Christopher Peterson, Bribery and Fraud, Ohio 2016

Macedonia, OH – Christopher Peterson, 42, was sentenced to 12 months in federal prison and fined $3,000 on October 13, 2016, following a multi-agency investigation into a decade-long scheme to defraud the Cleveland Housing Network (CHN). Peterson, owner of Top Notch Construction, pleaded guilty to his role in a bribery and illegal lead abatement operation that siphoned funds from federally-backed community development projects.

The investigation, spearheaded by the U.S. Environmental Protection Agency (EPA), alongside the FBI, HUD-OIG, and multiple Ohio state agencies, revealed a pattern of corrupt dealings between Peterson, CHN employee James Todt, and Lizandro Orellana, owner of Modern Construction Group LLC. Todt, who oversaw contract awards at CHN from 2005 to 2014, accepted bribes from both Peterson and Orellana in exchange for awarding them lucrative CHN projects. Court documents indicate Peterson paid Todt up to $10,000 in cash for the preferential treatment.

Beyond the bribery, the case unveiled alarming violations of federal environmental regulations. Orellana’s Modern Construction was contracted to perform lead-based paint abatement on several CHN properties between 2010 and 2012. However, to cut costs and expedite work, Orellana directed his employees to *illegally* gut homes containing lead-based paint without proper containment or adherence to safety protocols. These workers were not licensed to perform lead abatement, exposing both themselves and future residents to dangerous levels of lead exposure. Peterson also performed unpermitted and undocumented work on properties connected to Todt, furthering the web of corruption.

The scheme extended to financial fraud, with Todt submitting false invoices and diverting $15,280 into his personal account. He also received substantial “gifts” from Orellana and Peterson, including home renovations valued at over $12,000, completed by workers from Modern Construction and Top Notch Construction respectively. The brazen nature of the operation highlights a systemic failure in oversight and accountability within the CHN and its contracted companies.

Table of Contents

Key Facts

Defendant: Christopher Peterson
Crime: Fraud, Bribery, Illegal Lead Abatement
Location: Cleveland, Ohio
Year: 2017
Sentencing: 12 months imprisonment, $3,000 fine
Co-conspirators: James Todt, Lizandro Orellana
Victim: Cleveland Housing Network (CHN), potentially residents exposed to lead

James Todt received the harshest sentence, 30 months in prison, along with a $5,000 fine and three years of supervised release. Orellana was also sentenced to 30 months imprisonment and a $1,000 fine. Modern Construction Group LLC was ordered to pay a $1,600 fine and placed on probation for five years. The prosecution, handled by Assistant U.S. Attorneys Robert J. Patton and Brad Beeson, secured convictions under Title 18 U.S. Criminal Code, the Toxic Substances Control Act, specifically 15 U.S.C. 2615(b), 18 U.S.C. 2, 18 U.S.C. 666(a)(1)(A), and 18 U.S.C. 371. The case serves as a stark reminder of the potential for fraud and environmental harm within federally-funded programs, and the importance of rigorous enforcement of regulations designed to protect public health and safety.

Source: EPA ECHO Enforcement Case Database

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