Timeline of Dynus Corp. case
This is a timeline in the Dynus fiber optics scandal in Butler County. The investigation started in 2005 when Butler County Commissioner Charles Furmon asked the FBI to determine if fiber optics firm Dynus Corp. took out a multimillion dollar loan in the county’s name without approval.
Aug. 9, 2004: County Auditor Kay Rogers signs a mutual confidentiality agreement with Jim Smith, chief marketing officer of CBS Technologies, which later became Dynus.
Sept. 15: Rogers signs a declaration that names Smith a representative of the county.
Dec. 31: Rogers signs a resolution at her home saying the county would borrow roughly $5.3 million from National City Bank for a fiber-optics deal with Dynus Global Communications. The resolution listed Rogers and Smith as county representatives.
Dec. 31: Rogers and County Commissioner Michael Fox have a phone conversation with National City.
Jan. 12, 2005: A Dynus representative identified by the FBI as “JS” is paid $9,500 to “HRH, a third-party intermediary company,” according to the FBI.
Jan. 19: HRH pays $9,500 to Rogers.
Feb. 28: Smith meets with commissioners about the project.
July 28: Commissioners approved an agreement with Dynus Corp., allowing the company to use four of the county’s fiber optic lines in exchange for the company attracting jobs and investment to the county.
Aug. 26: Dynus’ line of credit with Fifth Third increased from $3 million to $7 million as a result of the Butler County contract.
Late August: The county receives an invoice for lease agreements and discovers the debt with National City.
Sept. 14: County administrators meet with Dynus and National City officials, seeking a way to settle the dispute.
Sept. 16: Commissioners unanimously sever the economic development agreement.
Sept. 22: FBI begins its investigation of potential bank fraud, other crimes.
Sept. 26: Rogers returns the $9,500 to HRH “in an effort to conceal the receipt of (the money),” according to the FBI. The money then went back to JS.
Oct. 6: Furmon says Rogers; Smith; George Lang, West Chester Twp. trustee and Dynus Financial president; Scott Owens, county GOP executive director and Dynus Technologies government relations director; Orlando Carter, Dynus CEO and officials from Fifth Third Bank met March 8, 2005, to discuss the debt.
Oct. 11: Fifth Third gives Dynus three days to pay back $6 million because the Butler County contract is in question.
Oct. 14: Fifth Third halts Dynus’ payroll, locks the firm’s doors and files suit for default in Hamilton County.
Nov. 10: Butler County files a lawsuit against Dynus and National City to absolve the debt. National City forgives debt.
February 2006: Dynus sues the county for $12 million, the value of the disputed contract, plus punitive damages.
March 29: Rogers does not disclose the receipt of $9,500 from JS or Dynus in her financial disclosure statement, according to federal officials.
September: Dynus officials drop their lawsuit, saying they want to give the FBI investigation time to pan out.
September 2007: Dynus’ deadline to refile passes as the FBI investigation continues.
Feb. 25, 2008: Court records are unsealed. They include Rogers’ guilty plea for bank and mail fraud and tax evasion.
March 4: Rogers resigns amid pressure from state and local officials.
May 7: Federal officials release an 11-charge indictment of Carter on charges including bank fraud, and release guilty pleas on bank fraud charges from Smith and Dynus projects manager Karin Verbruggen.
August 2009: Carter is found guilty on 11 felony charges for his part in a scheme that cost two banks more than $10 million, caused his company’s 2005 collapse and ignited a political scandal in Butler County. Rogers, Smith and Verbruggen all plead guilty.
Oct. 29: U.S. District Court unseals an eight-count indictment on former Butler County Commissioner Michael Fox. The indictment also names Robert Schuler, the son of a late state legislator and a friend of Fox’s since their days at Miami University. 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 the men failed to report income from the deals on their federal income tax returns. Fox also is charged with mail fraud for allegedly failing to disclose conflicts of interest in Ohio ethics disclosure statements he mailed annually from 2004 to 2007. Schuler is charged with perjury for allegedly false testimony he gave a federal grand jury on Oct. 1, 2008.
June 9, 2010: Carter is sentenced to 15 years in prison.
Aug. 4: The federal government files a superseding indictment against Fox, adding the term “kickback and bribery scheme,” to the original indictment. In subsequent filings, Fox’s defense attorneys claimed this was a new indictment, but it was allowed. Fox’s attorneys also attempted to have all charges dismissed. They were not.
Aug. 25: After the Oct. 4 trial was delayed, Fox’s trial was set for April 11, 2011. A preconference trial was set for March 9, 2011.
Dec. 15: Lang is indicted on a federal perjury charge. The government said the West Chester Twp. trustee lied under oath during the Carter trial. Lang claimed he did not know Smith was an employee of Dynus.
Jan. 25, 2011: The federal government lays out its case, showing evidence Lang knew Smith was an employee of Dynus. That evidence includes sworn statements from Smith and former Butler County GOP Executive Director Scott Owens, documents from Lang’s companies, and e-mails from Lang identifying Carter and Smith as the “leadership” of Dynus.
Jan. 30: Lang’s federal perjury trial begins and is expected to last five days.
Feb. 9: A jury determines Lang is not guilty of federal perjury charges.
March 10: Fox pleads guilty to charges of conspiracy to commit wire and mail fraud and for filing a false tax return.
March 12, 2012: A federal judge sentences Fox to four years in federal prison.
