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Friday, August 7, 2009
Love lost $1 million in Dynus collapse
Prominent Cincinnati businessman and civic leader Ross Love added his name this afternoon, Aug. 7, to the list of individuals who lost millions of dollars in Dynus Corp.
Love said he met Carter at a Christmas party in December 2003 and was impressed by the young, black Duke University graduate with a business plan to turn a struggling phone resale business into a telecom powerhouse.
“He had detailed projections that showed the business growing in the range of $30 million in sales over 5 years,” Love said.
So he invested $1 million, which he lost when the company collapsed in late 2005.
Love was formerly vice president of P&G’s advertising division who became one of the wealthiest men in the state with the 2001 sale of a string of radio stations for $200 million.
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Fifth Third Bank lost $4.3 million in Dynus scandal
A Fifth Third Bank official testified this morning on how his bank relied on purported business deals that didn’t exist to loan Dynus Corp. $13.8 million in 2004 and 2005.
Fifth Third employee David Hummel testified that Dynus owner Orlando Carter personally applied for the loans and lines of credit, including $5 million to purchase the company’s Bond Hill headquarters.
Carter also had help from prominent Cincinnati businessman Ross Love, who lost more than $1 million invested in Dynus.
Carter has pleaded not guilty to an 11-count indictment, including charges of bank fraud.
The Fifth Third loan applications signed by Carter included representations that the company had lucrative contracts with Butler County, West Chester Twp. Greensboro, Ala., and Robins Air Force Base in Georgia.
In fact, the company’s contracts with these agencies were pending at best. And former company president Jim Smith has testified that some of the contracts were actually based on forgery or fraud.
“We were led to believe it was a done deal,” Hummel said.
The application also did not include the fact that the company had borrowed $6.5 million from National City Bank in Butler County’s name without county approval.
The Fifth Third line of credit was for the operation of Dynus, and came with the stipulation that Carter not be paid more than $200,000, Hummel said.
He said he was unaware Carter had used $312,000 of the company’s money to purchase a $1.2 million mansion, spent $170,000 for a box seat on the 50-yard line of Paul Brown Stadium and Smith spent $1,366 of company money at a Hustler strip club in New Orleans.
“What happened to all these loans?” asked Assistant U.S. Attorney Richard Chema.
“We were not paid back,” Hummel replied.
“How much money has the bank lost,” Chema then asked.
“$4.3 million,” Hummel said.
The bank has a $5.6 million judgment against Carter that he is trying to have cleared through bankruptcy, Hummel said.
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Butler County budget update
Fellow reporter Rich Wilson is picking up my slack covering Butler County while I’m in court in Cincinnati for the Dynus trial. Wilson filed two stories yesterday.
Some Butler County employees not part of a collective bargaining unit will be forced to take unpaid days off to make up for lost revenue during the recession.
Butler County commissioners unanimously approved a measure Thursday night, Aug. 6, that uses furlough days in the departments that fall under the commission’s purview.
The Cost Savings Plan will reduce general fund expenses by an estimated $100,000, said county Administrator Tim Williams. The policy mandates 10 furlough days this year for 25 to 30 employees in the commissioners’ office, personnel and records offices and information services, Williams said.
Commissioners also agreed the measure should include an amendment to encourage county officeholders to implement furlough days for their employees to achieve requested budget cuts.
About $1.6 million would be cut out of the budget if the policy is implemented countywide in all general fund departments, Williams said.
Elections officials are waiting to decide where to make heavy cuts to an already lean budget.
The Butler County Board of Elections met Thursday afternoon, Aug. 6, with county Finance Director Pete Landrum to go over the latest financial projections for the elections office.
With tax revenue significantly down, county commissioners have opted to return several departments to 2007 funding levels. For the elections office, that translates to a 13.5 percent overall cut, or $332,990, from its $2.8 million budget.
“The bottom line is the county is in a hole,” Landrum said. “The big thing right now is to move forward.”
If implemented, the elections office will have cut its 2009 budget from what was originally requested in December 2008 by 40.5 percent, according to BOE Director Betty McGary.
McGary said commissioners should have worked closer with her office before deciding how much to cut from its budget.
Any thoughts on either of these issues?
