YOUNGSTOWN — The Ohio Supreme Court chief justice appointed W. Wyatt McKay, a retired Trumbull County Common Pleas Court judge, to hear Youngstown’s $834,608 civil lawsuit against ex-city Finance Director David Bozanich, property developer Dominic Marchionda and two of the latter’s companies.

Chief Justice Sharon L. Kennedy’s appointment of McKay, who retired at the end of 2022 after 36 years as a Trumbull common pleas judge, was filed Tuesday. The city’s lawsuit contends the defendants participated in a “calculated scheme” to defraud Youngstown related to a public corruption case. Marchionda and the two companies filed a counterclaim with their attorney, Gregg Rossi, seeking to dismiss the city’s case saying it’s untimely and barred by a previous plea agreement.

All of the Mahoning County Common Pleas Court judges recused themselves Thursday from the city’s lawsuit against Bozanich, Marchionda, U.S. Campus Suites LLC and Erie Terminal Place LLC. John M. Durkin, the court’s administrative judge, signed the recusal journal entry and asked the Supreme Court to assign a visiting judge to the case.

McKay had to retire after 36 years on the Trumbull court bench because of the state’s age-limit law on judges.

McKay gave the city until Jan. 30 to respond to a counterclaim from Marchionda and the two companies and until Feb. 17 to respond to a motion filed by the attorney for Marchionda and the companies to disqualify the city’s legal counsel.

Meanwhile, Hartford Fire Insurance Co., the bonding company for Bozanich filed a motion to intervene in the lawsuit in order to reclaim the $100,000 it paid Youngstown on behalf of the former city official.

The city received the $100,000 payment on Oct. 17 from Hartford related to funding given by city officials at the behest of Bozanich to Marchionda that was intended for the development of the Flats at Wick student-housing complex.

In the motion, attorney Marc Sanchez wrote Hartford, his client, requested Bozanich “reimburse it on multiple occasions” of the $100,000 and “despite these repeated requests, Bozanich has failed and / or refused to reimburse Hartford according to the terms of the indemnity agreement.”

The lawsuit, filed Nov. 21 by the city, accuses Bozanich, Marchionda and the companies of defrauding Youngstown out of $834,608.

Gregg Rossi – who represents Marchionda and the two companies, U.S. Campus Suites LLC and Erie Terminal Place LLC – filed a motion Jan. 2 to dismiss the lawsuit as well as a counterclaim against the city while raising the possibility of the return of $1 million paid by his clients to Youngstown.

Rossi filed a separate motion Jan. 2 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 attorneys and corporate counsel for the two companies.

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

Bozanich hasn’t responded to the city’s lawsuit as of Tuesday.

Marchionda, Bozanich and U.S. Campus Suites LLC all pleaded guilty to felonies after taking plea deals on Aug. 7, 2020.

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 a state prison for his crimes.

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

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 $100,000 from Hartford, Bozanich’s bonding company when he was finance director, as partial payment of the $614,608 it is seeking specifically related to funding given at Bozanich’s behest to Marchionda to develop the Flats at Wick.

The $100,000 from Hartford would be deducted from the amount the city is seeking though the company wants to intervene in this case to get that money from Bozanich.

FIRE STATION

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 $1 million of it to the city’s general fund in December 2009 to buy the property for a Madison Avenue fire station, which was subsequently closed. That 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.

As for the $200,000 from the original $1.2 million grant, Rossi wrote in his Jan. 2 filing 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 with the county auditor valuing it at $46,000 for property tax purposes.

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.”

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.

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. As part of the plea bargain, most of the charges were dismissed.

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.

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 Youngstown’s lawsuit.

In addition to the $834,608, the city is seeking costs and interest on the money, and for 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.”