Dayton corruption investigation: Former State Rep. Clayton Luckie sentenced to prison for mail fraud

Former state Rep. Clayton Luckie, 56, of Dayton, was sentenced to prison Friday after U.S. District Court Judge Thomas M. Rose rejected a probation recommendation from the U.S. attorney and the probation department.

Luckie in July pleaded guilty to one count of mail fraud in a scheme to defraud the city of Dayton’s disadvantaged business program. He was sentenced to four months in prison followed by three years of supervised release, with the first four months served in home detention. He faced a maximum sentence of 20 years in prison.

“This is the kind of activity that the community needs protection from,” Rose said. “A community cannot tolerate an individual that takes advantage of programs that are set for the purposes of good. And this court will not permit such to occur without punishment sufficient to meet the goals of sentencing.”

“These violations not only are illegal, they reflect not only upon you, it reflects upon governmental units, it reflects upon individual office holders, it reflects upon this community,” Rose said. “People don’t realize the effect of even an appearance of impropriety can be so damaging.”

RELATED: City investigating after corruption charges allege contracting fraud in Dayton

Under his plea agreement Luckie cannot appeal Rose’s sentence, which also included 100 hours of community service. He must report to go to prison within approximately 45 days and could serve his term in one of the area county jails that have agreements to house federal prisoners who are sentenced to less than six months. That decision will be made by U.S. prison officials.

Luckie’s attorney Aaron Durden said the sentence came as a shock to Luckie, who had argued for probation, saying his daughter and mother need him and that he wants to volunteer in the community to help the elderly. Luckie said when he was released from prison in 2016 after a three-year sentence for convictions related to misuse of campaign funds he had started a business and taken a “shortcut” that he apologized for.

Luckie, a Dayton Democrat who served 10 years on the Dayton Public Schools board and seven years in the Ohio House, owns Kierston Olivia LLC, which provides storage services.

Luckie was one of four Dayton men whose federal indictments were unsealed April 30 after a lengthy investigation by the FBI. In October the indictment of an additional three individuals was announced.

Luckie was originally indicted on two fourth-degree felony counts, one for mail fraud and the other for wire fraud. In July he pleaded guilty to one count of mail fraud.

U.S. Assistant Attorney Brent Tabacchi said a prison sentence for the first conviction in that ongoing investigation sends a message.

“Generally cases involving white collar crime, economic crime, these are cases where the conduct is usually very well thought out, it’s usually deliberate,” Tabacchi said outside court after sentencing. “And if you have conduct like that where people have multiple opportunities along the way to turn back, where you are abusing public programs or you are abusing the public trust, the court sent a message today that it’s not going to be tolerated here in Dayton.”

He said the seven indictments “arose out of a common investigation” and there are common witnesses, but “Mr. Luckie’s conduct is of a different stripe than that of some of the other defendants and the allegations against them.”

Speaking outside court Durden said, “It so happens, that common witnesses had a lot to say about a lot of people. And as a throw in, ‘Oh by the way Mr. Luckie did this.’ And that’s why we are here. It is disassociated with the other case. That’s why he and I agreed, ‘Let’s close the door on our issues and not continue to delay because the community believes it’s all associated.’”

Durden said Luckie will not be a cooperating witness in the other cases because he knows nothing about them.

When he pleaded guilty Luckie admitted he received $2,000 in a scheme to defraud the city of Dayton by using its disadvantaged business program to help a non-disadvantaged demolition contractor fraudulently complete city contracts between June 2016 and January 2017, according to court documents.

RELATED: Here’s how the feds say Clayton Luckie participated in a fraud for $2K

According to court documents Luckie “engaged in a series of conversations with a local demolition company” about its “efforts to fraudulently complete certain Dayton contracts that had participation requirements for disadvantaged businesses,” according to the statement of facts submitted with Luckie’s plea. That company is identified only as “Corporation B.”

Luckie had an affiliation with another company — identified only as Corporation A in court documents — which was not in the demolition or construction industry. He used that company’s name to make it appear that a disadvantaged business had done demolition and debris removal when that had actually been done by Corporation B, according to the statement of facts.

Luckie created fake invoices and ordered large magnetic signs bearing Corporation A’s name on them to place on Corporation B’s trucks at job sites, the documents say. Those signs arrived through the mail or commercial interstate carrier in August 2016.

RELATED: City investigating after corruption charges allege contracting fraud in Dayton

In a statement to Rose after sentencing, Luckie said, “I want you to understand that I do regret the actions that I have done. I do understand the severity of those actions.”

“I’m not going to try to bring back the whole case but when I met this individual his trucks were raggedy,” said Luckie. “And I thought that we could help each other. It was not seeking out anything. It was right in my neighborhood. He talked to me and things like that.”

Rose said that Luckie had entered knowingly into fraudulent activity just months after being released from prison.

“I understand also that if there is something that is going to register it should have registered after three years of incarceration and whatever registered should have lasted longer than 3 months.” Rose said. “So I’m concerned not only about your lack of appreciation for the seriousness of what you have done, but also for your lack of respect for the law.”

RELATED: Former Dayton lawmaker Clayton Luckie set to get out of prison

In his memo seeking a sentence of probation Durden said the mail fraud Luckie pleaded guilty to “appears to be an isolated event since no further criminality is known” and that his criminal action “represented a ‘bump in the road’ on his return to the community to serve the interest of Dayton citizens.”

The motion included a letter from Luckie’s sister and brother-in-law, Kathy and John Gudgel.

“Clayton is a people person and continues to display the mindset of giving back to the community in terms of service,” they wrote. “Clayton is well respected and maintains significant influence in and around the Dayton community,” they wrote.

The federal indictments announced in April also include former Dayton City Commissioner Joey D. Williams, 53, who pleaded guilty to a single count of corruptly soliciting a bribe. He is awaiting sentencing.

Others indicted are former city of Dayton business and technical assistance administrator RoShawn Winburn, 45, and Brian Higgins, 48, a Dayton businessman. Both have pleaded not guilty to multiple charges and are awaiting trial.

In October, federal officials announced they had indicted three more people: Steve Rauch, 64, of Germantown, owner of Steve Rauch Inc.; Joyce Sutton Cameron, 71 of Trotwood, owner of Green Star Trucking Inc. and mayor of Trotwood from 2010-2016; and James Cameron, 80, of Trotwood, a Green Star employee and Sutton Cameron's husband.

Each is charged with one count of conspiracy to commit mail fraud and six counts of mail fraud. Rauch pleaded not guilty. The Cameron’s have not yet appeared in court but could make their initial appearance in court in early December, Tabacchi said.

Asked if he knows how they plan to plead, Tabacchi said, “When we get to that bridge we will cross it.”

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