Evans Civil Forfeiture Complaint

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UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF OHIO

WESTERN DIVISION
UNITED STATES OF AMERICA,

PLAINTIFF,
CASE NO. l:15-cv-785
v.
A 2011 MACK GRANITE SERIES
GU713 TRUCK, VIN#

1M2AX09C5BM009801, WITH ALL
ATTACHMENTS THEREON,
DEFENDANT 1,
AND
A 2011 MACK GRANITE SERIES

GU713 TRUCK, VIN#
1M2AX09C7BM009802, WITH ALL

ATTACHMENTS THEREON,
DEFENDANT 2.
VERIFIED COMPLAINT FOR FORFEITURE IN REM
Plaintiff the United States of America alleges the following for its action
against
the
defendants
in
accordance
with
Supplemental
Rule
G(2)
of the
Supplemental Rules for Admiralty or Maritime Claims and Asset Forfeiture Actions,
28 U.S.C. App. ("Supplemental Rules") and the Federal Rules of Civil Procedure.
NATURE OF THE ACTION
1.
This is a civil action in rem. brought to enforce 18 U.S.C. 981(a)(1)(A),,
which provides for the forfeiture to the United States of:
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Any property, real or personal, involved in a transaction or attempted

transaction in violation of section 1956, 1957 or 1960 of this title , or any
property traceable to such property.
and/or 981(a)(1)(C), which provides for the forfeiture to the United States of:
Any property, real or personal, which constitutes or is derived from
proceeds traceable to a violation of section 215, 471, 472, 473, 474, 476,
477, 478, 479, 480, 481, 485, 486, 487, 488, 501, 502, 510, 542, 545, 656,
657, 842, 844, 1005, 1006, 1007, 1014, 1028, 1029, 1030, 1032, or 1344
of this title or any offense constituting "specified unlawful activity" (as

defined in section 1956(c)(7) of this title), or a conspiracy to commit
such offense.
THE DEFENDANTS IN REM
2.
Defendant 1 is a 2011 Mack Granite Series GU713 Truck,
YIN 1M2AX09C5BM009801, with all attachments thereon.
3.
Defendant 2 is a 2011 Mack Granite Series GU713 Truck, YIN
1M2AX09C7BM009802, with all attachments thereon.

JURISDICTION AND VENUE
4.
the
Plaintiff brings this action in rem in its own right to forfeit and condemn
defendants.
This
Court
has
subject
matter jurisdiction over
an
action
commenced by the United States under 28 U.S.C. 1345, and over an action for
forfeiture under 28 U.S.C. 1355(a).
This Court also has jurisdiction over this
particular action under 18 U.S.C. 981(a)(1)(A) and/or 18 U.S.C. 981(a)(1)(C).

Upon the filing of this complaint, the plaintiff requests that the Clerk issue an arrest
warrant in rem pursuant to Supplemental Rule G(3)(b)(i), which the plaintiff will
execute
upon
the
defendant
Supplemental Rule G(3)(c).
property
pursuant
to
28
U.S.C.
1355(d)
and
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5.
Venue is proper in this district pursuant to 28 U.S.C. 1355(b)(1)(A)
because the acts or omissions giving rise to the forfeiture occurred in the Southern
District of Ohio.
6.
Based upon probable cause, the defendant property was seized on land
while located within the jurisdiction of this Court.

BASES FOR FORFEITURE
A.
Ergon and Evans Landscaping
7.
The defendants are subject to forfeiture pursuant to 18 U.S.C.
981(a)(1)(A) because the defendants constitute property involved in a transaction or

an attempted transaction in violation of 18 U.S.C. 1957 (money laundering), or are
property traceable to such property,
8.
The defendants are subject to forfeiture pursuant to 18 U.S.C.
981(a)(1)(C) because the defendants constitute or are derived from proceeds traceable
to one or more violations of 18 U.S.C. 1341 (mail fraud), 1343 (wire fraud), and/or
1349 (conspiracy) to commit such offenses.
9.
Ergon Site Construction LLC ("Ergon") has been registered with the
State of Ohio as a Limited Liability Company since April 2010.
Ergon's business
includes the demolition of residential homes and other commercial structures.
Ergon also performs excavation, hauling and trash removal services.
10.
Ergon has been certified as a Small Business Enterprise (SBE), or a
variation of, in multiple cities across the state.
Ergon has also been certified as
Minority Business Enterprise (MBE) with the State of Ohio.
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11.
("Jordan").
The listed owner and president of Ergon is Korey D. Jordan Sr.
Prior to Ergon's formation, Jordan worked in the information technology
field and owned an information technology consulting firm.

