Ex-execs’ defense covered by insurance
One of JEA's insurance firms paid nearly $9 million to finance the legal defense of ex-CEO Aaron Zahn and CFO Ryan Wannemacher throughout their trial on federal conspiracy and wire fraud charges, according to a February invoice, a financial arrangement JEA officials objected to years ago but nonetheless continued through the conclusion of the case.
The $8.93 million paid by AEGIS Insurance Services through February could grow since the sprawling trial stretched from late February into midMarch. A jury convicted Zahn of a conspiracy to steal municipal funds and of wire fraud; a separate jury acquitted Wannemacher on both charges.
It's not clear how much of the nearly $9 million is attributable to each former executive. The invoice only lists the total paid out.
JEA has for years carried insurance that provides coverage for executives and board members accused of “wrongful acts” while acting in their official capacity, like accusations of neglect or breach of fiduciary duties. For years, though, board materials have explicitly described any “deliberately fraudulent, dishonest, criminal or malicious act or omission or any knowing and intentional violation of any statute or regulation” as falling outside the policy's coverage.
Zahn requested coverage in 2020 while ensnared in various civil fights over his tenure at JEA: a City Council-led investigation into his project to privatize JEA, arbitration over his firing by the board, and a lawsuit JEA filed against Zahn accusing him of defrauding the agency. At the time, JEA officials objected to AEGIS covering Zahn's legal expenses, but the firm determined that Zahn's employment contract entitled him to coverage. The firm told JEA that since Zahn's “alleged wrongdoing has not to date been established by any court or tribunal,” JEA was required to cover Zahn's costs up to $250,000, with AEGIS picking up the tab for any amount above that.
It's not clear if JEA ever paid that amount or if AEGIS did and plans to recoup it later from the utility. JEA was still researching answers to various questions I'd posed after receiving the February invoice, though the agency did say it would be uninvolved in any decision AEGIS makes about recouping any portion of the money it fronted for Zahn.
It's also unclear if AEGIS plans to claw back the money it fronted for Zahn's legal defense. Were it to do so,
video and photos that Thompson had produced in June 2019, according to the U.S. Attorney's Office.
Investigators also interviewed three boys who revealed further confirmation involving sexual abuse. The children were 7, 8 and 10 years old at the time.
In July 2019, Thompson fled to the Philippines where his passport was revoked, and he was deported in January 2020. The FBI arrested him when he was brought back to the U.S.
Further investigation revealed he had sexually exploited two additional children, including one Thompson encountered as he was fleeing from prosecution in July 2019, the U.S. Attorney's Office said.
“This case exemplifies the unrelenting tenacity of investigators who pursue justice for innocent victims of crime,” said Coult Markovsky, FBI Jacksonville's acting special agent in charge. “Samuel Thompson repeatedly abused and exploited innocent children, inflicting immeasurable hurt on his victims. He also abused and exploited his employer by installing malicious software to manipulate their systems, which could have caused significantly more damage if not detected. Let this sentence serve as a pledge to all victims of crime that the FBI and our partners will doggedly pursue those who prey on them.”
Several other agencies contributed to the investigation.