Mu­nic­i­pal elec­tric of­fi­cials in­dicted for mis­use of funds

Greenwich Time - - FRONT PAGE - By Luther Turmelle COURTS luther.turmelle@hearst­medi­act.com

Two ex­ec­u­tives of the Nor­wich-based Con­necti­cut Mu­nic­i­pal Elec­tric En­ergy Corp. and three present or for­mer mem­bers of the or­ga­ni­za­tion’s board of di­rec­tors have been charged with of­fenses re­lated to the mis­use of fed­eral funds, ac­cord­ing to in­dict­ments un­sealed Thurs­day.

CMEEC is a pub­lic cor­po­ra­tion that that runs util­ity ser­vices in Nor­wich where it is based and in the east­ern Con­necti­cut mu­nic­i­pal­i­ties of Gro­ton, Jewett City, Bozrah; as well as in Nor­walk through South Nor­walk Elec­tric & Water and the Nor­walk Third Tax­ing Dis­trict, which each have rep­re­sen­ta­tives on CMEEC’s board.

Drew Rankin, CMEEC’s chief ex­ec­u­tive of­fi­cer, and Ed­ward Prior, who is the or­ga­ni­za­tion’s chief fi­nan­cial of­fi­cer, were among the five in­di­vid­u­als named in in­dict­ments re­turned by a fed­eral grand jury in New Haven on Tues­day. Also named in the in­dict­ments were:

John Bilda, a Nor­wich em­ployee who rep­re­sents the city on the CMEEC board.

Ed­ward DeMuzzio, a Gro­ton res­i­dent who rep­re­sented the city on the CMEEC board and was its sec­re­tary.

James Sul­li­van, a Nor­wich res­i­dent who served on CMEEC board and was its chair­man un­til Oc­to­ber 2015.

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

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

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

The in­dict­ments in­volve the used pf more than $9 mil­lion CMEEC re­ceived from the U.S. Depart­ment of En­ergy be­tween 2010 and 2015. U.S. At­tor­ney John Durham said CMEEC’s agree­ment with its mem­bers calls for any ex­cess rev­enue to be re­turned to the com­mu­ni­ties and their elec­tric ratepay­ers.

In­stead of pro­tect­ing these funds ... 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,” Durham said in a state­ment.

The Fed­eral Bureau of In­ves­ti­ga­tion and the In­ter­nal Rev­enue Ser­vice are part of the in­ves­ti­ga­tion which led to the in­dict­ments that were re­turned.

The first in­dict­ment al­leges Rankin, Sul­li­van, Bilda, DeMuzzio and Pryor planned and or­ga­nized lav­ish trips out­side of Con­necti­cut to the Ken­tucky Derby in 2015 and 2016 and to a lux­ury golf re­sort in West Virginia. None of the trips were re­lated to CMEEC busi­ness, but were in­tended to per­son­ally ben­e­fit, com­pen­sate and re­ward the co-con­spir­a­tors, their fam­ily mem­bers, friends and as­so­ci­ates.

The trips cost more than $800,000 and in­cluded travel ex­penses, pri­vate char­tered air­fare, first-class ho­tel ac­com­mo­da­tions, meals, tick­ets to sport­ing events, golf fees, sou­venirs and gifts.

The first in­dict­ment al­leges that in Jan­uary 2015, Pryor di­rected a new ac­count be cre­ated to pay for the costs of the Ken­tucky Derby trips with­out a vote by the CMEEC board and any ap­provals from the co­op­er­a­tive’s mem­ber towns.

It is al­leged that Rankin un­der­re­ported the costs of the Ken­tucky Derby and golf 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.

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 Sul­li­van’s wife to travel to Key West, Florida, in De­cem­ber 2014.

Erik Traut­mann / Hearst Con­necti­cut Me­dia file photo

South Nor­walk Elec­tric and Water em­ploy­ees at work in June 2016 in Nor­walk.

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