Loading…
Monday, December 22, 2014
Current Weather
Loading Current Weather....
Published: Tuesday, 10/29/2013

DEALS GONE BAD

Firm faces legal action after questions raised

Ohio agency says Cleveland’s Attevo Inc. defaulted on a $1.1M loan

BY KRIS TURNER
BLADE BUSINESS WRITER

For the second time in a month, the Ohio Development Services Agency is taking legal action against a company after questions were raised by The Blade about financial and legal issues at the firm.

On Friday, the agency declared that Cleveland’s Attevo Inc. defaulted on a $1.1 million loan the firm received in 2009. Development officials also asked the state attorney general to begin collection proceedings. Attevo, an information technology company, has not made a loan payment since September, 2012, state documents show.

State officials were asked by the newspaper about millions owed by Attevo and its owner, C. David Snyder, to the Internal Revenue Service and two state agencies.

“This has been a process for a while,” said Lyn Tolan, deputy director of policy and communications for the Development Services Agency, part of the administration of Republican Gov. John Kasich.

RELATED ARTICLE: Many jobs state says it creates don't exist

A Blade investigation into how Ohio awards and tracks taxpayer-funded loans and grants revealed the state awarded tens of millions of dollars to firms it knew little about. In Attevo’s case, state documents did not list any problems at the firm or with Mr. Snyder.

A search of court records filed from 2003 to 2008, however, revealed lawsuits and liens against Mr. Snyder in the amount of $351,403, none of which was recorded on state documents. Mr. Snyder owed money to a landscaper, Cleveland’s ABC Bail Bonds, and a firm for which he provided a personal financial guarantee, court documents state.

Mr. Snyder signed a $165,000 personal guarantee as part of Attevo’s $1.1 million state loan, which represents 15 percent of the funding.

Ms. Tolan said the state was aware of some legal action against Mr. Snyder before granting Attevo its loan. She would not elaborate on what the state knew and said the information is proprietary.

Another of Mr. Snyder’s firm’s, Ruralogic Inc., received state incentives while Attevo owed $2.9 million to Ohio agencies and the IRS. Those issues also are not recorded on state documents.

Earlier this month, the Development Services Agency took legal action against Toledo’s Buckeye Silicon just four days after The Blade asked agency officials if they were aware of an international investigation into its chairman. And the state only looked into problems at Perrysburg's Willard & Kelsey Solar Group after articles revealed the firm spent funds to attend sporting events and its executives received more than $5 million in compensation during the last five years.

The articles also included communications of the former chief executive officer that stated the company committed fraud with its state loan. Ohio Attorney General Mike DeWine is suing Willard & Kelsey and accused the firm of fraud.

Although the state has little idea whether companies create jobs and its records are rife with errors, the state’s leadership probably would be reluctant to make the process for vetting and tracking taxpayer funding more stringent, said Rep. Mike Sheehy (D., Oregon).

“There are probably people in state government that would find that repugnant and say it would retard or restrict businesses from flourishing in the state of Ohio,” he said. “It’s absolutely not true. What I’d be interested in doing is seeing that people are not conning the taxpayers out of money.”



Guidelines: Please keep your comments smart and civil. Don't attack other readers personally, and keep your language decent. If a comment violates these standards or our privacy statement or visitor's agreement, click the "X" in the upper right corner of the comment box to report abuse. To post comments, you must be a Facebook member. To find out more, please visit the FAQ.

Related stories









Poll