Man sought in $3.3M con of schools caught in Spain

A Broadview CLEVELAND — Heights man whom federal authorities say was part of a scheme to defraud the Cuyahoga Heights School District out of millions of dollars was arraigned Tuesday after being captured in Spain, more than four years after a grand jury charged him.

David Donadeo, 43, has been wanted on a federal warrant since April 2013. Federal prosecutors say he and others formed companies and worked with former school district technology director Joseph Palazzo to defraud the school district out of more than $3.3 million by billing for services that were never provided.

Donadeo arrived in Cleveland from Spain on Friday. He was living in the Canary Islands and was arrested by authorities there in September, said John McCaffrey, his attorney.

Donadeo pleaded not guilty Tuesday to mail fraud and money laundering conspiracy charges before U.S. Magistrate Judge David Ruiz. He has agreed to stay in jail until his case is completed.

McCaffrey said Donadeo’s wife and two children still live in Spain. He said the family, all U.S. citizens, lived in Germany before Spain and had lived out of the U.S. prior to his indictment.

Donadeo’s parents sat in the viewing gallery and their faces lit up when two deputy U.S. marshals brought him into the courtroom. Donadeo and his parents mouthed some words to each other prior to his arraignment.

The indictment says Donadeo, who also goes by David Rupp, founded a company called DDR Technology that provided no services to the small suburban district yet still sent the district invoices.

Palazzo paid the invoices. Donadeo and the others kept half the money for themselves, while the other half went to Palazzo.

The scheme was uncovered by the Ohio Auditor’s Office in 2012. Auditor Dave Yost said at the time that the stolen amount was “one of the largest findings for recovery” that his office has ever issued.

Palazzo, 35, is serving a prison sentence of more than 11 years.

Dominick Palazzo, Joseph’s 43-year-old brother, was sentenced in June to 2 1/2 years in prison for his role.

Dennis Boyles, another defendant, served a 27-month prison sentence.

In addition to Cuyahoga Heights, the 900-student district serves Valley View and Brooklyn Heights.