Federal documents obtained by the Dayton Daily News reveal for the first time how investigators built a public corruption case against former City Commissioner Joey Williams, using confidential informants and secret recordings to catch him in a bribery scheme.
Williams, 54 and a former Key Bank executive, resigned from city commission in 2018 after 16 years. He pleaded guilty last year to one federal felony count of corruptly soliciting a bribe. In January, U.S. District Court Judge Thomas M. Rose sentenced Williams to a year in prison, followed by six months of home confinement, and ordered him to pay $28,000 in restitution.
He is one of seven people indicted in a federal public corruption investigation in the Dayton region that was unveiled last year. Three of them, including Williams, were convicted, three have pleaded not guilty and one has not yet appeared in court.
The Dayton Daily News obtained a federal search warrant and supporting documents from the 2015 search of Williams’ Sunnyview Avenue home. Using those and other public records and interviews, our investigation found:
• United Demolition Excavation and Site Management of Dayton was the company Williams took a bribe to assist, and it ultimately did such poor work that the city withheld payment on those contracts.
• Mike Marshall, United Demolition’s co-owner and operating manager, is the confidential FBI informant who recorded Williams and another of the indicted defendants, Dayton businessman Brian Higgins. Marshall denies he is the informant.
• A still unreleased internal investigation by the law firm Green and Green, which the city launched after Williams and then-city employee RoShawn Winburn were indicted, found no additional evidence of bribery, crimes or fraud, City Law Director Barbara Doseck said in an interview last week.
• The city plans to fix contracting vulnerabilities, including weak processes, lack of standardization and too little oversight.
• City Manager Shelley Dickstein will put in place reforms designed to keep a single city commissioner or employee from tipping the scales in favor of a company that does not have the lowest and best bid on a city contract. Dickstein said in an interview the new system would create “a stronger firewall between any kind of influencing interest in our procurement activity.”
In January 2015 the main informant told Williams his company was having difficulty getting city of Dayton work, despite having submitted the lowest bid for a demolition job. Williams agreed to help the confidential informant’s company get work from the city and CityWide Development Corp. in exchange for the informant doing renovations to Williams’ home for substantially less than the true cost of the job, according to the search warrant application affidavit filed by FBI Special Agent Lance R. Kepple in U.S. District Court.
Federal documents say Williams paid the informant $6,000 and gave him a designer cat house Williams said he had bought at a charity auction for $1,000. That is the total amount Williams paid for renovations to his patio and home that cost more than $35,000, according to a statement Williams signed in September as part of his plea agreement. The warrant affidavit said Williams requested and received a “paid in full” invoice for $56,750 from the informant.
Within months, the informants’ company received demolition contracts from both the city and CityWide, and Williams voted on a city contract without revealing the “improper benefits that he received,” according to the statement Williams signed.
Williams attorney, Patrick J. Hanley, declined comment.
“The recently released details from the case against Joey Williams tell a sad story — not only for Joey, but for the people of Dayton,” Dayton Mayor Nan Whaley told the Dayton Daily News. “Despite this, the people of Dayton have once again shown our ability rise in the face of adversity, learn what we can to make ourselves better, and continue fighting for this community that we love.”
Dubbed “Operation Demolished Integrity,” the federal probe began in 2013 when the FBI began investigating allegations that “a Dayton-area businessman not only had engaged in fraud but also had bribed local officials in exchange for receiving federally funded demolition contracts in the Dayton metropolitan area,” according to the affidavit.
During the investigation the FBI developed two confidential informants who are described as “operators of a private demolition company” in the Dayton region. One of them made the recordings of Williams and told him that he had previously worked for that Dayton-area businessman, according to the document.
The two confidential informants “agreed to cooperate with the FBI in part to minimize their individual exposure to potential criminal charges for their respective roles in a scheme to defraud local government entities,” according to the affidavit, which also says both informants “have received monetary payments from the FBI.”
The affidavit includes mention of a single meeting Williams had with the second informant, when he allegedly told Williams the company “would need millions of dollars in city of Dayton contracts to make up for the money” spent on Williams’ home.
Later, in a recorded conversation with the first informant, Williams said he was upset about that remark and the first informant apologized.
“As God is my witness though, there is nothing I have done for you … that I wouldn’t have done had we never talked about this, I just want you to know that,” Williams said, according to the affidavit.
The transcript says Williams told the informant, “I have been doing this for 14-15 years, I have never accepted a thing (and) the only reason I did this is, I didn’t realize what I was agreeing to when we started and it kind of blew up, and I said, ‘(expletive) it.’”
