“My goal is to recover 100 percent of the money and that’s what I’m working to do.” – Prosecutor Jim Flaiz
Geauga County’s former IT director and his daughter orchestrated a scheme to steal more than $1.8 million in public funds over an eight-year period, Prosecutor Jim Flaiz said during a Jan. 29 press conference.
Both Stephen T. Decatur, 59, and his daughter, Stephanie E. Stewart, were charged in 334-count indictments filed in Geauga County Common Pleas Court alleging they engaging in a pattern of corrupt activity and aggravated theft, both first-degree felonies, from Feb. 1, 2010, through Oct. 25, 2017.
There are also counts for theft in office, money laundering — 322 counts — and having an unlawful interest in a public contract as well as telecommunications fraud and receiving stolen property.
Decatur and Stewart primarily used the stolen funds for daily living expenses, Flaiz said.
Specific counts against Stewart, 35, of Akron, include complicity to commit theft in office and complicity to having an unlawful interest in a public contract, according to her indictment.
She was arrested at her home Monday morning and currently is jailed at the Geauga County Safety Center.
“The case is still being investigated, but we’ve taken steps not only to prosecute the wrongdoers but also recover the taxpayer money that has been stolen,” Flaiz said, noting the grand jury continues to be empaneled. “We are committed to prosecuting both the people who have been indicted, and I do expect there will be additional indictments in the future.”
Flaiz explained many people have helped investigate the case.
“This was extremely difficult to investigate because we could not use our computers to investigate it,” he said. “Because Mr. Decatur had control over all of the county’s computer systems, we could not utilize any electronic means within our network to perform the investigation.”
Also, because Decatur worked in the auditor’s office, Flaiz said they could not go through the auditor’s office to obtain information regarding vendor payments and other bank issues.
Said Flaiz, “We did not want to tip off any subjects of the investigation.”
Geauga County Treasurer Chris Hitchcock’s office was singled out for spending an “enormous amount of time” helping to compile the illegal transactions — hundreds of them, Flaiz said — and banking information.
Rick Warner, an investigator in Flaiz’s office who specializes in solving electronic crimes, drew praise as well.
“His specialized skill set was critical in investigating this matter and processing the hundreds of thousands of emails and other electronic data we’ve had to go through to get our case established,” Flaiz said.
The prosecutor said Decatur’s Ohio Public Employees Retirement System’s pension account has been frozen, a claim has been filed with the county’s insurance carrier and, because racketeering charges are involved, liens are being filed against real estate Decatur and Stewart own in Cuyahoga and Summit counties, respectively.
“My goal is to recover 100 percent of the money and that’s what I’m working to do,” Flaiz said.
In September 2017, Flaiz said an employee in the Geauga County Auditor’s Office alerted his office about “irregularities” relating to an IT vendor, SMCS Tech LLC, of Fairlawn, with which the county was doing business.
“Over the course of about a year, the county had paid this vendor approximately $260,000 for IT services,” Flaiz said, explaining his office immediately opened an investigation into SMCS Tech.
“It was quickly determined that the owner and operator of this company . . . was, in fact, our IT director’s daughter, Stephanie Stewart,” the prosecutor said.
SMCS appears to exist on paper only, he added.
Flaiz said his office retained the accounting firm Skoda Minotti to perform a forensic audit of the transactions.
“During this investigation, the prosecutor’s office determined Mr. Decatur . . . had diverted money to his daughter and himself through a series of invoices and bank transactions,” Flaiz said.
Special prosecutor Brian T. Kostura, a partner at the law firm McGlinchey Stafford, is pursuing a separate investigation into the auditor’s office, including how and why the bills were paid and how these services were obtained without contracts and without competitive bidding, Flaiz added.
“As public officials, one of the numbers that’s burned into our head is $50,000,” he said. “If you’re spending $50,000 or more, you need to go through a bidding process. That’s really to protect taxpayer funds.”
An aggregate amount of money was paid to two different vendors that greatly exceeded $50,000, he said.
“In many instances, invoices were paid on the same day that exceeded $50,000 to a single vendor,” Flaiz noted, deferring those issues to the special prosecutor. “But it does appear that competitive bidding was circumvented.”
He added, “There’s also laws that require other approvals for IT expenditures and those laws were not followed either.”
The prosecutor declined to identify the second IT vendor the county did business with, citing the ongoing grand jury investigation.
“When we began investigating SMCS and we pulled all their bank records, we found payments from this other vendor to SMCS,” Flaiz explained. “So, what was discovered in investigating SMCS is that a long time ago, approximately eight years ago, a system was set up by the IT director where the county was utilizing a legitimate company and then that company was directing monies to his daughter’s company.”
In most instances, Flaiz said the second vendor did not perform any work and Decatur performed any work SMCS performed.
“So, what we have here is a situation where, as the IT director, he’s directing monies to subcontractors which are ending up in his pocket,” said Flaiz. “In some instances no work was performed or our employees in house were already performing that work.”
According to an affidavit for search warrant filed in Chardon Municipal Court as part of the special prosecutor’s investigation, Warner found evidence Decatur and parties at the out-of-state IT company — where Decatur had once worked — engaged in “competitive bid rigging.”
That warrant and affidavit have since been sealed.
Geauga County Sheriff Scott Hildenbrand reiterated Decatur was the county’s chief technology officer.
“He had all the keys to the kingdom,” Hildenbrand said. “He affected every one of the offices in the county. We all had to get permission to do things through him and he had all the control over this, so this has affected everybody.”
Several years ago, Hildenbrand also explained computers had been purchased for all police cars and fire trucks in the county.
“When we went to deploy those computers, there was one missing,” he said, noting each computer cost around $3,500. “That computer was located at his (Decatur’s) house when we did the search warrant.”
Decatur also told stories about being employed at the United States Department of Homeland Security — another lie — Hildenbrand said, adding a Homeland Security sticker was even affixed to the stolen computer.
Decatur, who was arrested in October, posted a $25,000 bond after his initial court appearance and currently is out of jail with a monitoring bracelet.
No other court appearances for either Decatur or Stewart have been scheduled.
