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Solon goes after swindled millions
(by Sue Reid - November 23, 2011)
Solon goes after swindled millions
By SUE REID
Following an executive session Monday, Solon City Council approved a motion for Law Director Thomas G. Lobe to initiate a lawsuit in the Cuyahoga County Court of Common Pleas against the insurance company employed by the city when the swindling of $2.4 million occurred.
In an effort to recoup those damages, the city is planning to file suit against Selective Insurance, which the city had a theft policy with. They have declined to pay in this case.
Mr. Lobe will go after Selective Insurance for an insurance bad faith claim due to their denial of the claim. The city paid premiums to Selective Insurance. The policy limit is $500,000.
A second action as part of the motion will be for Mr. Lobe to go after the bonding companies for Chaney Cement Contractors and MGL Enterprises Inc. that performed certain work on the road project that drew complaints regarding the quality of work. The city is going to attempt to seek contractual claims for them to pay.
"The goal is to recoup the loss," Councilman Edward H. Kraus said.
Mayor Susan A. Drucker said she appreciated council's vote to go after the insurance and bonding companies.
"We will go after any and all parties privy to this matter," Mrs. Drucker said. "It is my duty to go after this money. There is a strong possibility we will bring further action.
"I will see to it that we collect as much" as possible of the money that was stolen, she said.
Following the release of a special audit last year, it was determined that the city was overcharged and swindled out of $2.4 million by contractors Midwest Paving, Chaney Cement Contractors and MGL Enterprises Inc. The special audit was requested by the city in 2007, when complaints arose associated with the quality of the job. It was determined that the city was overcharged.
Ex-city employee Dominic Bisesi, who approved many of the bills in question, pled guilty recently to theft in office and filing false tax returns. He was sentenced by Judge David Matia to 14 days in the Cuyahoga County Jail and must also pay restitution to the city in the amount of $84,000.
He also received five years probation and had to pay court costs.
Mrs. Drucker said that the $84,000 being paid to the city is an "insult.
The mayor said "$2.3 million is only what can be proven. If we can't collect from the insurance and bond company, we will go further."
Mrs. Drucker said she inherited this "mess" when she took office, but that she and her administration will clean it up and go down every avenue to rectify the situation.
Selective Insurance is just one of the insurance companies used by the city. The city has various insurance carriers for different types of coverage, Assistant Finance Director Fred Wendel said.
"I want the insurance and bonding companies to pay as they should be," Mrs. Drucker said. "I'm not sitting back. I'm mad about this and will not sit back and take it lightly."
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