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Press Release

Former Cleveland Housing Network official sentenced to prison for taking bribes and steering contracts

For Immediate Release
U.S. Attorney's Office, Northern District of Ohio

A former Cleveland Housing Network official was sentenced to 30 months in prison for taking bribes and steering contracts, law enforcement officials said.

James Todt, 49, of Brecksville was sentenced to 30 months in prison by U.S. District Benita Y. Pearson. He previously pleaded guilty to one count of conspiracy to commit bribery and two counts of theft concerning programs receiving federal funds.  

Todt worked at the Cleveland Housing Network between 2005 and 2014, where his duties included supervising inspectors and project managers, as well as awarding CHN contracts on various projects for the non-profit community development organization. Lizandro Orellana, 56, of Cleveland, owned and operated Modern Construction Group LLC. Chris Peterson, 42, of Macedonia, owned and operated Top Notch Construction, according to court documents.

Todt corruptly solicited and accepted things of value from Orellana and Peterson between 2009 and 2014. Orellana paid $8,222 to Todt’s personal credit account at a local business in exchange for CHN work awarded to Modern Construction. Peterson paid Todt up to $10,000 in cash in exchange for CHN work that Todt awarded to Top Notch, according to court documents.

On numerous occasions, Todt provided Orellana with CHN’s internal cost projections for various projects, which were used to evaluate a contractor’s bid.

Orellana paid another person to do $3,650 worth of electrical work at Todt’s home in November 2012. In October 2013, Todt asked Orellana for assistance building a deck and installing windows at his home. Orellana provided a crew of six Modern employees to construct the deck, and directed employees to install seven windows. The labor cost related to the deck and windows was valued at approximately $8,736, according to court documents.

In 2012, Peterson repaired the roof of a home in Seven Hills owned by one of Todt’s relatives, and performed repairs on a rental property owned by Todt in Brecksville, according to court documents.

Todt also submitted false invoices and caused two checks totaling $15,280 to be deposited into his personal account, according to court documents.

Additionally, Orellana had a lead abatement contractor license issued by the Ohio Department of Health, which allowed Modern Construction to bid on lead-based paint abatement projects for CHN homes. These projects often required Modern to gut a portion or all of a home’s interior, including the removal of doors, windows, walls, moldings and sometimes porches. Orellana understood the work was to be done by workers licensed to perform lead-based paint abatement and comply with federal and state standards, according to court documents.

Modern Construction was contracted to conduct lead-based paint abatement on several CHN properties between 2010 and 2012. Orellana, due to his workload and to save time, directed employees to gut homes containing lead-based paint. Items and components covered in lead-based paint were removed without following abatement procedures. The employees directed to gut the homes were not licensed to perform lead-based paint abatement, which Orellana knew, according to court documents.

Orellana, Peterson and Modern Construction have pleaded guilty to their roles in the case and are scheduled to be sentenced Thursday.

This case is being prosecuted by Assistant U.S. Attorney Robert J. Patton and Special Assistant U.S. Attorney Brad Beeson. It comes following an investigation by the FBI, HUD-OIG, U.S. EPA, Ohio EPA, Ohio Bureau of Criminal Investigation, Ohio Department of Health – Environmental Compliance Program and the Cleveland Division of Police.

Updated October 12, 2016

Public Corruption