Nearly a decade after a bank fraud scheme rocked Butler County politics, the businessman at the center of the bad deal is maintaining his innocence in the scandal from prison.
Orlando Carter, the man accused of mismanaging his fiber optics business, Dynus Corp., and found guilty of swindling big banks out of millions, is fighting his 15-year sentence from his federal prison cell at the Federal Medical Center in Lexington, Ky.
Carter was found guilty on 11 felony charges in 2009 for a bank fraud case that enlisted the help of his company’s president and a Butler County auditor to craft a fake, multi-million dollar loan from National City Bank that was taken out in the name of Butler County taxpayers in 2004.
Now, he’s appealing that verdict to the same U.S. District Court judge that once called him a “fundamentally dishonest person” at his sentencing hearing four years ago. In his appeal, Carter claims his attorneys inadequately represented him at his trial. Bankers, he said, rushed to cover up a shady loan that should have never been issued to Butler County in the first place.
“Obviously, I maintain my innocence,” Carter, now 48, said in an exclusive sit-down prison interview with the Journal-News at the Federal Medical Center. “I always believed I was innocent.”
Carter is so convinced he’s blameless for the 2004 fiber optics scheme that mislead banking executives to extend more than $10 million in loans and lines of credit to him, his company and Butler County, that he told the Journal-News he turned down three plea deals from federal prosecutors before heading to trial. He rejected all three deals against the advice of his attorney, and one of the deals, Carter said, might have kept him out of prison.
Sitting in an interview room in the Kentucky prison in a beige jumpsuit, Carter said he doesn’t regret the decision to fight the federal charges. Carter was the only of the four involved in the scheme to take the charges to jury trial. Former Butler County Auditor Kay Rogers, former company president Jim Smith and former employee Karin Verbruggen all pleaded guilty to charges which included bank fraud.
“I think I was the big fish in the pond, as the CEO and owner of Dynus Corp.,” Carter said of why the Federal Bureau of Investigations went after him for charges related to bank fraud. As he did at his trial five years ago, Carter still accuses Smith of keeping him in the dark over the fraudulent business deals.
If he doesn’t win an appeal for his case, he’s not scheduled to be released from prison until Aug. 5, 2023 — another 3,408 days. And, he still has $4.1 million in restitution to repay Fifth Third Bank.
Fifth Third Bank extended a $7 million line of credit to Dynus because Carter made claims of multi-million dollar deals with local governments. Had he reported the $4 million loan deal between his company, Butler County and National City Bank, bankers say they would have never extended his credit that high. Carter said he used the Fifth Third Bank credit to invest millions of dollars in his growing company but evidence given during his 2009 trial suggested he had a habit of spending company dollars on personal expenses, including $360,000 down payment on a Maineville house and $180,000 in box seat tickets at Paul Brown Stadium.
His guilt is a matter for lawyers and judges to debate in a courtroom, if his appeal makes it there. But one thing is certain: he’s determined to convince others of his self-perceived innocence, too.
He lugged a half-foot thick folder filled with paperwork to his interview with the Journal-News. He said hundreds of more pages sit in his cell. He visits the prison’s law library whenever it’s open to research his case, he said.
Among those hundreds of pages he keeps on his case is a list of at least a dozen reasons he thinks his trial was botched.
The jury, he said, was likely confused by such a complex case. He claims witnesses who took the stand lied more than 72 times and wondered if race — Carter is black — could have been a factor.He claims his attorneys failed to understand his case or interview any key witnesses. And, on the same note, they didn’t retain a forensic accountant to analyze any of the financial documents in his case.
That’s the point Carter’s new attorney, Nick Mango, of Columbus, is pushing in Carter’s appeal. He argues if Carter’s previous attorneys had hired a forensic auditor to pore over the financial documents involved in the case, Carter wouldn’t be in prison right now.
“Our issue here is that (the previous attorneys) never retained, consulted with or used any type of forensic accounting expert,” Mango said.
National City bankers, who authorized a $5.3 million loan for a deal between Butler County and Dynus in 2004 based on paperwork signed by Rogers and Smith, should have never let the agreement pass, Carter said.
“The bankers were crying that they had been wrong when they were the ones who made the mistake,” Carter said.
Mango said the piece of paper that guaranteed the loan and was signed by Smith, the former president of Dynus, was invalid because Smith wasn’t legally allowed to commit the company to such an agreement. Only Carter, the chief executive officer of Dynus at the time, had such authority.
Last month, U.S. District Court Judge Sandra Beckwith, who sentenced Carter in 2010 and is now hearing his appeal, ordered Carter’s former attorneys to give statements as to why they didn’t hire a forensics accountant for the case.
Martin Pinales, one of the Cincinnati lawyers who represented Carter at his trial, wouldn’t comment for this story but he did say in a statement to the court that a forensics account wasn’t used to defend the trial out of fear the expert testimony could backfire.
Officials with the U.S. Attorney’s Office and PNC Bank, which acquired National City Bank, also declined comment for this story. But the Assistant U.S. Attorney responding to the appeal called Carter’s complaints “frivolous” and said “his attorneys were not deficient” in a January filing with the court.
Still, Carter, who has until April 23 to give his latest response to the courts for his case, remains optimistic about his appeal. He’s still fighting off a foreclosure on his Maineville mansion — the one federal prosecutors say he bought after ordering Dynus company employees to fake a W2 so the bank believed he could afford the home.
Carter said he needs the $1.2 million house “when” he wins his appeal, is released from prison and “can go home and go to work.”