Mediaboss Marketing

WORCESTER In the fall of 2011, Joan Honig, a longtime real estate lawyer consulting for a local nonprofit, was asked to gather information about a possible rehabilitation project in Worcester.

A stalled project at 5 May St., a large buildingthe city was working with a developer to rehaul into 13 units of affordable housing, seemed like the kind of jobher client, the South Middlesex Opportunity Council, was well suited to tackle.

Honig, as is standard for such deals, visited the site and spoke with the developer and city official driving the project, with an aim of understanding how much money had been put into the building and how much cash was still needed.

Thus began a monthslong process that led to frustration, stalemate and, a decade later, a witness stand in federal court.

They had so much prior financing, and the building was unfinished, Honig, a former state housing official, told a federal prosecutor Tuesday as she detailed a succession of confusing interactions that left her wondering where the money went.

Tuesday was the seventh day of trial for Jacklyn M. Sutcivni, the former city chief of staff for economic development accused of aiding developer James E. Levin of bilking the government of $2 million in federal rehabilitation funds.

Levin is serving a 37-month prison sentence after admitting to fraud and conspiracycharges, while Sutcivni is putting her case to the jury.

Levin has not been called to testify by prosecutors, and asserted his Fifth Amendment privilege not to testify for the defense after a judge foundhe might perjure himself on the stand.

Prosecutors have spent hours asking witnesses about their dealings with Levin and Sutcivini, with lawyers for the former city official noting that many of those witnessesdealt primarily with Levin.

Honig who took great care with her wordsTuesday, pausing often to consult her old notes testified that both Sutcivni and Levin failed to deliver the financial information she needed to assess the project.

I was getting changing numbers about everything, she said, and conflicting stories.

The now-retired consultant said it appeared Levin was interested in getting something from SMOC for the building after running into funding woes.

But after visiting the building in September 2011 and seeing how little work had been done, she said she and SMOC officials wanted specifications on expenditures so they could assess how much money they might need to finish it.

Levin, with help from city officials, had secured about $2.3 million in federal grant funds for the project. The amount he hadspent depended, Honig said, on who she asked.

Honig testified that Levin indicated there was about $650,000 in funding left, but that Sutcivni had told her the funds had run dry.

While both Sutcivni and Levin cited federal law that required heightened wages for workers as a factor, Honig said that wouldnt come close to accounting for the gap between expenditures and progress.

When she pressed harder, she said, Levin alleged on a phone call that the electrician he hadhired to manage the project had drained bank accounts.

You never heard it. Dont tell anyone, Honig quoted Levin as saying as she read from her contemporaneous notes.

Levins electrician who testified last week he left the job after concerns about Levins integrity and the slow work pace was never charged or accused of wrongdoing.

Instead, prosecutors have presented evidence to jurors suggesting that Levin was under financial strain in 2011 when another city property he had taken on suffered damage that left him liable for more than $1 million in remediation.

Workers who had been hired for 5 May St. were diverted to other Levin projects, the electrician testified, and the plans for the Main South apartment building were constantly changing.

Honig said she asked both Levin and Sutcivni for specific documents relating to 5 May St. including forms showing reimbursement of worker wages and other expenses but never received most of what she had requested.

Emails entered into evidence by prosecutors memorialized the detailed requests for information Honig had lodged over a period of months. She recalled setting up a meeting at Sutcivnis city hall office in hopes of receiving further information, to no avail.

I got nothing, she told the jury.

Honig said when she pressed Levin further on where the money went, he shrugged and said it was probably his fault, and that he didnt know what happened.

She said he admitted to not understanding federal prevailing wage requirements and not being a good money manager.

By early winter of 2012, SMOC gave up on the project, Honig said, after a consultant it hired to check out the building opined it would take well over $1 million to finish.

The consultant, James Hass, testified Tuesday that he estimated about $650,000 had been put into the building as of that time, and $1.7 million more would be needed to complete the project under federal procurement guidelines.

That meant, Honig noted in her testimony, that a project initially anticipated at costing around $2 million was instead potentially going to cost double that amount.

Honig said Sutcivni had told her she estimated it would take between $400,000 and $500,000 to finish the job.

Federal agents have testified that Sutcivni told them Levin encountered unanticipated expenses with the project, and that she and other officials were working with him to get additional funding.

She allegedly told the agents she knew the expenses Levinsubmitted were not all for work he had performed, but maintained he did expend the dollar amounts.

Agents testified Sutcivni never provided proof of the claim, and have noted she, in 2010, bought a condo from a business associate of Levins that appeared to help her shirk a city residency requirement.

Dori Vecchio, the citys longtime director of human resources who left this month to become town administrator in Blackstone, took the stand Tuesday to discuss her role in processing checks to Levin.

Lawyers for Sutcivni have suggested city officials conducted poor oversight, calling what happened a systemic failure influenced by poor internal controls.

Vecchio told the jury Tuesday that she was only responsible for crunching numbers to make sure the project was on budget, not for verifying the accuracy of the reimbursement requests themselves.

Vecchio, who in 2010 was an official in the citys budget office, confirmed that she sent one request from Sutcivni back for changes after noticing an architect had not certified a figure for expenses on the required documentation.

The architect for 5 May St., Steven Petitpas, testified Monday that he hadrefused to certify the expenses because he knew not all the work was done. Emails entered into evidence showed Sutcivni advising Levin to certify the figure himself.

Vecchio said she cut the $720,000 check in question after the form was returned to her signed by Levin with the proper figure listed as certified.

When a prosecutor asked her whether she noticed Levin had signed the document both as the developer and the architect, Vecchio said she had not.

She emphasized that her role was confined to double-checking figures for instance, making sure all the itemized expenses added up to the total and said she had no reason not to trust the figuresher colleague had provided.

Vecchio said the documentation supporting the line items was supposed to be vetted and kept by Sutcivni, who worked in a different department.

Robert M. Shaw Jr., a former city inspector who worked under Sutcivni in 2010, testified Monday that he was thecity employee tasked with checking in on the projects the city was overseeing through the federal program used for 5 May St.

On cross-examination Tuesday, Shaw testified that it wasnt unusual for contractors to cross off the architect line on reimbursement forms and sign themselves.

However, as Assistant U.S. Attorney Danial E. Bennett drew out in questioning, the other projects being done at the time under the federal grant program were mostly single family residences.

Shaw left the city in November 2010 after a federal grant funding his position dried up.

Sutcivnis trial resumes Wednesday.

More: Former top Worcester housing official wore wire for FBI years before own alleged corruption

More: Via Zoom from prison, developer claims Fifth at trial of former Worcester housing official

More: Worcester housing official trial: Contractor details quitting 5 May St. job after slow pace, integrity concerns

More: Emails show developer, business partner talking about sale of condo to top city official

More: Architect on 5 May St. project refused to sign reimbursement form from developer

Contact Brad Petrishen at brad.petrishen@telegram.com. Follow him on Twitter @BPetrishenTG.

Read the original:
'You never heard it': Consultant details shifting excuses on 5 May St. financials - Worcester Telegram