CUYAHOGA COUNTY, OH – African American residents of the state’s largest county have been complaining that the county treasurer’s foreclosure process was unconstitutional and rigged against them ever since greedy Greek American lawyers James Rokakis and Gus Frangos wrote state laws to let the treasurer’s office they led sell delinquent property tax bills to third party investors in 1997.
There have been complaints that landbank employees and friends of Rokakis and Frangos have taken advantage of the public offices they hold and political relationships for their pick of the more than 100,000 homes taken from others since 2006 for pennies on the dollar or nothing. That doesn’t include the more than 40,000 homes Rokakis used his third party tax lien law to foreclose on between 1998 and 2005.
Rokakis’ Western Reserve Conservancy released a report in July 2018 showing how 80 percent of the 140,000 were black; and that more than 40 percent of people whose homes were taken were eastsiders in Cleveland, East Cleveland, Cleveland Heights, Euclid, South Euclid and University Heights.
The U.S. Department of Justice’s (USDOJ) November 28, 2018 indictment of Kenneth Tyson appears not only to confirm the truth of the suspicions; but shockingly exposes a more extensive network of public officials using their public offices to steal and repair homes; and avoid paying property taxes.
The USDOJ’s indictment of Tyson indictment identifies several players by name and initial. Demolition contractor Michael Riley is MR. East Cleveland’s chief of staff Michael Smedley is MS. Cleveland Heights Mayor Cheryl Stephens is CS. Trapp Concrete & Masonry contractor Charles Trapp is CT. Drain Guru owner Jason Strzala is JS. The two contractors only appear to be named for the work they performed.
Tyson joined Rokakis and Frangos as a “pick” of Stephens who saw the Case Western Reserve University (CWRU) law school graduate as highly-qualified for the job of project . She and Dennis Roberts, who’d come through the county’s ranks as an-ex-Commissoner Peter Lawson Jones appointee, were the agency’s visible “black faces.”
In 2016 Stephens helped Tyson write the business plan for CLRB Services as an offshoot of the Rokakis and Frangos-led landbank to handle asbestos remediation using government funds to compete with small business contractors. Tyson’s landbank offshoot picked up the bulk of the remediation work despite complaints of unfair competition from a local government insider.
The indictment outlines a 2013 scheme where Tyson used his job as a county landbank project specialist to get Riley demolition work in exchange for $6700 in free home repairs at 1210 Castleton Road in Cleveland Heights.
A civil complaint Ohio Attorney General Richard Michal DeWine filed againsr Riley details how Smedley and ex-East Cleveland Mayor Gary Norton manipulated the city’s council to give two companies Riley controlled access to landbank property at 1705 Noble Road. Instead of preparing the site for redevelopment as instructed by a resolution council passed, Riley demolished and sold off approximately $3 million in scrap steel structures General Electric had left as remnants of its lighting division.
Norton, without an ordinance of council, personally-delivered Riley title to the 1705 Noble Road property for $10 two months later. The name of the Riley company Norton delivered the property’s title to was not the same as the one named in the resolution.
It’s been alleged by Norton’s former girlfriend, Nikki, that he paid her $700 a week cash on a $40,000 a year annual salary in 2013 and 2014 after Riley started working in the city.
After selling off the scrap Riley created an illegal construction and demolition debris landfill behind residential homes and near schools at the 1705 Noble Road site and sold space to dump demolished homes at $7 a ton. That price was far below the $12 to $17 a ton at legal sites like Boyas Excavating. Ohio EPA director Craig Butler negligently allowed the deadly construction and demolition debris landfill to operate under the “guise” of it being a recycling facility that never recycled. Butler never tested the “fugitive dust” inspectors reported during 26 site visits.
It’s estimated Riley and others dumped more than 1000 landbank properties and household waste at the 5-story illegal landfill behind the homes of residents Smedley and Norton were supposed to protect. Noble Road residents said Pete & Pete Container Service, Inc. violated state dumping laws daily by sending its trucks with household waste to the illegal site. Sources say Riley could have earned anywhere from $4 million to over $10 million dumping demolished homes illegally with Norton and Smedley’s help.
Smedley and Norton avoided performing all the mayor’s legal duties to enforce the resolution that put limits on Riley’s use of the property. They, instead, directed employees, including the city’s community development and building department, to cooperate with the criminally-minded contractor’s illegal enterprise.
Instead of causing Riley to be prosecuted, Norton and Smedley delivered him no bid federally-funded demolition contracts. The same with Tyson.
