Developer Faces $900K Loss on Revitalization Endeavor at JACK Cleveland
A real estate developer in Cleveland, Ohio spent $885,000 on craps and blackjack at the JACK Cleveland Casino, but the money wasn't his own. It was supposed to be used for rebuilding a local market in Greenville district.
A jury in the federal court of Cleveland found Arthur Fayne, 61, guilty of nine counts of wire fraud, as reported by Cleveland.com.
Fayne was the owner of Business Development Concepts, which undertook various construction projects in the city.
He was chosen by the nonprofit organization Northeast Ohio Neighborhood Health Services (NEON) to oversee a project to revive the East Side Market in Greenville, which closed in 2007 and left the neighborhood with limited access to fresh food.
Spent $1M on Gambling
However, $760,000 of the money Fayne took to the casino was supposed to pay the project's general contractor, AM Higley.
According to federal prosecutors, Frayne concealed the invoices he received from AM Higley and submitted his own invoices to NEON seeking funds he claimed were for paying AM Higley. But he diverted more than $750,000 of these funds to his personal use.
Another $126,000 meant for audio-visual contractor Crescent Digital also found its way to the casino, prosecutors claimed.
Fayne reportedly lost more than $1 million at the JACK Cleveland Casino and another casino while visiting New Orleans during the project, according to court documents.
Despite losing public funds, no actual public money was embezzled—just the funds sent by NEON to pay the contractors.
Fayne's defense lawyer, Myron Wilson, argued that his client's crime was simply being a messy bookkeeper who mixed personal and business funds. And in the end, everyone who was owed money received payment.
Yet, federal prosecutors presented evidence of Fayne's concealed invoices and submitting his own to NEON.
Friends Forever?
Despite the outcome, NEON President and CEO Willie Austin and Crescent Digital President Mike Hines both testified that they still consider Fayne a friend and even work with him. Austin stated that he and Fayne still collaborate.
Wilson speculated that Fayne's gambling habits might not have impressed the jury.
"Some people have a moral issue with gambling, so that makes it more difficult," said Wilson to Cleveland.com. "He has given a lot to the community, to underprivileged areas, and to kids. He wants to help people. He's done phenomenal work."
Yet, Wilson affirmed, "anytime you don't agree with a verdict, you still respect the process."
Fayne refused to accept a plea deal that would have sent him to prison for two years. He now faces the possibility of up to six years in jail.
Wilson intends to file an appeal against the verdict.
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Source: www.casino.org
