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Home > Blogs > Butler County News and Issues > Archives > 2009 > October > 14
Wednesday, October 14, 2009
Judge orders $4.1 million restitution for Dynus scandal
U.S. District Judge Sandra Beckwith has ordered Karin Verbruggen and other Dynus Corp. officials to pay nearly $4.1 million in restitution for a bank fraud case involving Butler County government.
Verbruggen was sentenced today, Oct. 14, for her role in the fiber optics company taking out a multi-million dollar loan in Butler County’s name without county approval.
She was the first to be sentenced in the case. Awaiting sentencing are former company owner Orlando Carter, former company president Jim Smith and former county auditor Kay Rogers.
Court records say Beckwith agreed to a reduced sentence requested by the U.S. Attorney’s Office. In addition to the restitution, she was sentenced to five years supervised release, one day imprisonment already served and a $100 assessment.
Verbruggen pleaded guilty in 2006 for her role in the scheme that cost Fifth Third Bank and National City Bank more than $10 million combined in loans based on a bogus deal with the county.
Verbruggen testified in Carter’s trial in August that she forged the name of Rogers and National City Bank executive on documents to mislead people about the loan. She did so at Smith’s urging, she said, and told Smith she was uncomfortable with it.
Verbruggen said during the trial she testified in hopes of getting leniency from the court.
Sentencing for Smith is scheduled Dec. 2. Dates have not been scheduled for sentencing Rogers or Carter. Rogers and Smith pleaded guilty to bank fraud, and Carter was found guilty in trial.
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First Dynus sentencing set for today
The first sentencing in the Dynus Corp. scandal involving Butler County government is set for this afternoon.
Former Dynus employee Karin Verbruggen is scheduled to be sentenced before U.S. Judge Sandra Beckwith at 2 p.m. today, Oct. 14.
Verbruggen pleaded guilty to bank fraud in 2006 to her role in the company taking out a multi-million dollar loan in the county’s name without county approval. The deal led to an FBI investigation that resulted in bank fraud charges last year against then county Auditor Kay Rogers, as well as Dynus’ president and the company’s owner.
Verbruggen testified in recent the trial of Dynus owner Orlando Carter that she forged the name of Rogers and National City Bank executives on documents to mislead people about the loan.
She said she did so at the urging of company President Jim Smith, and told Smith she was uncomfortable doing so.
She testified against Carter in the hopes of getting leniency in her sentencing, according to court records. Bank fraud carries a sentence of up to 30 years in prison.
Sentencing for Smith is scheduled Dec. 2. Dates have not been scheduled for sentencing Rogers or Carter.
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Butler County facing $6.6 million shortfall next year
From today’s paper:
(Note: I didn’t post this earlier because I’ve been trying to scan in the budget documents, but am having technical difficulties. I’ll get those up as soon as I can)
Butler County government’s financial blood-letting this year will likely pale in comparison to 2010’s budget woes, according to the most recent projections.
In a letter sent Tuesday, Oct. 13, commissioners are asking their departments and other elected officeholders for 11 percent cuts in non-mandated services to patch a projected $6.6 million hole next year.
They are asking for proposed budgets from these offices by Oct. 30, along with a list of which services they provide that are mandated by law. Everything else is on the table as commissioners work to craft a budget by Jan. 1.
Under initial projections, the hardest hit would be the sheriff’s office. It accounts for more than a quarter of the county’s total $89 million budget and is proposed to lose $2.5 million next year.
“If it becomes a $2.5 million reduction for the sheriff’s office, it will dramatically and severely impact public safety for the citizens we provide services for,” said Chief Deputy Anthony Dwyer.
The sheriff’s office already laid off more than a dozen deputies and corrections workers to deal with a $900,000 budget cut this year. This was part of a slew of layoffs this year as the county cut $2.6 million from its budget and dug into reserves for $5 million to balance this year’s budget.
At a budget meeting Tuesday, county leaders agreed that dipping further into reserves — which could endanger the county’s ability to borrow money — was not an option.
Officials have repeatedly warned they would have to cut staff to meet any new shortfalls.
Ed Dwyer, a division manager for U.S. Bank sitting on a budget advisory board for the county, said the county should consider sharing services with neighboring counties.
“Seems like that should be where we’re going,” Dwyer said.
Commission President Donald Dixon worries that the estimates could be conservative.
“I don’t think $6.6 million is the real number, I believe it’s a low number,” Dixon said. “I don’t know what the final outcome is going to be, but I can assure you the next few weeks are going to be very interesting dealing with this issue.”
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