WYSO

Three More Charged With Fraud In Connection To FBI, DOJ Dayton Public Corruption Probe

Oct 29, 2019

Federal law enforcement officials have unsealed additional fraud charges in an ongoing public corruption investigation. The first wave of charges in the far-reaching probe were announced back in April.

On Tuesday, the Federal Bureau of Investigation and the United States Attorney’s office charged three people:

64-year-old Steve Rauch, longtime Miami Valley business owner of companies including Rauch Trucking Company, Steve Rauch Inc., and SRI Inc., that perform demolition, trucking and landfill work; Joyce Cameron, 71, former mayor of Trotwood – who owned, operated and served as president of Green Star Trucking, Inc., a business that hauls construction materials and demolition debris; and her 80-year-old husband and Green Star employee James Cameron.

On Tuesday evening, Dayton Mayor Nan Whaley and Dayton City Manager Shelley Dickstein told reporters they’re still reviewing the feds’ indictments, but take any allegations of fraud seriously.

The city is already working with an outside consulting firm, Green and Green, to independently review its process for awarding contracts, an effort started after the initial indictments were announced last spring.

"No matter what you have in place, the way to stop fraud is to go after it in the way that the U.S. Attorney has done. And so, you're going to have that happen no matter what kind of system is in place. Surely we're going to look and make sure that we have everything in place that we can to prevent fraud," Whaley said.

Officials say the results of the firm's investigation are expected soon.

Dickstein noted the city's steps this year that were designed to prevent potential fraud.

"In August of 2019 we implemented our whistleblower program, which provides an independent, confidential 24-hour mechanism for employees to report complaints or concerns regarding wrongdoings in the organization," Dickstein said.

A procurement process-review task force is also examining the city's contract processes to identify areas of potential fraud risk and offer recommendations to mitigate those risks and strengthen the city's oversight and compliance activity.

Investigators allege in court documents that Rauch and the Camerons conspired in an elaborate scheme to convince government agencies to award and pay out hundreds of thousands of dollars in demolition contracts.

FBI Acting Special Agent in Charge Joseph Deters says more charges could come in the investigation officials have dubbed, “Operation Demolished Integrity.”

“Having a significant number of business people and government officials in one city alleged to be engaged in corruption and criminally charged should serve as a warning sign of a larger problem,” Deters says.

According to the allegations:

"Rauch, with the assistance of Joyce and James Cameron, fraudulently convinced government entities to award and pay out hundreds of thousands of dollars in demolition contracts.

Rauch paid the Camerons a fee – usually either several thousand dollars or credits against debts owed to Rauch – in exchange for using Green Star’s name on contracts.

Green Star was qualified as a Disadvantaged Business and the Camerons allegedly allowed for Rauch to name Green Star on contracts even though it did not perform the work required of a Disadvantaged Business.

In actuality, Rauch’s companies allegedly completed the work and Green Star received a cut of the proceeds. Joyce or James Cameron allegedly signed paperwork fraudulently certifying that Green Star had performed all of the work consistent with the government contracts.

Rauch also allegedly instructed James Cameron to be present at work locations to create the false appearance that Green Star was actually performing work, even though Cameron performed no work on site."

Now, Rauch and the Camerons each face one count of conspiracy to commit mail fraud, and six counts of mail fraud. Each count is punishable by up to 20 years in prison.

U.S. Attorney Benjamin Glassman says investigators are seeking assistance from the public in the ongoing investigation. 

"The point of this investigation is to identify, investigate and root out fraud and corruption in the greater Dayton area," Glassman says.

Officials previously charged former Dayton City Commissioner Joey Williams, former Dayton Human Relations Council’s RoShawn Winburn, former state lawmaker Clayton Luckie and entrepreneur Brian Higgins.

Luckie pleaded guilty in July to mail fraud and Williams pleaded guilty in September to accepting a thing of value in connection with a local government.

Rauch has pleaded not guilty in federal court and remains free on bond.

An employee of Rauch Trucking Company told WYSO Rauch has no comment at this time.