YOUNGSTOWN — The city filed an $834,608 lawsuit against former Finance Director David Bozanich, developer Dominic Marchionda and two of the latter’s companies for participating in a “calculated scheme” to defraud Youngstown in a public corruption case.

The city filed the lawsuit Thursday against Bozanich, Marchionda, U.S. Campus Suites LLC and Erie Terminal Place LLC in Mahoning County Common Pleas Court. Judge Anthony M. D’Apolito is assigned to the case.

Bozanich and Marchionda took criminal plea deals on Aug. 7, 2020, related to their involvement in public corruption.

Bozanich pleaded guilty to one count each of bribery and tampering with records, both felonies, and two misdemeanor counts of unlawful compensation of a public official. Bozanich spent nearly a year in state prison for his crimes.

Marchionda pleaded guilty to four felony county of tampering with records, all occurring on Oct. 6, 2011, when Marchionda admitted he used false invoices to get money from the city for his Erie Terminal Place downtown-housing project to pay bills he owed for his Flats at Wick student-housing complex.

U.S. Campus Suites LLC pleaded guilty to a felony count of receiving stolen property for illegally obtaining money from the city. Criminal charges against Erie Terminal Place LLC were dismissed.

The city received a $100,000 payment on Oct. 17 from the Hartford Fire Insurance Co., Bozanich’s bonding company when he was finance director, as partial payment of the $614,608 it is seeking related to funding given at Bozanich’s behest to Marchionda to develop U.S. Campus Suites.

Bozanich’s tampering with records conviction was for him giving $1.2 million from the city’s water and wastewater funds, divided evenly, to Marchionda if he gave back $1 million to the city’s general fund in December 2009 to buy the property for Madison Avenue fire station, which was subsequently closed. That illegal transaction allowed Bozanich to balance the city’s general fund that year.

The lawsuit states the fire station purchase “was a calculated scheme, facilitated by U.S. Campus Suites and orchestrated by Dominic Marchionda and David Bozanich to illegally transfer money from the city’s water fund and wastewater fund to the city’s general fund in violation of” state law.

Marchionda, who wasn’t convicted in the scheme, got to keep the extra $200,000 from the city grant.

The city also paid $3,220 in closing costs.

The appraised value of the fire station at the time was $411,388, according to the lawsuit.

The lawsuit seeks a total of $614,608 from the two men and two companies: $411,388 for the fire station purchase, $3,220 for the closing costs, $100,000 from the wastewater grant and $100,000 from the water grant.

The $100,000 from Hartford would be deducted from the amount the city is seeking.

The Flats at Wick were sold in September 2022 at a sheriff’s auction for $5.1 million to U.S. Bank National Association, which sued a company owned by Marchionda and his wife, Jacqueline, which defaulted on a $5.5 million loan. It was then sold to a Monroe, New York, company in January 2023 for $4,410,000.

The city is also seeking $220,000 from Marchionda and Erie Terminal Place LLC — $110,000 each for water and wastewater grants given to that project that Marchionda pleaded guilty to creating false invoices to receive.

Erie Terminal Place initially received a $350,000 water grant for waterline improvements and then a supplemental $220,000 grant – half each from water and wastewater – with Marchionda admitting he falsified invoices.

“Erie Terminal Place and Dominic Marchionda misled the city about the completion status of the Erie Terminal project to induce the city to issue the second Erie Terminal grant, which was used for purposes beyond those authorized by the second Erie Terminal grant agreement,” according to the city’s lawsuit.

“In regard to the curious timing of the city’s lawsuit, we intend to defend our company with the greatest respect to the legal process; a process that has already been exhausted against these entities and myself over a decade ago. It is our position that the current filing against our companies is redundant and retaliatory. We will provide more context and comments to the filing in the coming days and intend to counter the one-sided nature of the findings, of which we vehemently disagree and have the necessary documentation to disprove such findings,” Marchionda said in an email Friday.

Bozanich, Marchionda and 10 of Marchionda’s companies – as well as former Youngstown Mayor Charles Sammarone – were indicted Aug. 30, 2018, on 101 criminal counts that accused them of engaging in a pattern of corrupt activity and dozens of other felonies.

The plea deal had Marchionda guilty of four felonies, Bozanich two felonies and two misdemeanors, U.S. Campus Suites one felony, and Rubino Construction Inc. to one felony.

A 2021 “public interest report” by the state auditor’s office of the city’s finances between 2009 and 2015 listed the $834,608 in findings for recovery against Bozanich, Marchionda and the two companies.

As Youngstown’s finance director from Nov. 15, 1993, to Dec. 31, 2017, Bozanich “had the power to recommend the issuance of city grant funds from the city’s water fund and wastewater fund for city economic development projects,” according to the city’s lawsuit.

In addition to the $834,608, the city is seeking costs and interest on the money, the lawsuit seeks to require Bozanich to “forfeit and disgorge any and all compensation he received from the city during the relevant time period pursuant to the faithless servant doctrine in an amount to be determined at trial.”

Mayor Jamael Tito Brown, Law Director Lori Shells Simmons and Nikki Posterli, the mayor’s chief of staff, didn’t respond Thursday to requests from The Vindicator to comment on the lawsuit.