access key decision makers in the VA quickly and effectively as one of the reasons he could help Business 73 develop joint ventures and/or expand services provided by the VA. Montague told an official at Business 73 that he had consulted with a VA ethics panel and that he had authorization to do the consulting work as long as he took vacation time to perform the work.

In fact, Montague had no such authorization, according to the indictment.

The charges mostly center around Montague and his working with convicted electrical contractor Michael Forlani.

Back in March, 2011, after retiring from the VA in Cleveland, Montague was made the Dayton VA's acting director.

On April 1, 2013, Forlani, 55, of Gates Mills, who pleaded guilty to charges last year, was sentenced to serve eight years in a federal prison in Alabama.

Forlani is one of the key figures in the bribery and conspiracy charges that put former Cuyahoga County Commissioner Jimmy Dimora behind bars for 28 years and former Cuyahoga County Auditor Frank Russo behind bars for 21 years.

Forlani is the former owner of Bedford Heights-based Doan Pyramid Electric. The bribes he admitted to gave him an unfair advantage when bidding for projects.

Back on May 31, 2013 the FBI and the Criminal Investigations Division of the Department of Veteran Affairs raided Montague's Brecksville home.

Montague was not taken into custody at that time.

Back in 2011, Forlani's charges were related to the consolidation of the VA's Brecksville campus with an enlarged campus in Cleveland's Wade Park neighborhood.

Forlani's companies, including Veterans Development LLC, were the prime developers of the $125 million enlarged VA campus.

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