12.
Evans Landscaping, Inc. is a multimillion dollar for-profit corporation
offering landscaping, demolition, transportation and waste removal services.
The
company's owner and current president is Douglas L. Evans.

13.
According to bank records, Ergon -was started in approximately
September 2008 with a business operating account.
14.
Evans Landscaping provided the startup financing for Ergon in the
amount of $85,000.
15.
On September 19, 2008, a trade name was filed with the Ohio Secretary
of State for "Ergonsite Construction" in which Ergonsite is used as one word.

date of first use was recorded as September 9, 2008.
The
The Ohio Secretary of State
records indicate that the approval certificate for the Ergonsite Construction trade
name was sent to 7973 Broadwell Road, Cincinnati, Ohio, which is owned by B.E.E.
Holdings (a Doug Evans-affiliated company utilizing the address of 3700 Round

Bottom Cincinnati, Ohio 45244).
16.
On April 10, 2010, Ergon filed their Ohio Secretary of State Articles of
Organization for a Domestic Limited Liability Company under the current operating
name of Ergon Site Construction, claiming an effective date of September 9, 2008.

The approval letter for the Articles was sent to 7968 Broadwell Road, Cincinnati,
Ohio, which is also owned by B.E.E. Holdings.
The statutory agent listed for Ergon
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was Maurice Patterson, using the address of 4229 Round Bottom, Cincinnati 45244.
4229 Round Bottom Road is used as an operating office for Evans Landscaping and is
also owned by B.E.E. Holdings.
Patterson, the statutory agent for Ergon, was the
Chief Financial Officer (CFO) of Evans Landscaping at the time.

17.
In August 2010, Ergon purchased the defendants.
18.
On or about October 15, 2010, Ergon received a line of credit ending in
x3953 from PNC in the amount of $500,000.
Doug Evans, on behalf of Evans
Landscaping, provided a guaranty for the Ergon line of credit.
The Ergon loan was
approved based, in whole or in part, on this personal guaranty,
19.
The PNC line of credit was used for Ergon's purchase of the defendants.
Specifically, on December 2, 2010, Ergon took a $172,000 advance on the line of

credit and used the funds to repay Evans Landscaping, which had advanced Ergon
the money needed to pay for the defendants.
Additional amounts were paid from
the PNC line of credit to pay for signi ficant attachments to the defendants.
As such,
the PNC line of credit acted as a loan to allow Ergon to purchase the defendants.
20.
Payments on the PNC line of credit were made by Ergon using proceeds
of the fraudulent and otherwise criminal acts described in this Complaint.
Such
payments were, at times, made in amounts exceeding $10,000.
21.
Evans Landscaping managed transfers of funds into and out of the
Ergon bank account.
Moreover, Jordan regularly sought permission from Evans
Landscaping executives for the approval of Ergon expenses, and Ergon's bookkeeping
functions were maintained on Evans Landscaping's computer system by an Evans
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Landscaping employee.
22.
Ergon provided Evans with signed blank checks so that Evans was able
to make payments from Ergon's account.
Further, at times, Ergon was required to
request checks and/or authorization from Evans Landscaping's executives to pay its
personnel.
At times, Evans Landscaping also directed the hiring and firing of Ergon
personnel.
B.
Fraudulent Acquisition of Business from the City of Cincinnati

23.
The City of Cincinnati is a government agency as that term is defined in
Title 18, U.S.C. 666(d)(2).
The City of Cincinnati receives benefits from the federal
government in excess of $10,000 per year under a federal program involving a grant,
contract, subsidy, loan, guarantee, insurance, or other form of Federal assistance.

