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Law firm OKs $3M payment to city following corruption-case plea by former firm attorney

Posted Nov 19, 2013 1:40 PM CDT
By Martha Neil

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Without admitting wrongdoing, an Ohio law firm has agreed to pay $3 million to a city it formerly represented after a federal and state corruption probe of onetime attorney of the firm.

The agreement by Vorys, Sater, Seymour & Pease to disgorge $2 million in attorney fees and reimburse the city of Lorain for investigative costs was accepted by the city council Monday. It relates to representation of Lorain by former law firm attorney Anthony Calabrese III, who was sentenced to nine years in prison after pleading guilty to federal and state charges concerning claimed corruption in Cuyahoga County, the Chronicle-Telegram reports.

The city's former director of community development, Sanford “Sandy” Prudoff, who worked with Calabrese, was federally convicted last year and sentenced to two years, according to the Morning Journal. However, the Morning Journal reported several months ago that he has pleaded not guilty in a state corruption case.

Another law firm, Jeffries, Kube, Forrest & Monteleone, is being paid over $750,000 to look into a potential civil case against Vorys Sater that apparently was never filed by the city of Lorain, according to the Chronicle-Telegram.

"The available evidence indicates that a pattern of unfortunate and financially injurious corrupt activity permeated the representation of the City prior to the formal inception of the legal relationship and continuing through 2009,” Jeffries, Kube said in a December 2012 letter to Vorys. “A partner in your firm appears to have been the engineer of and willing participant in this continuing enterprise and the Vorys partnership profited as a result. The conspiracy included clear breaches of fiduciary duty and was also intended to defraud the citizens of the City.”

The Cleveland law firm served as bond counsel to Lorain for nearly a decade, the Morning Journal notes. Confidential mediation over a period of more than six months resulted in the $3 million settlement agreement.

Related coverage:

ABAJournal.com (Sept. 2009): "2 Lawyers Charged in Alleged Government Property Valuation Scheme"

ABAJournal.com (Sept 2009): "Vorys Sater Documents Subpoenaed in Expanding Ohio Probe"

ABAJournal.com (Oct. 2009): "Lawyer Pleads in Appraisal Bribe Scheme; Prosecutors Seek $3.2M Restitution"

Chronicle-Telegram (June 2013): "Attorney sentenced to nine years in corruption probe"

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