When he made a run for Toledo mayor in 2009, Realtor James Moody said he was a businessman who wanted to put his business skills to work for the city.

On Monday, Moody, 56, of Sylvania Township was found guilty by a jury in U.S. District Court of defrauding the government of money intended to train and place low-income people in jobs. The thefts occurred through a company he provided the seed money to create, a company that had him – and later his wife – on its payroll for years though neither of them worked there.

Also convicted in the scheme were Victoria Hawkins, 30, now of Grand Rapids, Mich., and Angela Bowser, 46, of Toledo, who both worked for Business Rehabilitation Informed Decisions Guiding Employment Strategies or BRIDGES, a South Toledo company that contracted with Lucas County Job and Family Services to provide job training and placement for people on public assistance.

Daniel E. Morris, 68, of Maumee, BRIDGES’ co-founder and general manager, pleaded guilty Nov. 1 to conspiracy to commit program fraud and mail fraud, conspiracy to launder money, aggravated identity theft, and failing to pay withheld payroll taxes.

“These defendants stole millions of dollars targeted to help the least among us learn job skills, and instead used the money to fund lavish lifestyles and pay for no-show jobs,” U.S. Attorney Justin E. Herdman said in a news release. “They ripped off taxpayers and betrayed the trust placed in them.”

Ryan Korner, the Internal Revenue Service’s special agent in charge, called the case “a transparent scheme to defraud the taxpayers of Northwest Ohio.”

RELATED: Daniel E. Morris pleads guilty to defrauding Lucas County Job and Family Services

The jury of six men and six women deliberated nine hours Friday afternoon and Monday morning before returning guilty verdicts against Moody, Hawkins, and Bowser on all counts.

All three were convicted of conspiracy to commit program fraud and mail fraud and conspiracy to commit money laundering. Moody also was found guilty of program fraud and three counts of money laundering. Bowser also was convicted of program fraud and two counts of money laundering, while Hawkins was found guilty of two counts of program fraud and four counts of money laundering.

Hawkins' attorney, Jeffrey Nunnari, said the jury likely was swayed by the large dollar amounts involved in the case.

“We are extremely disappointed [with the verdicts] based upon the state of the evidence that was presented,” Mr. Nunnari said. “The jury must have lost its way.”

Evidence showed that Hawkins spent some $750,000 over two years and received vehicles and real estate, including a $400,000 home in Point Place, purchased with BRIDGES funds. Prosecutors said Bowser, who also purchased a home with the help of BRIDGES funds, continued to receive a paycheck after she stopped working there in 2014.

Donna Grill, a public defender who represented Bowser, declined to comment after the verdicts were announced. Catherine Killam, who represented Moody, said neither she nor her client would comment. 

Noah Hood, an assistant U.S. Attorney who led the prosecution, credited “the hard work of IRS Criminal Investigations with assistance from the Ohio Auditor of State Public Integrity Unit.” He said it was “a document heavy case” that may not have looked like the stereotypical criminal conspiracy.

“Suffice to say, people have a schema for what crime looks like. This is what it looks like,” Mr. Hood said.

During the week-long trial, attorneys for Hawkins and Bowser claimed their clients were unaware that the money and purchases lavished on them by Morris came from federal program funds despite the fact nearly all BRIDGES revenue came from public funds.

Ms. Killam argued that Moody did not know the company’s contracts only allowed BRIDGES to charge for its actual cost of providing programming. She said he did not know the company could not make a profit.

Collectively, the defendants pointed the finger at Morris, who admitted to inflating costs of payroll, transportation, and mileage for the work BRIDGES performed between 2004 and 2015 and to maintaining fake personnel files and other records to cover up the scheme.

Moody, who took the witness stand, said he invested $50,000 of his own money to start BRIDGES – money he said he drew from his house’s equity. He said he expected a return on his investment, and he got it.

Under questioning by Ms. Killam, he said he didn't know the rules and regulations in the contracts BRIDGES had but presumed that Morris did.

“I believed that Dan knew everything about the programs,” Moody said, adding that he never suspected Morris of anything untoward.

“I thought Dan ran a really good program that gave people a hand up, not a handout, but that he was stupid when it came to the money, just stupid,” Moody testified.

The jury was shown check after check written from BRIDGES' accounts, signed by Morris, and made out to Moody or his real estate company, Flex Realty, some for as much as $10,000. Some checks included the word “dividend” on the memo line.

Prosecutors said he used some of the money to purchase and renovate an investment property in Toledo and to purchase an interest in Flex Realty.

At one point, Moody began receiving a regular paycheck from BRIDGES, and he admitted that when he ran for mayor, he had those payroll checks made out to his wife, Cheryl. He said his campaign staff advised him to do that, saying it wouldn't look good for him to be associated with an entitlement program.

“But [your wife] didn't work there?” Mr. Hood asked Moody.

“No sir,” Moody replied.

Judge Jack Zouhary allowed Moody, Hawkins, and Bowser to remain free until their sentencings April 10. Morris is to be sentenced Feb. 22.

Contact Jennifer Feehan at jfeehan@theblade.com or 419-213-2134.

First Published December 11, 2017, 4:53 p.m.