Score:   1
Docket Number:   D-CT  3:18-cr-00272
Case Name:   USA v. Rankin et al
  Press Releases:
United States Attorney John H. Durham, Special Agent in Charge Brian C. Turner of the FBI’s New Haven Division, and Special Agent in Charge Kristina O’Connell of IRS Criminal Investigation in New England today announced that, on November 6, 2018, a federal grand jury in New Haven returned two indictments charging a total of five individuals connected with a southeastern Connecticut energy cooperative with offenses related to the theft of federal funds.  The indictments were unsealed today.

As alleged in both indictments, the Connecticut Municipal Electric Energy Corporation (“CMEEC”) is a cooperative public corporation that permits municipal electric utilities in Connecticut to join together to furnish electric power in the municipalities’ areas of operation.  CMEEC’s members included the City of Norwich, the City of Groton, the Borough of Jewett City, the Second Taxing District of the City of Norwalk, the Third Taxing District of the City of Norwalk, and the Town of Bozrah.  As the owners of CMEEC, each member town executed an agreement through its respective municipal electric utility outlining the terms and conditions under which the CMEEC members participated together in CMEEC.  The CMEEC membership agreement provides that excess revenues are designated as “CMEEC Margin,” and that the excess revenues are to be returned to the member towns to help keep electricity costs stable for ratepayers.

Between 2010 and 2015, CMEEC received more than $9 million dollars from the U.S. Department of Energy.  CMEEC member towns also received funds from federal grants.

Charged in the first indictment are:

DREW RANKIN, 57, of Columbia.  Rankin is the chief executive officer of CMEEC.

JAMES SULLIVAN, 52, of Norwich.  Until October 2015, Sullivan was a City of Norwich representative and the chairperson of the CMEEC Board of Directors.

JOHN BILDA, 54, of Norwich.  Bilda is the City of Norwich representative on the CMEEC Board of Directors and an employee of the City of Norwich.

EDWARD DeMUZZIO, 77, of Groton.  DeMuzzio was a City of Groton representative and the secretary of the CMEEC Board of Directors.

EDWARD PRYOR, 62, of Groton.  Pryor is the chief financial officer of CMEEC.

The first indictment alleges that Rankin, Sullivan, Bilda, DeMuzzio and Pryor planned, organized and directed lavish trips outside of Connecticut, including trips to the Kentucky Derby in 2015 and 2016, and to a luxury golf resort in West Virginia in 2015.  These trips did not relate to CMEEC business or CMEEC Member business, but were intended to personally benefit, compensate and reward the co-conspirators, their family members, friends and associates.  Costs for the trips, which totaled more than $800,000, included travel expenses, private chartered airfare, first-class hotel accommodations, meals, tickets to sporting events, golf fees, souvenirs and gifts.

It is alleged that the co-conspirators did not seek the approval of the CMEEC Board of Directors for these trips and did not include the costs for the trips as budget expenses in the annual general administrative budgets proposed to and approved by the CMEEC Board of Directors.  The co-conspirators directed that the funds used to pay for the trips come from the CMEEC Margin account, without a vote of the CMEEC Board of Directors and without the written consent of the member towns as required by the CMEEC membership agreement.  It is further alleged that, in January 2015, without a vote of the CMEEC Board or consent of the member towns, Pryor directed that a new “contra-margin” account be created for the costs of the Kentucky Derby trips to come from the CMEEC Margin account.

The indictment alleges that the CMEEC Board of Directors had committees, including the compensation committee, which was responsible for determining the compensation of Rankin as CMEEC’s chief executive officer.  Bilda and DeMuzzio were representatives on the compensation committee.  On February 25, 2016, Bilda made a motion at a CMEEC Board of Directors meeting to modify the compensation package of Rankin retroactive to January 1, 2016.  The motion was seconded by DeMuzzio.  The modification increased Rankin’s overall compensation.

It is further alleged that, in response to reporter inquiries about the Kentucky Derby and golf trips, Rankin underreported the costs of the trips, omitted the names of attendees who were not CMEEC employees or board members, and made other false statements related to how the trips were funded.  After the trips were known to the general public, CMEEC canceled a reservation it had made for the 2017 Kentucky Derby, and was refunded only approximately $90,000 of the $298,960 it had prepaid for the trip in May 2016.

