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Contractors Found not Guilty of Fraud

 

By Bob Levenson | Sentinel Staff Writer

Posted February 1, 1989

CORRECTION PUBLISHED FEBRUARY 3, 1989 Because of an editing error, attorney John Woodard's name was misspelled in Wednesday's Local & state section. The error was in an article about a Michigan contracting firm being found innocent of theft charges.

Two executives of a Michigan contracting company were found not guilty Tuesday of charges that they conspired to steal money from another company on a pipe-laying project for the city of Orlando.

A six-member jury deliberated four hours before acquitting Louis Vito Stramaglia, vice president of Vito's Trucking and Excavating, of one count of racketeering and 11 counts of grand theft.

Earlier, before the case went to the jury, a judge threw out similar charges against company treasurer Ed Chapman. Circuit Judge Emerson Thompson ruled that Orange-Osceola assistant state attorney Rick Bogle had not presented enough evidence to substantiate the charge against Chapman.

Company president Frank Stramaglia had been charged but died last month in a Michigan hotel room, apparently of a cocaine overdose.

The charges against the three stemmed from an $8.4-million contract between Vito's and the city. The contract called for Vito's to lay about 16 miles of sewer pipe along State Road 436 between Pershing Road and Orlando International Airport in 1985 and 1986.

Vito's, now known as FVL Contracting, had agreed to pay $3.6 million of that money to another company to supply it with the pipe needed for the project. Vito's got the pipe but paid only $1.4 million to the subcontractor, American Cast Iron and Pipe Company.

In an eight-day trial, Bogle tried to prove that between April 1985 and June 1986, Louis Stramaglia and Chapman systematically submitted fake documents and checks to city officials to convince them that Vito's had paid the remaining $2.2 million to American Cast Iron.

Defense attorneys did not argue that Vito's kept the $2.2 million. However, the attorneys said, there was no criminal intent. They said Vito's was embroiled in a dispute with American Cast Iron over whether the pipe was the proper width. Vito's executives didn't want to pay, then be held liable later because the pipe was the wrong width, the defense contended.

After American Cast Iron officials complained to the city in March 1986, Orlando officials kicked Vito's off the project. Vito's insurance company eventually settled with American Cast Iron, and a civil jury eventually ruled that the city owed Vito's money.

" It was a contract dispute that should have gone to arbitration and that's all," said John Woodward, representing Stramaglia. "They showed no intent to take anything. They stayed on the job six weeks after the dispute arose with the city.

They didn't get paid for six weeks, but they kept on working. That's not a company taking anything."

" We didn't see it as a criminal case when he was making business decisions," juror Leo Miner said. "That's how business decisions are made in the real world."

The case was a setback for the Metropolitan Bureau of Investigation, a drug and vice task force made up of six Orange County law enforcement departments. The agency spent several months, hundreds of hours and thousands of dollars poring over bank documents and flying out of state to track down witnesses. MBI agents touted the case as one their major accomplishments last year in their annual report to the board of directors.

" It's always difficult to prove criminal intent when you're dealing with a contract," said Bogle, legal adviser to the MBI.

There's nothing we would do differently. We still feel it was totally justified. If the same facts arose, we would diligently investigate and vigorously prosecute."

Chapman had been charged because he signed several of the pay applications to the city and was responsible as company treasurer for transferring money from the Orlando project to Vito's home bank in Michigan.

Thompson ruled that Chapman did nothing more than his job.

" He signed some checks, so they dragged him into it," said Chapman's attorney, Ken Cotter. "What he did was standard procedure in the company. The whole thing was an extraordinary waste of time."

The Orlando case was not the Stramaglia company's first brush with the law. Their insurance company paid Lee County $5.2 million in 1987 for flawed work in the county's sewer system. The company still faces racketeering and theft charges in Broward County over its work on the Sawgrass Expressway.

Copyright © 1989, Orlando Sentinel

 

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