24.
("SBE").
The City of Cincinnati has a program for small business enterprises
The purpose of Cincinnati's SBE program is to promote the economic
welfare of the people of the City of Cincinnati, to mitigate the effects of

discrimination against SBEs, and to promote full and equal business opportunity for
all persons doing business with the City of Cincinnati by assisting SBEs to actively
participate in the city's procurement process, and by working to eliminate SBE

discrimination in public markets.
The SBE program is administered by Cincinnati's
Office of Contract Compliance.
25.
Through the SBE program, the City of Cincinnati allows certified SBEs
to match the lowest bid of any non-certified companies when competing for selected
contracts offering small businesses a significant advantage over larger entities.
In
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addition, for purchases of more than $5,000 but less than $50,000, the City contract
must be awarded to an SEE listed in the commodity code, unless certain exceptions
apply.
26.
Pursuant to Chapter 323 of the Cincinnati Municipal Code, an SEE
must, among other qualifications, perform a commercially useful function, be

certified by the city, and meet the definition of independent ownership and control.
27.
"Commercially Useful Function" under Code Section 323-1-Cl means
that the company is "directly responsible for providing the supplies or services to the
City."
That means that the company is "responsible for the execution of a distinct
element of the work" and carries out its responsibilities "by actually performing,
managing and supervising the work involved."
28.
The City of Cincinnati further defines "Independent Ownership and
Control" in Section 323-1 as meaning the "degree to which owners of the SEE
participate in and are capable of participating in the decisions affecting day-to-day

operations of the business... without relying upon others who are not owners or
employees of the SEE."
29.
On December 3, 2010, the City of Cincinnati Office of Contract
Compliance received a SEE Program Application on behalf of Ergon.
The
application indicated Ergon was a construction company and the activities of the firm
included the following: "hauling, excavation, recycling, demolition, site prep, paving,
sidewalk repair, sewer tapper, material transport."
At this time, the only
equipment listed in possession of Ergon were the two defendants.
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30.
On the application, Ergon listed only two employees, both were
previously employed with Evans or related companies.
31.
On or about February 4, 2011, Jordan represented to the City of
Cincinnati he did not have any outstanding loans on the business (Ergon) despite
having a significant outstanding line of credit balance.
At no time during the SEE
approval process did Jordan disclose the startup funds provided by Evans
Landscaping, the funds initially provided by Evans Landscaping to purchase the

defendants, the PNC line of credit, or the fact that the PNC line of credit was
provided through Doug Evans' personal guaranty.
32.
On February 8, 2011, Ergon was granted SEE status with the City of
Cincinnati.
33.
After becoming a certified SEE with the City of Cincinnati, Ergon was
awarded more than $2,000,000 worth of demolition contracts from the City.
34.
According to City of Cincinnati documents, the funds awarded to Ergon
have been comprised of Neighborhood Stabilization Program (NSP) funds,
Community Development Block Grant (CDBG) funds, Moving Ohio Forward funds
and Cincinnati's own Capital Funds.
35.
A significant portion of the contracts have been below $50,000, so the
contract must be awarded to an SEE unless certain exceptions apply.

36.
After Ergon began receiving demolition contracts from the City,
approximately $2,020,754 was transferred from Ergon's bank account to Evans

Landscaping.
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37.
It is believed that Evans Landscaping orchestrated the Ergon bids and
performed nearly all of the work obtained by Ergon nnder the City of Cincinnati
contracts in an attempt to fraudulently obtain, among other funds, the funds from
SEE contracts identified in the above paragraph.
38.
It is also believed that Ergon and Evans Landscaping conspired to
fabricate a false list of equipment in an attempt to induce the City's business and
obscure the true nature of their financial arrangement.
C.
Fraudulent Utilization of the State of Ohio's EDGE Program

39.
The State of Ohio has established an Encouraging Diversity,
Growth, and Equity program ("EDGE") through Ohio Administrative Code