The USDOJ’s indictment focuses mainly on the demolition contracts Riley was awarded through the landbank to benefit Tyson. The language of the indictment makes it clear that Riley hired contractors like Trapp and Strzala to perform work on one of 5 homes Tyson picked up for next to nothing from foreclosure sales conducted by Sheriff Clifford PInkney.
The indictment and Cuyahoga property records show Tyson constantly quit claiming each of 5 properties between his own name and that of his EPIC LIfestyle LLC while he sought property tax reductions on 3 of them from the Board of Revision his boss, James Rokakis, influenced as the county’s treasurer.
What’s not clear in the indictment is if Smedley had East Cleveland’s community development director, Melran Leach, submit documents to pay Riley in Neighborhood Stabilization Program (NSP) funds for a demolition in East Cleveland to cover Tyson’s repairs to his Cleveland Heights home. Leach did send pictures of a demolition project Riley did in East Cleveland to Stephens as proof he worked on a project. [NOTE: EJBNEWS’ publisher served as East Cleveland’s mayor, managed its community development department; and wrote the first $2.2 million NSP grant the agency received from HUD before leaving office in December 2009].
Tyson didn’t stop enriching himself with what the FBI and HUD’s inspector general uncovered in relation to his job as a landbank employee. After obtaining two foreclosed properties that were worth more than $220,000 combined in actual market value, Tyson filed a complaint with the county’s board of revision Rokakis once led and asked for a tax break.
His complaint sought the two properties valued at the $6700 price he paid for them from the sheriff’s sale. As evidence he submitted a mortgage for $62,000 with a complaint that said he’d only paid $6700 for it.
Instead of seeing the discrepancy in the two amounts, the board of revision taxed the two Tyson properties with a combined market rate value of $220,000 at a value of $6700 as he asked.
Tyson has filed another complaint to have his tax bill lowed for a foreclosed property he got free from HUD. The hearing is scheduled for January 2019.
What is highlighted are the conflicts-of-interest “extra money schemes” landbank envisioners Rokakis and Frangos created out of the misery caused by their racist-inspired and aggressive housing foreclosure practices with third party investors that began in 1998.
While the USDOJ’s indictment concentrates on the single property Riley repaired for Tyson, it doesn’t examine how he received the other four Cleveland Heights and University homes. All came from sheriff sale foreclosures. Two were given to Tyson for free out of the U.S. Department of Housing & Urban Development’s inventory of foreclosed homes.
Landbank activists like Laura McShane have long criticized Rokakis and Frangos’ sale of a property owner’s delinquent tax bill to an investor have documented transactions between the landbank and their individual friends and associates. Like Tyson, they were “given” foreclosed homes valued in excess of $100,000 and $200,000 that they moved into for next to nothing and then sold at its market rate value.
Rokakis sold the idea of selling off a property owner’s property tax bill to a third party investor at a discount in 1997 and 1998 after he was elected Cuyahoga County treasurer. He claimed it was a way to streamline the forclosure process on “abandoned” properties. What he and Frangos ended up doing until voters in 2010 voted for a charter change that restructured the county’s government and put him out of a job at the end of the year was kick over 100,000 mostly African Americans out of their “occupied” homes.
The vast majority were behind on mortgages that were rigged against them by lending institutions like Charter One Bank. African Americans with solid jobs and good credit scores were automatically steered to subprime variable interest rate mortgages instead of prime fixed rate mortages. When the subprime rates escalated it increased their monthly note and home owners living in their homes with families fell behind on their mortgage and twice-annual property tax payments.
The Western Reserve Land Conservancy Rokakis serves as vice president released its own report in November 2018 confirming that 80 percent of homeowners kicked out were African Americans; with over 40 percent coming from the east side of Cleveland and East Cleveland.
Despite knowledge that lenders like Charter One Bank had engaged in discriminatory lending practices that Rev. Al Sharpton’s National Action Network had drawn attention to with Rev. Horace Sheffield of Detroit, Michigan, Rokakis and Frangos used the new “streamlined” foreclosure process to target homeowners with tax bills of less than $2000 for foreclosure.
What should have been seen by “attorney” Tyson as a pattern and practice of racial discrimination against “his people” by racist lenders, the treasurer, prosecuting attorney and the court of common pleas, became an opportunity for him to profit off and aid them with the help of co-conspirers Rokakis, Frangos and Cheryl Stephens.