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Fox ‘violated the public’s trust,’ authorities allege

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Michael A. Fox, in the wheelchair being pushed by his wife Mary Anne Fox, leaves the Potter Stewart U.S. Courthouse in downtown Cincinnati with his attorneys Aaron Herzig((cq)) and Ralph Kohnen, standing behind Herzig, after a hearing on Thursday, Oct. 29. He and Robert C. Schuler have been charged with conspiracy "to improperly benefit from Butler County contracts involving a fiber optics company doing business with the county, " according to the U.S. Attorney's Office. Staff photo by Samantha Grier.

By Josh Sweigart and Dave Greber, Staff Writer Updated 6:44 AM Friday, October 30, 2009

CINCINNATI — Michael Fox — former state lawmaker, Butler County commissioner and Children Services director — appeared in a wheelchair on the federal courthouse steps after a hearing Thursday, Oct. 29.

Fox, 60, and his longtime friend Robert C. Schuler, 46, of Dublin, were released on their own recognizance after learning of charges against them U.S. attorneys say boil down to “public corruption.”

An eight-count indictment against them unsealed Thursday morning outlines years of payments Fox allegedly received from contractors doing business with the county. This includes roughly $460,000 from Schuler, according to the indictment.

They now face decades in prison if convicted.

“Elected officials aren’t supposed to lie, cheat and steal ... and Mr. Fox violated the public’s trust,” said Jennifer Barry, assistant U.S. attorney.

Dwight Keller, also an assistant U.S. attorney, said the indictment was “the culmination of a three-year investigation into public corruption in and around Butler County.”

But Fox’s attorneys were defiant.

“Unfortunately, in 30 years, when you do what’s right for the people instead of for the establishment, you ruffle some feathers and make some political enemies,” wrote Fox attorney Ralph Kohnen

in a prepared statement. “The indictment that was handed down today appears to advance allegations made by some of Mike’s detractors who placed a target on the back of a good and decent man.

“After trial, the public will conclude that this is another example of government overreaching and charging a well-known public official and humiliating him in the process.

“It is noteworthy that the viability of the crime that Mr. Fox is accused of — deprivation of the intangible right to honest services — currently is being challenged in three separate U.S. Supreme court cases.”

Fox has repeatedly claimed he never knowingly did anything wrong, though has refused to comment since a statement Thursday morning.

“I will do my best, with the limited resources that I have, to defend myself against these allegations. In my defense, I offer ‘The Truth’ and I will assert it to the best of my ability.”

Fox will be ‘vindicated,’ attorney says

The U.S. Attorney’s Office said Fox and Schuler “conspired to improperly benefit from Butler County contracts involving a (fiber optics) company doing business with the county,” and that they failed to report income from the deals on their federal income tax returns.

Fox is also charged with mail fraud for allegedly failing to disclose conflicts of interest in Ohio ethics disclosure statements he mailed each year from 2004 through 2007.

Schuler also is charged with perjury for alleged false testimony he gave to a federal grand jury on Oct. 1, 2008.

But Kohnen said in his statement Fox will be “vindicated,” citing his long history of public service. This includes serving as a state lawmaker for nearly 23 years, county commissioner for a decade and Children Services director for nearly two years.

He has been under the FBI’s microscope for some time, with federal authorities gathering documents related to his Fairfield Twp. home and campaign finance forms. He was given the opportunity for a plea agreement, Kohnen said Thursday, and turned it down.

“Obviously, it’s been tough on Mike,” Kohnen said. “He stood strong. He stood by his principles.”

Schuler’s attorney, Columbus-based Kevin R. Conners, declined to provide a reaction to the indictment, saying it wasn’t in his client’s best interests.

Inquiry tied to Dynus fiber-optics deal

The investigation started in 2005, as officials began scrutinizing a fiber optics deal with the now-defunct Dynus Corp. That led to a county auditor and Dynus officials pleading guilty to bank fraud for taking out millions of dollars in illicit loans in the county’s name.

The indictment references the Dynus deal, saying Fox spoke with bank officials to help secure an illicit $4 million loan for the company, and received $3,000 from Dynus President James Smith — money Fox concealed, according to the indictment.

But most of the charges against Fox stem from other contracts and alleged kickbacks from at least three other Butler County companies doing business with the county from 2001 to 2005.

The indictment charges Fox and Schuler each with one count of conspiracy to commit mail fraud and one count of filing a false income tax return.

Fox is also facing four counts of mail fraud; U.S. Attorneys are seeking forfeiture of “any property which is derived from proceeds traceable to the offenses alleged in the indictment, including but not limited to a sum of money equal to $460,000.”

Other charges stem from a contract between Butler County and NORMAP Telecommunications in 2001 to install a county-wide fiber optics communications system.

NORMAP contract at issue

Schuler bought NORMAP after the company received the contract, and received approximately $1.82 million from Butler County, according to the indictment.

The indictment states that Schuler and Fox arranged for a total of $460,000 to be transferred to a bank account controlled by Fox in 2002.

The mail fraud charges stem from Fox allegedly mailing his Financial Disclosure Statements to the Ohio Ethics Commission while omitting the payments he received, and failing to disclose conflicts of interest in 2004-2007.

The indictment states Fox filed a false income tax return for 2002 when he failed to disclose and pay income taxes on various payments to his campaign, his company — Fox Development — or his own bank accounts.

The indictment charges Schuler with filing a false income tax return for 2002 by not reporting business income he received in that year.

Schuler also is charged with making false statements in October 2008 to a grand jury investigating the circumstances surrounding the $360,000 transfer to Fox, according to the indictment.

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