YOUNGSTOWN — The attorney for property developer Dominic Marchionda and two of his companies being sued for $834,608 by Youngstown in what the city describes as a “calculated scheme” to defraud it asked the lawsuit be dismissed because it’s untimely and barred by a previous plea agreement.

Gregg Rossi, the attorney defending Marchionda and the two companies, also filed a counterclaim against the city in Mahoning County Common Pleas Court and raised the possibility of the return of $1 million paid from Youngstown to his clients.

The city filed the lawsuit Nov. 21 against Marchionda, U.S. Campus Suites LLC and Erie Terminal Place LLC as well as former city Finance Director David Bozanich for their involvement in a public corruption case. Marchionda, Bozanich and U.S. Campus Suites LLC all pleaded guilty to felonies after taking plea deals on Aug. 7, 2020.

A judge hasn’t been assigned to the case after Anthony D’Apolito, the son of city Deputy Law Director Lou D’Apolito, recused himself Nov. 26.

Rossi wrote in his Thursday response that the city first became aware of one issue it raised in the lawsuit in a state audit issued Dec. 20, 2012, and the other in an audit filed a year later – and chose to do nothing about either.

The city “failed to commence actions within the applicable statute of limitations,” Rossi wrote.

A 2021 “public interest report” by the state auditor’s office of the city’s finances between 2009 and 2015 listed the $834,068 in findings for recovery against Bozanich, Marchionda and the two companies.

Marchionda pleaded guilty to four felony counts of tampering with records, all occurring on Oct. 6, 2011, when he 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.

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.

Bozanich hadn’t responded to the lawsuit as of Friday.

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 it is seeking related to funding given at Bozanich’s behest to Marchionda to develop the Flats at Wick.

Bozanich’s conviction for tampering with records was for him giving $1.2 million from the city’s water and wastewater funds, divided evenly, to Marchionda if the developer 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 that 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 city’s 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 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.

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 $4.41 million.

Rossi wrote in his filing that based on the Aug. 7, 2020, plea agreement with his clients, the city is barred from seeking money from them and the deal included the state acknowledging “there is no restitution due and owing from defendants” other than a 2011 state loan.

Rossi wrote Youngstown “incurred no financial harm as the city received the $1 million” for the fire station and “has refused to repay the water and wastewater funds as ordered by the Ohio auditor of state.”

As for the $200,000 from the original $1.2 million grant, Rossi wrote that more than that amount was used for water and wastewater work related to the student-housing project.

The fire station, Rossi wrote, was deemed as surplus property by the city “with no value and no use” so the monetary recovery claim “is unfounded.”

If U.S. Campus Suites LLC is liable for the value of the fire station, Rossi wrote the fair market value is zero and the county auditor has it valued at $46,000 for property tax purposes.

Also, if it’s determined that the lawsuit is not barred by the statute of limitation, Rossi wrote U.S. Campus Suites LLC seeks the $1 million “in grant money improperly received by the city of Youngstown as a result of the transaction.”

Erie Terminal Place LLC filed a lawsuit May 2 in common pleas court against Youngstown and two contractors hired by the city contending work done to the nearby 20 Federal Place building caused $89,000 in damage to the downtown housing building.

Rossi filed a separate motion Thursday seeking to disqualify the city’s legal counsel, who are attorneys with the Roetzel & Andress law firm. Roetzel & Andress acquired the law firm of Brouse McDowell with two partners from the latter firm – Timothy Reardon and Ed Smith – employed in 2022 as Marchionda’s personal attorney and corporate counsel for the two companies.

The attorneys, Rossi wrote, obtained confidential information regarding the finances of Marchionda and the companies.

Rossi requested a hearing on the matter.