Former workers' comp official gets over 5 years in prison

5/9/2007

AKRON Terrence Gasper, who used his job as chief financial officer of the Ohio Bureau of Workers Compensation to steer millions of dollars in investment funds to people in exchange for use of a Florida Keys condominium, money, and dozens of other gifts, was sentenced today to five years and four months in prison.

Moments before his sentencing, Gasper told U.S. District Court Judge David Dowd that he wanted bureau employees to understand there was a small group of political appointees in senior management during his tenure from 1995 to 2004 who called the shots at the agency.

Their agenda was totally political in nature, often to the detriment of what the bureau was trying to do. It was very frustrating for those of us who were more professionally-inclined, said Gasper, who didn t identify those in the group.

He also told Judge Dowd that he actively opposed retaining certain investment managers.

I was compelled to retain them by my superiors. I did not pursue or intend to support their participation at the bureau, Gasper said. He declined to comment after his sentencing.

Gasper s statement did not answer the question of whether other high-ranking officials knew about his dealings.

Gasper pleaded guilty in June, 2006 to a federal racketeering charge for accepting use of a Florida Keys condo from brokers Michael W. Lewis and Daniel P. O Neil, $25,000 from Republican power broker and coin dealer Tom Noe, and $20,000 from marketer Clarke T. Blizzard all of whom did multimillion-dollar business with the agency in charge of protecting injured workers.

Gasper s sentencing was delayed until today, as he cooperated with authorities in the investigation that has so far netted the convictions of 16 public officials and money managers.

Mr. Gasper is the highest-ranking public official yet to be convicted in this extensive scheme of public corruption that has invaded the Bureau of Workers Compensation, said assistant U.S. Attorney Benita Pearson. He violated the trust of the people of Ohio, shaming family and friends as well.

Gasper, who was hired at the bureau when George Voinovich was governor, could have received 20 years in prison on the federal charge. Prosecutors agreed to recommend a prison sentence from five years and 10 months, to seven years and three months. Judge Dowd lowered that range, citing Gasper s cooperation with investigators.

That cooperation will continue even with Gasper in a federal prison because the investigation into the bureau s investment practices continues, said assistant U.S. Attorney Benita Pearson.

Based on his faithful cooperation, we have no serious doubt we will get that, Ms. Pearson told Judge Dowd.

Mr. Gasper, who was forced to resign in 2004 from the bureau, made key decisions regarding both the failed $50 million Noe rare-coin investment and the bureau s offshore hedge fund managed by Mark D. Lay of Pittsburgh-based MDL Capital Management, which lost $215 million.

Noe, who is serving a 27-month sentence in federal prison for illegally laundering thousands of dollars into President Bush s re-election campaign through friends and colleagues, was sentenced last year to 18 years in state prison for stealing millions of dollars from the rare-coin funds he managed for the bureau.

Documents released in 2005 showed that Noe submitted a proposal to the bureau in 1997 to invest in a rare-coin fund almost nine months before the bureau requested proposals from firms to invest in stocks, bonds, private equity, and other financial instruments. The bureau said two proposals from Noe were found in May, 2005, in the office that Gasper had used.

E-mails show that October, 2004, Jim Conrad, the bureau s administrator-CEO misled the bureau s politically appointed oversight board and the agency s employees about the real reasons for the departure of Gasper. Mr. Conrad told oversight members and agency employees that Gasper left for health reasons, when actually he had been given a choice to resign or be fired after failing to tell Mr. Conrad that he had approved a reallocation of $100 million to MDL.

The bureau confirmed in 2005 that Mr. Conrad, the bureau s CEO-administrator who resigned in the wake of the controversy over Noe s rare-coin investment, had given Mr. Gasper power of attorney, enabling him to sign investment contracts.

Federal prosecutors said Gasper planned to retire in October, 2005, with a full pension after 10 years with the bureau and anticipated living part-time in the Florida condo that Mr. O Neil and Mr. Lewis purchased.

He also had planned to collect a salary from another broker not yet named or charged who previously made cash payments to Gasper in exchange for favors he arranged through the bureau s investment department, investigators said.

At the same time, Gasper would work pool side as a consultant for the unnamed and uncharged broker and Blizzard, an investment marketer, who was sentenced last week to three years in federal prison for bribing Gasper.

Gasper, who joined the bureau in 1995 after leaving a high-ranking post at Columbus-based Borden Corp., testified for the prosecution at the trial of Mr. O Neil and Mr. Lewis, who were charged with bribing Gasper in exchange for bureau investment business

A jury last November acquitted the two men after a trial in which Gasper acknowledged he had given conflicting statements to investigators.

