Wednesday, December 5, 2001
The contracts were for projects in Mahoning and Trumbull counties.
By PATRICIA MEADE
VINDICATOR CRIME REPORTER
CLEVELAND -- A Youngstown woman has been charged with fraudulently using her Tone Crack Seal & amp; Supply to obtain minority paving contracts and then passing them on to a contractor who has admitted bribing U.S. Rep. James A. Traficant Jr.
The indictment handed up Tuesday by a federal grand jury charges Renee Smith, 39, with the three counts of mail fraud and one count of conspiracy to commit mail fraud. Smith told The Vindicator in the summer that she no longer owns Tone Crack.
Richard H. Blake, an assistant U.S. attorney, said Tuesday that the investigation continues. Smith's case has been assigned to U.S. District Judge Lesley Brooks Wells, who will preside over Traficant's racketeering trial in February.
Between January 1995 and December 1998, Smith and James R. Sabatine of Canfield devised a scheme to fraudulently obtain paving contracts that were set aside for minority businesses in Ohio, the government said. At the time, Sabatine owned Hardrives Paving and Construction Inc. of Mineral Ridge.
Smith and Sabatine submitted false certifications to make it look like Tone Crack would do the bulk of the work when, in fact, Hardrives would.
The work "passed through" Tone Crack, and Hardrives received most of the money allotted, more than $515,000 for four contracts, the government said.
Guilty plea: In August, Sabatine pleaded guilty to, among other things, his part in the minority contract scheme and to paying Traficant a $2,400 bribe in August 1998. Sabatine, who liquidated Hardrives earlier this year, wanted to secure a rail line near his Youngstown asphalt plant and paid Traficant for whatever influence he could wield to make it happen.
Sabatine, who faces a 10- to 16-month sentence, is among three local businessmen expected to testify for the government at the trial of the ninth-term congressman.
Two former Hardrives employees, Edward Pannutti of Lowellville and Christ Minerd of Campbell, have pleaded guilty to participating in a scheme to submit fraudulent invoices for asphalt not used.
Pannutti pleaded guilty in September and Minerd pleaded guilty Tuesday. Sentencing dates have not been set.
Smith serves as clerical secretary at the Laborers International Union of North America Local 125 on Market Street. She could not be reached.
Allegation: The government alleges the mail fraud occurred when Smith and Sabatine knew the U.S. Postal Service was used to deliver documents related to the scheme to defraud the Ohio Public Works Commission, which, at the time, required that 5 percent of all contracts let be set aside for minority businesses.
They obtained road contracts in Mahoning and Trumbull counties by submitting -- through the mail -- false documentation to the OPWC, Struthers, Goshen, Champion and Kinsman townships, the government said.
The government listed the four projects:
* Airport Road (Champion) -- the minority company received $128,725 and paid Hardrives $119,720.
* State Street (Struthers) -- the minority company received $128,546 and paid Hardrives $110,230.
* Smith-Goshen Road (Goshen) -- the minority company received $135,370 and paid Hardrives $129,718.
* Delin Thomas Road (Kinsman) -- the minority company received $204,221 and paid Hardrives $155,407.
Struthers project: At the time of the 1995 State Street paving contract awarded to Tone Crack, Smith worked at the union hall with Struthers Councilman Robert D. Carcelli, D-at large. He has since retired from the union, where he served as secretary-treasurer.
The Vindicator reported in early March that the FBI questioned Struthers officials about the State Street contract. Agents asked officials about any influence Traficant tried to use on them to get contracts for certain companies.
When interviewed by the newspaper in March, Smith acknowledged that she had testified before a federal grand jury. Questions, she said, were not limited to the State Street resurfacing project, but she declined to elaborate.
Carcelli said then that he had not been questioned by the FBI and had nothing to do with getting Smith the contract. He explained that city council merely authorizes the board of control to put out bids.
meade@vindy.com