The indictment charges each defendant with one count of conspiracy, an offense that carries a maximum term of imprisonment of five years, and three counts of theft concerning a program receiving federal funds, an offense that carries a maximum term of imprisonment of 10 years.

The second indictment charges Rankin and Sullivan with engaging in a conspiracy to pay for Sullivan’s personal expenses with CMEEC funds.  It is alleged that Sullivan submitted his personal expenses on a regular basis via “expense reports” that Rankin approved and directed to be paid out of CMEEC funds.  Sullivan’s personal expenses were charged to the CMEEC’ account for lobbying expenses, even though Sullivan was not a registered lobbyist for CMEEC.  Between January 2012 and August 2015, Rankin authorized the payment of numerous personal expenses for Sullivan, including airfare for dozens of flights Sullivan took, trips for Sullivan and his family members to attend the Kentucky Derby in 2013, 2014, and 2015, and airfare for a flight for Sullivan’s wife to travel to Key West, Florida, in December 2014.

The second indictment charges Rankin and Sullivan with one count of conspiracy and three counts of theft concerning a program receiving federal funds.

“CMEEC has received millions of dollars in grants from the U.S. Department of Energy,” said U.S. Attorney Durham.  “Instead of protecting these funds and returning excess revenue to member towns and ratepayers, these defendants are alleged to have used the CMEEC Margin Account as a secret slush fund to pay for lavish junkets for themselves and their family and friends, as well as for other inappropriate expenses.  The U.S. Attorney’s Office is committed to working with our federal law enforcement partners to safeguard public funds and prosecute those who steal from the public.”

“At a time when there are Connecticut residents struggling to afford basic necessities such as food, housing and electricity, the FBI and its law enforcement partners will continue to hold public officials, and those with responsibility for public funds, accountable for fraud, waste and abuse of those funds,” said FBI Special Agent in Charge Turner.

“The criminal conduct alleged in the indictment is yet another example of those abusing high-level corporate positions to personally benefit at the expense of others,” said IRS Criminal Investigation Special Agent in Charge O’Connell.  “The funds CMEEC allegedly misappropriated for these extravagant trips was motivated by greed, to the detriment of the member towns and ratepayers.  IRS will continue to support these important white-collar investigations, working alongside our federal partners and the U.S. Attorney’s Office.”

Each of the five defendants appeared this afternoon before U.S. Magistrate Judge Robert M. Spector in New Haven, entered a plea of not guilty to the charges, and was released on a $100,000 bond.

U.S. Attorney Durham stressed that an indictment is not evidence of guilt.  Charges are only allegations, and a defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt.

This matter is being investigated by the Federal Bureau of Investigation and Internal Revenue Service, Criminal Investigation Division, with the assistance of the U.S. Department of Energy.  The case is being prosecuted by Assistant U.S. Attorneys Douglas P. Morabito and Sarah P. Karwan.

Description: The fiscal year of the data file obtained from the AOUSC
Format: YYYY

Description: The code of the federal judicial circuit where the case was located
Format: A2

Description: The code of the federal judicial district where the case was located
Format: A2

Description: The code of the district office where the case was located
Format: A2

Description: Docket number assigned by the district to the case
Format: A7

Description: A unique number assigned to each defendant in a case which cannot be modified by the court
Format: A3

Description: A unique number assigned to each defendant in a case which can be modified by the court
Format: A3

Description: A sequential number indicating whether a case is an original proceeding or a reopen
Format: N5

Description: Case type associated with the current defendant record
Format: A2

Description: A concatenation of district, office, docket number, case type, defendant number, and reopen sequence number
Format: A18

Description: A concatenation of district, office, docket number, case type, and reopen sequence number
Format: A15

Description: The status of the defendant as assigned by the AOUSC
Format: A2

Description: A code indicating the fugitive status of a defendant
Format: A1

Description: The date upon which a defendant became a fugitive
Format: YYYYMMDD

Description: The date upon which a fugitive defendant was taken into custody
Format: YYYYMMDD

Description: The date when a case was first docketed in the district court
Format: YYYYMMDD

Description: The date upon which proceedings in a case commenced on charges pending in the district court where the defendant appeared, or the date of the defendant’s felony-waiver of indictment
Format: YYYYMMDD