Gasper, who has lived in the Columbus suburb of Worthington, would like to serve his prison term in Morgantown, W. Va., his attorneys said. Judge Dowd said he didn t know if the federal Bureau of Prisons would approve that request, saying that Gasper can t be sent to the same prison as Blizzard.

Gasper appeared relaxed as he walked into the courtroom yesterday, clutching a briefcase stuffed with documents. He shook hands with Ms. Pearson. With his shock of white hair and blue suit with matching tie, Gasper closely resembled the high-flying chief financial officer who wowed bureau employees with his ability to explain complex financial matters.

The sentencing was delayed for about half an hour after Judge Dowd said he would have to delay a decision for 90 days unless prosecutors and Gasper s attorneys reached agreement on restitution.

Federal prosecutors requested Judge Dowd to order Gasper to pay restitution of more than $14 million in addition to his prison sentence, saying Gasper should be liable for the money that Noe was convicted of stealing from the rare coin funds. Noe has been ordered to make restitution.

Also, a fine or restitution should cover the $345,000 Florida condo that Gasper used that Mr. O Neil and Mr. Lewis purchased, the $20,405 that marketer Clarke Blizzard gave Gasper in exchange for bureau business, and the $25,000 investment that Gasper received from Noe that was in the name of Gasper s former girlfriend, Betsy Ratcliff, according to Ms. Pearson.

Gasper s attorneys opposed the prosecutors request for restitution, saying it would be a 20-year judgment against a man who is likely to never be employed again, certainly not in the capacity he was before this ordeal.

It was never foreseeable to Mr. Gasper that Mr. Noe would steal the funds that were entrusted to him to invest; that was not foreseeable by Mr. Gasper and that conduct should not be attributable to Mr. Gasper, said Gasper s attorney, James Gilbert.

Half an hour after Judge Dowd called a recession, prosecutors and Gasper s attorneys reached an agreement.

Gasper was ordered to pay a $60,405 fine in lieu of restituition: $15,000 for the use of the condo that Mr. O Neil and Mr. Lewis purchased, $20,405 for the amount that Blizzard paid Gasper, and $25,000 for the investment that Noe gave Gasper in the name of his girlfriend, Ms. Ratcliff.

Judge Dowd told Gasper that part of the money he earns in prison would be used to pay the fine, in addition to any pension benefits and Social Security payments.

In his remarks to Judge Dowd, Gasper acknowledged he had committed crimes.

If I could turn back the clock and change those bone headed decisions I made, I certainly would. Maybe part of my problems and it is not an excuse was my long experience in the private sector and going to the public sector. In the private sector, the activities I participated in would not have a criminal aspect to them, he said.

Gasper said he never solicited or requested anything from anyone and added: I have been the most forthcoming and honest of all of the individuals who to my knowledge have been involved in working with the government.

Gasper, however, has been the target of investigations before the Coingate scandal that led to his downfall.

In 1997, bureau internal investigators probed Gasper had helped steer bond business to a Cleveland bank on behalf of the late Paul Mifsud, a former chief of staff of then-Gov. George Voinovich.

Investigators noted numerous calls between Mr. Gasper and Mr. Mifsud, who was seeking consulting work from the bank. The bureau then gave the bank nearly a million in business.

Mr. Mifsud, who became a high-powered Statehouse lobbyist after serving six months in a work-release center for accepting a sweetheart deal on his future wife s home in Union County, died in 2000 after a battle with lung cancer.

In 1996, Mr. Mifsud and Mr. Gasper successfully urged Republican legislators to add the bureau to a bill that gave the state pension systems greater flexibility in how they could invest their funds. Mr. Voinovich signed the bill into law.

Later today, Gasper is scheduled to be sentenced in Franklin County Common Pleas Court on a felony money-laundering charge for accepting the $25,000 from Noe; and a misdemeanor charge of failing to disclose sources of income, gifts, travel, meals, entertainment, and gratuities on his annual ethics statements.

Last year, Franklin County Prosecutor Ron O Brien said Gasper accepted thousands of dollars in gifts, meals, sporting tickets, and other gratuities from substantial dozens of other BWC vendors.

Gasper both asked for and was given the gratuities on at least 150 instances, Mr. O Brien said.

A former associate of Noe said the former coin dealer had talked about how he would ship fresh fish from the Florida Keys to Gasper.

Trial records show that between October, 2001, and January, 2004, Noe charged at least 18 shipments of fish from Islamorada Fish Co. on his American Express card, often with multiple charges on single days, especially close to Christmas.

Noe also charged at least 18 meals totaling about $1,300 from 1999 through 2004 at Rigsby s, a restaurant in Columbus trendy Short North area, which Gasper often patronized.

Contact James Drew at:jdrew@theblade.comor 614-221-0496.

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