Ohio Supreme Court: Ex-regulator’s assets can be frozen in connection with FirstEnergy case

Credit: AP

Credit: AP

Editor’s note: This story originally appeared on the Ohio Capital Journal.

The Ohio Supreme Court unanimously ruled Tuesday that assets owned by the former head of the Public Utilities Commission of Ohio can be frozen in connection with a federal public corruption case.

Sam Randazzo’s bank accounts and brokerage accounts can now be frozen, according to a ruling by the state’s highest court that reversed an appeals court decision. This keeps Randazzo from moving money out of his accounts as the state’s civil action continues to recover proceeds from an alleged bribe given by FirstEnergy Corporation.

The case came to the Ohio Supreme Court almost exactly one year ago, when the state said the case arose “from a brazen conspiracy perpetrated by an energy conglomerate, FirstEnergy Corp., to defraud Ohioans out of billions of dollars,” Ohio Attorney General Dave Yost told the court at the time.

FirstEnergy was the company at the heart of a public bribery and corruption scandal related to House Bill 6, which eventually took down former Ohio House Speaker Larry Householder, who was convicted and sentenced to 20 years in federal prison for racketeering.

In the sentencing of Householder, U.S. District Judge Timothy Black called out Householder for leading a scandal in which FirstEnergy poured out more than $59 million in political bribes for a nuclear plant bailout in Northern Ohio costing $1.3 billion.

The Randazzo civil case involves a $4.3 million bribe FirstEnergy said it paid to the former PUCO chair through his company, Sustainability Funding Alliance of Ohio, Inc., just before he started at the commission. Randazzo was appointed to the commission by Gov. Mike DeWine, Justice Pat DeWine’s father.

“The state claims that this payment was allegedly in exchange for Randazzo promising to give favorable treatment to FirstEnergy as PUCO chairman,” Justice DeWine wrote as the lead in the supreme court’s Tuesday opinion.

This comes after Ohio sued FirstEnergy in Sept. 2020 in connection with bribery and corruption, a lawsuit that was held up by federal criminal litigation. The company then entered an agreement with the U.S. Attorney’s Office, and the agreement “revealed Randazzo’s role in the corruption scheme,” wrote Justice DeWine in the Tuesday opinion.

The state sued Randazzo in 2021 to freeze assets and “preserve the future sale of property,” according to a Tuesday statement from the Ohio Attorney General’s Office.

When the state argued to seize Randazzo’s financial accounts before a judgment was leveled in the case against him, attorneys said there was “probable cause that (the state) would obtain a money judgment against Randazzo.”

“It pointed to the FBI’s raid of Randazzo’s home in late 2020 (shortly after which Randazzo resigned from his position at PUCO) and FirstEnergy’s essentially admitting to bribing Randazzo in the deferred-prosecution agreement,” Justice DeWine wrote on behalf of the court.

After the FBI raided Randazzo’s house, evidence showed he transferred a house valued at more than $500,000 to his son without charge, sold two Florida properties for about $4 million, and also sold two Ohio properties for about $800,000.

“This pattern, the state claimed, indicated a ‘present danger’ that Randazzo was attempting to transfer assets to make them unreachable by a judgment creditor,” DeWine wrote.

In a separate court case, Randazzo was indicted on Nov. 29, 2023 by a federal grand jury on felony criminal bribery and embezzlement charges.

He pleaded not guilty in December after surrendering to U.S. District Court in Cincinnati on the 11-count indictment.

Before heading to appeals court in the civil case, Randazzo attempted to convince a lower court to vacate the orders of seizure for his accounts, claiming the state hadn’t established ‘irreparable injury,’ saying some properties were exempt from seizure and alleging a violation of his due process rights.

“The trial court held a hearing on the motion, but Randazzo chose not to offer any evidence,” the Ohio Supreme Court opinion stated. “Instead, he offered legal theories as to why the attachment (seizure requests) was improper.”

The Tenth District Court of Appeals ruled in favor of Randazzo, saying the orders to freeze assets were made in error because the state had failed to prove the “irreparable injury” caused by a delay in an asset freeze. This led the state to appeal to the state’s highest court.

“But it’s hard to see how Randazzo suffered any resulting injury because the assets in Randazzo’s accounts would have been frozen regardless,” DeWine wrote in the Tuesday ruling, adding that Randazzo had “failed to demonstrate any prejudice.”

Yost, whose office represents the state in legal matters, said in a statement that his office is “pleased that the court recognized that Mr. Randazzo cannot spend down his bribe proceeds and render himself judgment-proof.”

Ronald Lewis, judge for the Second District Court of Appeals, sat in for Justice Joseph Deters in the decision.

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