Two More Indicted for Conspiracy Related to Cuyahoga Heights School District
|U.S. Attorney’s Office April 11, 2013|
A five-count indictment was filed charging David Donadeo, age 39, formerly of Broadview Heights, Ohio, and Dennis Boyles, age 39, of Garfield Heights, Ohio, with conspiracy to commit mail fraud and conspiracy to commit money laundering, said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio.
Boyles was also charged with two counts of tax evasion and one count of making or subscribing a false tax return.
Joseph Palazzo (who was previously charged, see Case No. 1:13cr167, United States District Court for the Northern District of Ohio) during the period in question, was employed by the Cuyahoga Heights School District (the District) as its information technology (IT) director. Palazzo was responsible for managing the District’s IT department, which included purchasing hardware and software and making other IT expenditures to benefit the District and its students, according to the indictment.
Palazzo, Donadeo, Boyles, and others devised a scheme to divert millions of dollars of District funds to their own personal use. As a result of the conduct of Palazzo, Donadeo, Boyles, and others, the District was defrauded and sustained a total loss of at least $3,333,448, according to the indictment.
This scheme involved Palazzo submitting to the District for payment false invoices that purported to be for IT-related goods and services purchased from legitimate companies by the District’s IT department to benefit the District. Palazzo represented that the invoices he submitted were legitimate, and he approved the false invoices himself or forged the signature of another in the approval section, according to the indictment.
However, in truth and in fact, these invoices were for services never performed, fictitious software and hardware, and software and hardware never received or already purchased by the District from another source. The companies named on the invoices did not supply such goods to or perform such services for the District and were nothing more than “shells,” according to the indictment.
Relying on these invoices, the District issued checks to these shell vendor corporations, which were established and owned by Donadeo, Boyles, and another person working with Palazzo to defraud the District. Donadeo, Boyles, and the other shell vendor corporation owner kept approximately half of the stolen money themselves and funneled the remainder of the money back to Palazzo for his personal use, according to the indictment.
In addition to participating in the foregoing scheme to defraud the District, Boyles failed to report his share of the money that he received from the scheme on his tax returns for the tax years 2008, 2009, and 2010. As a result, he failed to pay a total of $30,064 in taxes that was due and owing for those years, according to the indictment.
This case was investigated by special agents of the Internal Revenue Service-Criminal Investigation and the Federal Bureau of Investigation, both located in Cleveland, with the assistance of the State of Ohio Auditor’s Office, the Cuyahoga County Sheriff’s Office, and the United States Postal Inspection Service.
If convicted, the defendants’ sentences will be determined by the court after review of factors unique to this case, including the defendants’ prior criminal record, if any, the defendants’ roles in the offense, and the characteristics of the violation. In all cases, the sentence will not exceed the statutory maximum and in most cases it will be less than the maximum.
The case is being prosecuted by Assistant United States Attorney Rebecca Lutzko, Special Assistant United States Attorney Perry Mastrocola, and Assistant United States Attorney James L. Morford.
An indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.