Description: A code used to identify the nature of the proceeding
Format: N2

Description: The date when a defendant first appeared before a judicial officer in the district court where a charge was pending
Format: YYYYMMDD

Description: A code indicating the event by which a defendant appeared before a judicial officer in the district court where a charge was pending
Format: A2

Description: A code indicating the type of legal counsel assigned to a defendant
Format: N2

Description: The title and section of the U.S. Code applicable to the offense committed which carried the highest severity
Format: A20

Description: A code indicating the level of offense associated with FTITLE1
Format: N2

Description: The four digit AO offense code associated with FTITLE1
Format: A4

Description: The four digit D2 offense code associated with FTITLE1
Format: A4

Description: A code indicating the severity associated with FTITLE1
Format: A3

Description: The title and section of the U.S. Code applicable to the offense committed which carried the second highest severity
Format: A20

Description: A code indicating the level of offense associated with FTITLE2
Format: N2

Description: The four digit AO offense code associated with FTITLE2
Format: A4

Description: The four digit D2 offense code associated with FTITLE2
Format: A4

Description: A code indicating the severity associated with FTITLE2
Format: A3

Description: The title and section of the U.S. Code applicable to the offense committed which carried the third highest severity
Format: A20

Description: A code indicating the level of offense associated with FTITLE3
Format: N2

Description: The four digit AO offense code associated with FTITLE3
Format: A4

Description: The four digit D2 offense code associated with FTITLE3
Format: A4

Description: A code indicating the severity associated with FTITLE3
Format: A3

Description: The FIPS code used to indicate the county or parish where an offense was committed
Format: A5

Description: The date of the last action taken on the record
Format: YYYYMMDD

Description: The date upon which judicial proceedings before the court concluded
Format: YYYYMMDD

Description: The date upon which the final sentence is recorded on the docket
Format: YYYYMMDD

Description: The date upon which the case was closed
Format: YYYYMMDD

Description: The total fine imposed at sentencing for all offenses of which the defendant was convicted and a fine was imposed
Format: N8

Description: A count of defendants filed including inter-district transfers
Format: N1

Description: A count of defendants filed excluding inter-district transfers
Format: N1

Description: A count of original proceedings commenced
Format: N1

Description: A count of defendants filed whose proceedings commenced by reopen, remand, appeal, or retrial
Format: N1

Description: A count of defendants terminated including interdistrict transfers
Format: N1

Description: A count of defendants terminated excluding interdistrict transfers
Format: N1

Description: A count of original proceedings terminated
Format: N1

Description: A count of defendants terminated whose proceedings commenced by reopen, remand, appeal, or retrial
Format: N1

Description: A count of defendants pending as of the last day of the period including long term fugitives
Format: N1

Description: A count of defendants pending as of the last day of the period excluding long term fugitives
Format: N1

Description: The source from which the data were loaded into the AOUSC’s NewSTATS database
Format: A10

Description: A sequential number indicating the iteration of the defendant record
Format: N2

Description: The date the record was loaded into the AOUSC’s NewSTATS database
Format: YYYYMMDD

Description: Statistical year ID label on data file obtained from the AOUSC which represents termination year
Format: YYYY

Data imported from FJC Integrated Database
Date Announcement: Dec. 28, 2018
Branch: Energy
Company: Connecticut Municipal Electric Energy Cooperative
Country: USA
Continent: North America
Position: CEO
Reason: Suspended
Date Announcement: Dec. 28, 2018
Branch: Energy
Company: Connecticut Municipal Electric Energy Cooperative
Country: USA
Continent: North America
Position: CFO
Reason: Suspended
Date Announcement: Dec. 28, 2018
Branch: Energy
Company: Norwich Public Utilities
Country: USA
Continent: North America
Position: General Manager
Reason: Suspended
Date Announcement: Dec. 28, 2018
Branch: Energy
Company: Connecticut Municipal Electric Energy Cooperative
Country: USA
Continent: North America
Position: Board Member
Reason: Resigned
Date Announcement: Dec. 28, 2018
Branch: Energy
Company: Connecticut Municipal Electric Energy Cooperative
Country: USA
Continent: North America
Position: Board Member
Reason: Resigned
Additional data courtesy @ResignationAnon 🐸 and resignation.info  
F U C K I N G P E D O S R E E E E E E E E E E E E E E E E E E E E