“I just want a good conscience, myself. I am a Christian and I like to do things the right way,” Williams is quoted as saying. “I’m also not perfect. I’m a sinner, too.”
On one audio recording from August 2015, “Williams discussed apparent bribes that a Dayton area businessman had provided to public officials, including him,” according to the affidavit. Williams said the businessman gave him campaign contributions and and an envelope with $1,000 in cash that Williams said he returned several days later.
Agent Kepple noted in the affidavit that a different confidential source had previously told federal agents that that “bribe payment” to Williams actually totaled $5,000 and that Williams tried to return it only after learning that the businessman might have video recorded the payment. But the businessman refused to take it back so Williams kept it, according to the affidavit. The agent also notes that the businessman who allegedly bribed Williams is the same one who sparked the FBI investigation.
Other comments in the affidavit include:
• Williams said he advocated in favor of the informant’s company to Dickstein, who was then assistant city manager, and when Williams complained about how long it was taking, she told him that the city was engaging in “due diligence.” Dickstein said last week United Demolition was the only company Williams ever approached her about.
• Williams asked Catherine Crosby, then-executive director of Dayton’s Human Relations Council, to help. She told him Winburn was assisting the company with improving deficiencies.
• Crosby, who is now chief of staff for the city of Toledo and couldn’t be reached for comment, told Williams that Dickstein suggested the company get some smaller CityWide projects to gain experience, according to a transcript of a phone call from Crosby to Williams that the informant recorded. Dickstein told the Dayton Daily News that she doesn’t recall mentioning CityWide specifically, but said Crosby was likely in the meeting where Dickstein suggested to two United Demolition officials that they seek smaller government contracting jobs to overcome their deficiencies. Dickstein cannot recall the names of the men she met but Marshall and co-owner Scott Waters submitted bids to the city.
• Williams said he also advocated for the informants’ company to then-CityWide President Steve Budd, who retired in January 2018. Budd could not be reached for comment.
• The informant alleged that a CityWide employee told him someone “high up in the city of Dayton” had recommended his company for a demolition job. Brian Heitkamp, CityWide president, said in an interview last week, “We believe it was someone from City Hall, perhaps Shelley Dickstein, who mentioned the name of the company to us.”
• Williams told the informant he wanted to start a “drywall or home construction business that could obtain certification as a disadvantaged business,” but he would have to put the company in someone else’s name so it could obtain city contracts without him having a conflict of interest as a commissioner.
Corruption cases linked
Besides Williams, those indicted include former Huber Heights Councilman Winburn, 46 , who was fired last year from his job as the city of Dayton business and technical assistance administrator after his indictment was announced. On Feb. 11, Winburn pleaded guilty to one count of corruptly soliciting a bribe in a deal that included prosecutors dropping five other charges.
Winburn admitted accepting more than $6,500 in bribes from an unnamed local business owner seeking city contracts. In return, Winburn provided that person with confidential city information about an upcoming contract, giving that company an advantage over other bidders. Winburn’s attorney, David P. Williamson, declined comment.
Higgins, 48, pleaded not guilty to three counts of mail fraud and one count of wire fraud. He is awaiting trial on allegations that he defrauded an insurance company by diverting for personal use insurance money for repairs after a leaking fish tank damaged his Butler Twp. home. Insurance company Assurant lost more than $100,000, according to the indictment. Higgins is accused of telling the confidential informant to do only part of the repairs and give him the remaining money, according to the search warrant affidavit.
The search warrant affidavit also says Higgins introduced the informant to Williams. That informant then secretly recorded conversations with Williams as the two worked out the bribery scheme.
In an interview last week, Higgins confirmed that he hired Mike Marshall and United Demolition to do the work at his house, and introduced Marshall to Williams. Higgins said Marshall kept the insurance money and didn’t do the work on his house, prompting Higgins in 2014 to call the Dayton Police and accuse the company of fraud.
Higgins also said he is now aware, based on evidence provided to his attorney, that Marshall was recording his conversations and he accused Marshall of “entrapment.”
Marshall, 55, of West Carrollton, said he doesn’t know who the informant was.
“Whoever that person was that assisted the FBI, more power to them. What a great job,” Marshall said last week. He declined to answer additional questions.
Former state Rep. Clayton Luckie, 56, of Dayton, pleaded guilty and was sentenced to prison on one count of mail fraud in a scheme to defraud the city of Dayton’s disadvantaged business contracting program. He received $2,000 from an unnamed contractor. In an interview after Luckie’s sentencing, his attorney Aaron Durden said there is a single common witness in the cases of Williams, Winburn, Higgins and Luckie.
