Clarke T. Blizzard faces up to five years in prison and a fine of $250,000. He is expected to assist the inquiry.
FORT MYERS, FLA. - Federal prosecutors have caught up with Clarke T. Blizzard, a onetime star investment marketer, who has long been a target of investigators.
And it took the investment scandal at the Ohio Bureau of Workers' Compensation to rein in Blizzard, who yesterday in federal court in Fort Myers, Fla. pleaded guilty to a felony charge of conspiring to bribe the bureau's former financial chief.
Blizzard, 53, of Florida, remained emotionless throughout the hearing, saying little during the 90-minute proceeding, except telling Judge David Dowd, Jr., of the U.S. District Court in Akron, "I plead guilty."
By entering a guilty plea, Blizzard admitted that he gave about $20,000 in bribes to the bureau's former chief financial officer, Terry Gasper, in exchange for the agency placing hundreds of millions of dollars with firms Blizzard represented between 1998 and 2004. That resulted in at least $2.5 million in fees and commissions for his clients.
Blizzard's bribes included a payment of $9,005 in 2004 for Gasper's son's college tuition and $2,300 in 2002 to Gasper's then-girlfriend, Betsy Ratcliff.
Blizzard became the 13th money manager or public official convicted on charges stemming from the wide-ranging corruption probe that began in April, 2005, after The Blade reported on the bureau's $50 million rare-coin investment with GOP insider Tom Noe.
The convictions include Gasper, Noe, and former Ohio Gov. Bob Taft, who was found guilty on ethics charges.
Like Gasper, Blizzard is expected to cooperate with authorities in the ongoing investigation. Judge Dowd had Blizzard booked with the federal authorities and then released him on $50,000 bond.
Blizzard faces a maximum punishment of five years in prison and a $250,000 fine, but it is more likely he will receive three or four years in prison under federal sentencing guidelines, Judge Dowd said during the proceeding.
Judge Dowd said Blizzard will be sentenced on May 3 in Akron. Yesterday's hearing was held in Fort Myers because Judge Dowd, 78, is on senior status and travels there during the winter, an aide said.
Franklin County Prosecutor Ron O'Brien said yesterday that he expects Blizzard to appear in Franklin County Common Pleas Court before his May 3 sentencing.
Blizzard will be charged there with money-laundering, a third-degree felony that carries a maximum five-year prison sentence, Mr. O'Brien said.
After the hearing, Blizzard refused to comment. His attorneys declined to comment, except to say that the bureau "did very well" with investments that Blizzard pitched to the agency.
Blizzard in 1998 helped convince the bureau to place $550 million with American Express Asset Management, a company he marketed. In June, 2005, amid the scandal, the bureau announced plans to liquidate the hedge fund investments, which the agency said had lost $4.8 million.
Blizzard, who was raised in eastern Canada and played minor league hockey, studied economics and political science at the University of Wisconsin in the mid 1970s.
He emerged in the 1980s and 1990s as a rising star in the investment world, eventually becoming a marketing executive with Shawmut Investment Advisors.
Blizzard, who later worked for Northwinds Marketing, persuaded pension fund trustees and other public fiduciaries into placing billions of dollars with his clients.Blizzard, who convinced the Ohio Police & Fire Pension fund to invest $112.5 million with Shawmut in 1994, has been scrutinized time and again during the past decade.
In 1999, Securities and Exchange Commission alleged that Blizzard assisted his former employer in fraudulently concealing that client commission dollars were used to obtain client referrals. An SEC administrative law judge ordered Blizzard to pay $650,000 in fines, but the conviction was overturned on appeal.
In 2001, a jury acquitted Blizzard on charges he made false statements to authorities investigating a pension fund kickback scheme.
In his 1997 divorce case in Florida, Blizzard reported that he made more than $300,000 per year. But by 1999, after a divorce and the costs of litigation, he said in a sworn affidavit with the Securities and Exchange Commission that his "assets ... were essentially zero" and he was "living paycheck to paycheck.
"He was one that was difficult to pin down," Ohio Inspector General Tom Charles said.
He credited Benita Pearson, an assistant U.S. attorney in the Northern District of Ohio, for "persistent work" with state investigators focusing on the bureau's investment practices.
"He's been around here with Police & Fire, and his name has come up before. Benita is a bulldog. [Blizzard] saw the writing on the wall - indictment and go to trial or face even tougher stuff," Mr. Charles said.
Greg White, U.S. attorney for the Northern District of Ohio, said the Gasper plea agreement - which required him to cooperate with authorities - led to Blizzard's conviction.
Gasper pleaded guilty in June, 2006, to taking bribes in exchange for bureau investment business.
"We corroborated his statements by some good grunt work on documentation. And once that is nailed down, we were bargaining from a position of strength, and that is where we like to be," Mr. White said.
Mr. White said Blizzard's guilty plea, which is tied to his cooperation with authorities, "bodes well for further investigation."
He said he could not elaborate because of the ongoing probe.
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