123:2-16 for minority business enterprises.
Companies can participate in the
EDGE program if they meet the requirements set forth in OAC 123:2-16 and
are owned by an individual who is economically and socially disadvantaged.
40.
Certain public construction contracts in the State of Ohio provide
incentives and bidding advantages to contractors who subcontract a certain

percentage of the work to certified EDGE Contractors.
41.
Ergon was certified by the State of Ohio as an EDGE program
participant on or about January 5, 2011.
42.
On or about March 17, 2010, Ergon submitted a Unified
Application with the State of Ohio to obtain certification as a MBE and EDGE
participant.
Ergon indicated under the signature authority portion of the
application that it didn't need approval or didn't report to amdrndy for the
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Purchases of Major Items or Supplies, Bonding, and Financial Decisions,

among other areas.
43.
Contrary to that representation, Jordan regularly sought
permission from Evans Landscaping's executives to, among other things,

make company purchases.
44.
Jordan also failed to disclose that employees of Evans
Landscaping were able to make financial decisions regarding Ergon, including

the decision to transfer large sums of money in and out of Ergon's bank
accounts.
45.
Jordan also failed to disclose that he did not maintain his own
bookkeeping and in fact relied upon Evans Landscaping for this function,
46.
Beginning in early 2011 and continuing through at least 2014,
Evans Landscaping listed Ergon as the participating EDGE contractor on
numerous public contracts, including school construction projects.
In that
documentation, Evans Landscaping falsely represented: (1) that Ergon was

used as the EDGE subcontractor for the job; (2) that Ergon performed the
listed services; and (3) that Ergon was paid the specified contract amounts.
47.
Based on the close affiliation of the two companies, it is believed
that Evans Landscaping continued to utilize Ergon in name as a

subcontractor on large school demolitions knowing that Ergon did not have
the resources or personnel to perform the required functions. This allowed

Evans Landscaping to avoid the cost of a legitimate EDGE subcontractor,
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potentially created higher profit margins, and/or allowed Evans Landscaping

to bid more competitively.
48.
For example, on multiple occasions, Evans Landscaping
employees were observed performing work with Ergon equipment (often, the
defendant trucks).
The observed work performed by Evans Landscaping is
believed to be projects that were certified as having been assigned to, and
performed by, Ergon as the EDGE subcontractor.
D.
Summary
49.
of $500,000.
Ergon received a line of credit ending in x3953 from PNC in the amount
The PNC line of credit was used to fund Ergon's purchase of the
defendants and to fund the purchase of significant attachments to the defendants.

50.
Over time, payments on the PNC line of credit were made by Ergon
using proceeds of the fraudulent and otherwise criminal acts described in this
Complaint.
Moreover, such payments were, at times, made using proceeds in
amounts exceeding $10,000.
51.
In September 2014, the defendants were purportedly transferred from
Ergon to Evans Transport Inc., a company that is affiliated with and shares common
ownership with Evans Landscaping.
While the titles to the defendants claim that
Evans Transport paid Ergon $50,000 per truck for a total of $100,000, it is believed
that the funds were never transferred from Evans to Ergon,
WHEREFORE, the plaintiff respectfully requests that;
(a)
the Court find there is probable cause to believe that the defendants
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have been forfeited to the United States pursuant to 18 U.S.C. 981(a)(1)(A) and/or
18 U.S.C. 981(a)(1)(C):
(b)
pursuant
to Rule
G(3)(b),
Supplemental Rules
for Admiralty or
Maritime Claims and Asset Forfeiture Actions, 28 U.S.C. App. (Supplemental Rules),
the Clerk issue a warrant of arrest in rem directing the United States to arrest and
seize the defendant property and to retain the same in his custody subject to further
order of the Court;
(c)
the Court, pursuant to Rule 0(4), Supplemental Rules, direct the
United States to give notice to all persons and entities having an interest in the
defendant property to assert in conformity with the law a statement of any interest
they may have, including notice by publication on the official government website,
www . forfeiture . gov for 30 consecutive days;
(d)
the forfeiture of the defendant property to the United States be
confirmed, enforced, and ordered by the Court;
(e)
the Court thereafter order the United States to dispose of the defendant
property as provided by law; and
(f)
the Court award plaintiff all other relief to which it is entitled,
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including the costs of this action.
Respectfully submitted,
CARTER M. STEWART
United States Attorney
s/ Matthew J. Horwitz
MATTHEW J. HORWITZ (0082381)
Assistant United States Attorney
Attorney for Plaintiff