Also indicted were Steve R. Rauch, 64, of Germantown, the owner of demolition, trucking and landfill businesses; former Trotwood Mayor Joyce Sutton Cameron, 71, owner of Green Star Trucking; and her husband and Green Star employee James Cameron, 81. Each face one count of conspiracy to commit mail fraud and six counts of mail fraud in an alleged scheme to defraud the city of Dayton using its minority contracting program.
For years Rauch was the city of Dayton's main demolition contractor. He obtained more than $4.7 million in city demolition contracts between 2008 and 2016 by using Green Star Trucking to meet minority contracting goals, a Dayton Daily News investigation found.
In 2017 federal investigators subpoenaed city documents on all three. Rauch and Sutton Cameron have pleaded not guilty and James Cameron has not made an initial appearance in court.
Federal documents do not reveal the names of the informants and U.S. Attorney Spokeswoman Jennifer Thorton declined to name them. But Dickstein said the company Williams pushed her to hire is United Demolition, and among the items seized in the raid on his home were “3 copies of United Demo checks,” according to the seizure inventory.
The firm was incorporated in 2013 and the owners listed on 2015 documents the company provided to the city are Marshall, Waters, attorney Anthony Sullivan and Jeff Farmer. Waters and Sullivan could not be reached for comment.
Farmer said he, Marshall and Waters met when they were employed by Rauch. Farmer said he hasn’t been involved with United Demolition for years and had nothing to do with Williams’ renovations. He said his only role at United Demolition was to repair equipment, and that Marshall still owes him money.
United Demolition had been the low bidder on a city of Dayton contract in 2015. But city staff recommended against hiring the company after three local governments that used the company said they would not recommend them and would never use them again, according to a June 2015 memo from Kevin C. Powell, who was then Dayton’s acting manager of the housing inspection division.
Records show that in mid-2015, just months after Williams said he had worked to get them contracts, United Demolition was hired to demolish nuisance structures — first by CityWide Development Corp., a publicly funded nonprofit that assists with city development efforts, and then by the city of Dayton.
The contracts were awarded despite recommendations by city staff against hiring United Demolition due to multiple red flags, including accusations of deception and nonpayment from other companies and poor recommendations by previous customers. Williams told the informant that Dickstein said the informant had been accused of bribing someone on a previous job.
“I’m not saying it didn’t happen,” the informant replied, noting that he “grew up in the …world” of a Dayton businessman rumored to have bribed officials, according to the warrant affidavit.
Dickstein said she does not recall telling Williams that United Demolition had been accused of bribery. That would have been a serious red flag, she said.
United Demolition was hired in 2015 for two CityWide demolition projects on Salem Avenue at a total cost of $37,095. Heitkamp said the company submitted the lowest responsive bid among at least four contractors.
The demolition was part of the Project Phoenix neighborhood revitalization program and Williams sat on the project’s board. Heitkamp said there were no problems with the work. But he also said that the nonprofit has made some changes.
“We are always reviewing our internal procedures to ensure compliance and best practices,” Heitkamp said. “We have implemented additional check-and-balance procedures in order to add another layer of sign off and review to our system.”
City commissioners approved a $123,680 contract with United Demolition on Sept. 9, 2015, to tear down about 18 residential structures. On June 8, 2016, the company was awarded a $247,588 contract to tear down about 13 commercial structures. Williams and the four other commissioners approved the contracts.
The city’s experience with United Demolition was not positive. It failed to complete work on time and the city found illegal dumping at two sites, debris hidden underneath fill, a foundation not removed and damage to adjoining properties at multiple sites, according to city and court documents. The city withheld a portion of payments to the company and never used it again after that June 2016 contract.
Documents filed in May 2019 by Marshall’s attorney in a zoning case at Dayton Municipal Court indicate United Demolition has ceased operations and has no assets. But the secretary of state’s website still shows it as an active company.
Dickstein called it “disheartening” that Williams brought her into his plan to get United Demolition work. But she said she believes she and other staff “acted with utmost integrity” and she had no idea he was being bribed to help United Demolition.
“I feel very satisfied that there was a thorough investigation and that the organization was not, the administrative organization, was not culpable of any further corruption,” Dickstein said. “I remain convinced that our procurement processes are thoughtful and that we are good stewards of the tax dollars.”
Staying with the story: The Dayton Daily News first broke the news about a federal investigation into corruption in Dayton. The newspaper will continue to dig into this important story to find out what’s really going on. If you have tips or any information on this investigation, please call or email Lynn Hulsey at 937-225-7455 or Lynn.Hulsey@coxinc.com.