Questions surround raids on businessman’s properties

Authorities say little after raids at properties owned by Steve Rauch.

Federal and state investigators on Tuesday raided two properties owned by local businessman Steve Rauch, whose companies have received millions in government contracts and whose public and private work has been visible in the region for decades.

Numerous agents from the U.S. Secret Service, Ohio Bureau of Criminal Investigation and other agencies spent the day going in and out of the main office of Steve Rauch Inc. in Dayton on the border with West Carrollton, as well as Rauch’s Bearcreek Farm property in Jefferson Twp.

With warrants sealed and investigators saying little, it was unclear even late Tuesday what the subject of the raids were, and Rauch himself said he did not know.

“They haven’t told me anything,” he said. “I can’t tell you anything if I don’t know anything.”

It was also unclear why the Secret Service was involved. Among its duties, the Secret Service enforces counterfeiting laws, safeguards the payment and financial systems of the United States from financial and computer-based crimes, and provides analysis related to polygraph exams, fingerprints, false identification documents, credit cards and other related forensic science areas, according to its website.

State and local officials directed questions to the Secret Service, which would not discuss the case other than to say, “The Secret Service does not discuss active investigations.”

Rauch provides demolition, excavation and trucking services through his companies Steve Rauch Inc., Rauch Trucking and SRI. His businesses do private work, and have also received millions of dollars in local and federal contracts, including work at Wright-Patterson Air Force Base and from the city of Dayton.

The Dayton property that was raided Tuesday, at 1550 Soldiers Home-West Carrollton Road, houses a state-licensed construction and demolition debris dump.

The Bearcreek Farm property, located at 7750 Dayton-Farmersville Road, was the subject of a heated dispute with neighbors over a composting facility Rauch proposed building on 10 acres of the property in 2014.

Rauch is still fighting the county and neighbors in Montgomery County Common Pleas Court for the go-ahead for the project.

‘I don’t know anything about it’

The raids follow a months-long BCI investigation into illegal dumping on 28 acres of land in West Carrollton near the Great Miami River. Certain companies were allowed to dump dirt and “clean” fill there, but more than 30 tons of improper material was found buried at the site, which is owned by the city.

Because BCI is involved in that investigation and was present at Tuesday’s raids, this newspaper requested that West Carrollton provide a list of all entities that have been permitted to use the property at 4000 Hydraulic Road to dispose of materials.

The newspaper’s request was denied. City Manager Brad Townsend said the city’s law director “has spoken with the Special Agent in charge of the case about your request for public information. He advised her that since this was a sealed warrant, no information can be released at this time.”

When asked about the West Carrollton investigation, Rauch said, “I don’t know anything about it.” He said he has disposed of material at that property, saying, “We did it for the city.” He declined further comment.

Major businessman, patron

Rauch’s company has grown from modest beginnings in 1976 to under 100 employees operating across multiple states.

“Our customers include private, institutional, municipal, state, and federal agencies with projects that range in size from as little as One Thousand Dollars ($1,000) to over Two Million Dollars ($2,000,000),” the company’s website says. “Our years of experience allow us the opportunity to cost effectively service projects as simple as demolishing a small outbuilding to the complete removal of an entire downtown area parking garage or buildings.”

A federal spending database says he was a major sub-contractor for a $12 million federal contract at Wright-Patterson Air Force Base in 2014.

City of Dayton records show his companies have received millions in demolition contracts in recent years.

He is also active in the community as a major local political supporter and charitable donor, in June donating $1.5 million to the Kettering Medical Center toward a new cancer center.

Controversy, however, has sometimes followed the company. Rauch received the demolition contract when a company called Student Suites Inc. purchased the former Dayton Daily News building site and proposed building a 350-unit student housing complex. But Rauch later halted work on the demolition when he said Student Suites failed to pay him $869,000.

Rauch sued Student Suites for his unpaid bills, and the parties earlier this year agreed to a settlement that would deed part of the property to Rauch.

Rauch then agreed to sell the land to the city of Dayton for $450,000. The city — long concerned about the mess left at the site — has since hired a contractor to finish cleaning up the site and readying it for redevelopment.

Pipeline lawsuit

The Bearcreek property was involved in a federal lawsuit in 2010 when a pipeline company sued Rauch and two of his companies, alleging a breach of a right-of-way agreement.

A federal judge ordered Rauch to pay $29,412.59 to ANR Pipeline Company as part of a stipulated final judgment in the case, which states that Rauch “caused damages” to ANR’s pipeline that runs under the property, and violated a 1991 agreement that gives ANR a 50-foot right of way.

According to the lawsuit, Rauch violated the agreement three times by excavating near the pipeline, once as close as 24 inches.

“Pipeline strikes on natural gas pipelines are extremely dangerous,” the suit said. “Such strikes can cause a catastrophic explosion because the natural gas being transported through the pipeline is under very high pressure.”

Aside from paying the money for damages to ANR’s right-of-way, Rauch was ordered by U.S. District Judge Timothy Black to never undertake future excavations near the pipeline unless several conditions were met.

ANR Pipeline also sued Rauch in 2002, alleging damage to their pipeline and asking for damages of $230,000. That dispute was settled out of court, according to Montgomery County Common Pleas Court records.

Staff Writer Mark Gokavi contributed to this report.