221 East Fourth Street, Suite 400
Cincinnati, Ohio 45202
513-684-3711
(fax) 513-684-6972
Matthew.Horwitz@usdoj.gov
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VERIFICATION
I, Special Agent Matthew J. DeBlauw, hereby verify and declare under the
penalty of perjury that I am a Special Agent with the Federal Bureau of
Investigation, Cincinnati Field Division, that I have read the foregoing Verified
Complaint in rem and know the contents thereof, and that the matters contained in
the Verified Complaint are true to my own knowledge, except those matters herein
stated to be alleged on information and belief and as to those matters, I believe them
to be true.
The sources of my knowledge and information and the grounds of my belief are
the official files and records of the United States, information supplied to me by other
law enforcement officers, as well as my investigation of this case.
I hereby verify and declare under the penalty of perjury that the foregoing is
true and correct.
Dated: December 10, 2015

Matthew J. DeBlauw
Special Agent, Federal Bureau of

Investigation,
Cincinnati Field Division

Evans Civil Forfeiture Complaint

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UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF OHIO

UNITED STATES OF AMERICA,

A 2011 MACK GRANITE SERIES

GU713 TRUCK, VIN#

A 2011 MACK GRANITE SERIES

1M2AX09C7BM009802, WITH ALL

VERIFIED COMPLAINT FOR FORFEITURE IN REM

This is a civil action in rem. brought to enforce 18 U.S.C. 981(a)(1)(A),,

which provides for the forfeiture to the United States of:

Any property, real or personal, involved in a transaction or attempted

of this title or any offense constituting "specified unlawful activity" (as

Defendant 1 is a 2011 Mack Granite Series GU713 Truck,

YIN 1M2AX09C5BM009801, with all attachments thereon.

Defendant 2 is a 2011 Mack Granite Series GU713 Truck, YIN

1M2AX09C7BM009802, with all attachments thereon.

matter jurisdiction over

forfeiture under 28 U.S.C. 1355(a).

This Court also has jurisdiction over this

particular action under 18 U.S.C. 981(a)(1)(A) and/or 18 U.S.C. 981(a)(1)(C).

Supplemental Rule G(3)(c).

Venue is proper in this district pursuant to 28 U.S.C. 1355(b)(1)(A)

while located within the jurisdiction of this Court.

Ergon and Evans Landscaping

The defendants are subject to forfeiture pursuant to 18 U.S.C.

981(a)(1)(A) because the defendants constitute property involved in a transaction or

The defendants are subject to forfeiture pursuant to 18 U.S.C.

1349 (conspiracy) to commit such offenses.

State of Ohio as a Limited Liability Company since April 2010.

includes the demolition of residential homes and other commercial structures.

Ergon also performs excavation, hauling and trash removal services.

Ergon has been certified as a Small Business Enterprise (SBE), or a

variation of, in multiple cities across the state.

Ergon has also been certified as

Minority Business Enterprise (MBE) with the State of Ohio.

The listed owner and president of Ergon is Korey D. Jordan Sr.

Prior to Ergon's formation, Jordan worked in the information technology

field and owned an information technology consulting firm.

Evans Landscaping, Inc. is a multimillion dollar for-profit corporation

offering landscaping, demolition, transportation and waste removal services.

company's owner and current president is Douglas L. Evans.

According to bank records, Ergon -was started in approximately

September 2008 with a business operating account.

Evans Landscaping provided the startup financing for Ergon in the

of State for "Ergonsite Construction" in which Ergonsite is used as one word.

The Ohio Secretary of State

Holdings (a Doug Evans-affiliated company utilizing the address of 3700 Round

name of Ergon Site Construction, claiming an effective date of September 9, 2008.

The statutory agent listed for Ergon

also owned by B.E.E. Holdings.

Patterson, the statutory agent for Ergon, was the

Chief Financial Officer (CFO) of Evans Landscaping at the time.

In August 2010, Ergon purchased the defendants.

On or about October 15, 2010, Ergon received a line of credit ending in

x3953 from PNC in the amount of $500,000.

Doug Evans, on behalf of Evans

Landscaping, provided a guaranty for the Ergon line of credit.

The Ergon loan was

approved based, in whole or in part, on this personal guaranty,

Specifically, on December 2, 2010, Ergon took a $172,000 advance on the line of

Additional amounts were paid from

of the fraudulent and otherwise criminal acts described in this Complaint.

payments were, at times, made in amounts exceeding $10,000.