Former Toledo mayoral candidate stands trial in fraud case

12/4/2017

James Moody, former Toledo mayoral candidate and local Realtor, with attorney Catherine Killam, arrives at U.S. District Court for his arraignment Monday, February 8, 2016, in Toledo.

The Blade/Andy Morrison
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A jury in U.S. District Court began hearing testimony Monday in the trial of Toledo realtor and one-time mayoral candidate James D. Moody and two others accused of conspiring to defraud Lucas County Job and Family Services by spending federal grant money on personal expenses.

Attorneys for all three co-defendants said in opening statements that their clients had no knowledge of the misspending but only knew they were paid by Daniel E. Morris, founder and general manager of Business Rehabilitation Informed Decisions Guiding Employment Strategies, also known as BRIDGES.

Victoria Hawkins, 30, and Angela Bowser, 46, were employees of BRIDGES, while Mr. Moody, 56, provided the start-up money for the for-profit company, which was under contract with Lucas County to provide job training and job placement for low-income residents.

“While Jim was the sole shareholder, he put his trust in Dan,” Catherine Killam, attorney for Mr. Moody, told the jury.

Morris, 68, of Maumee pleaded guilty Nov. 1 to aggravated identity theft, conspiracy to commit program fraud and mail fraud, conspiracy to launder money, and failing to pay withheld payroll taxes.

Noah Hood, an assistant U.S. attorney, told the jury that Morris and the three co-defendants used money intended to help residents on public assistance get jobs and spent it on real estate and cars. The activity occurred, he said, from 2004 until April, 2015 when BRIDGES' government contracts were terminated.

Mr. Hood said those contracts “explicitly stated that BRIDGES would be compensated for its actual cost of operating this program.” And actual cost, he said, meant salaries for legitimate employees, mileage, and other direct expenses of providing job services.

What actual cost didn't include, Mr. Hood said, was profits, dividends, salaries for people who didn't actually work there, houses, and cars. He said Morris had “ghost employees” on the payroll — including Mr. Moody's wife — that he inflated transportation costs and created false records.

Ms. Killam maintained that Mr. Moody was paid dividends from BRIDGES as a return on his investment and that at one point was put on payroll so he could receive health insurance and the company could receive a tax savings. She said that when he ran for mayor in 2009, his payroll checks were re-directed to his wife so that he “would not be associated with an entitlement program.”

While that may not have been proper, she said, that conduct is not the basis for the charges.

Jeffrey Nunnari, who represents Ms. Hawkins, said Morris was in love with Ms. Hawkins, a single mother who at first was a client of BRIDGES and later an employee.

“He lavished her with money,” Mr. Nunnari said.

Morris at first moved her into a trailer but later bought her a house and then a larger home. He also bought her a car.

“She did not embezzle, steal, or obtain by fraud,” Mr. Nunnari said. “She took what was given to her.”

Donna Grill, attorney for Ms. Bowser, said her client worked for BRIDGES as a social worker and was focused on clients, not on the business or its finances. Morris was in charge of those areas, she said.

“And the thing about Dan was, he actually enjoyed a good reputation in the community. People looked up to him,” Ms. Grill said. “People thought he was generous, and he was generous.”

Morris, she said, helped Ms. Bowser buy a house and a car.

“Dan was giving with this hand and stealing from the county with this hand,” Ms. Grill said.

Morris is expected to testify this week at the trial, which is before Judge Jack Zouhary.

Contact Jennifer Feehan at: jfeehan@theblade.com or 419-213-2134.