A federal indictment was filed charging Christopher L. Gattarello and another Cleveland man with violating the Clean Air Act by failing to remove asbestos prior to demolishing a former factory in Cleveland, law enforcement officials said.
Gattarello and another conspirator were also charged with defrauding a Louisiana company out of nearly $1.2 million.
At the same time, state charges were filed in Cuyahoga County Common Pleas Court against Gattarello and two men, charging them with illegally dumping garbage in Cleveland.
Indicted in federal court are Gattarello, 50, of Cleveland; Willam S. Jackson, Jr., 44, of Cleveland, and Robert A. Shaw, Sr., 74, of Ypslanti, Michigan.
The indictments were announced by Steven M. Dettelbach, United States Attorney for the Northern District of Ohio, Ohio Attorney General Mike DeWine, Cuyahoga County Prosecutor Timothy McGinty, Ohio EPA Director Craig W. Butler and Kathy A. Enstrom, Special Agent in Charge, IRS Criminal Investigation, Cincinnati Field Office.
"We will not allow our neighborhoods to be used as garbage dumps," Dettelbach said. "Mr. Gattarello's actions show his total disdain for the law and for the people who live near the factory. He will be held accountable for his actions."
"Thousands of tons of garbage were dumped illegally near a residential neighborhood," Attorney General DeWine said. "This behavior is inexcusable. Residents have to deal with this significant environmental and health threat, and they deserved to see those accountable brought to justice."
"Dumping waste in our County is criminal, reprehensible and makes it harder for the people of Cuyahoga County to beautify our region," said Adrienne Linnick, assistant Cuyahoga County prosecutor. "But dumping roughly 29 million pounds of assorted waste — as was found on the old National Acme site—attracts so many pests and produces so many odors that it can contribute to the demise of a neighborhood. Nobody wants to do business next to trash heaps, let alone live next to one where they might want to jog, bike, walk a dog or take their children for a stroll."
Butler said: "I commend the hard work put into this case by Ohio EPA's special investigations staff and our partnering agencies to bring about this indictment. Ohio EPA will not tolerate reckless disregard for the health and welfare of Ohio citizens."
"IRS-Criminal Investigation is committed to unravelling complex financial schemes and following the money to ensure those who profit from crime are held accountable," Enstrom said.
Gattarello owned and controlled several municipal garbage-hauling businesses in greater Cleveland, including Reach Out Disposal, All Points Rubbish Disposal and Axelrod Rubbish Recycling. Shaw worked for Gattarello at those companies, while Jackson operated a Cleveland building demolition company.
Gattarello and Jackson were each charged with two counts of violating the Clean Air Act.
According to the four-count federal indictment:
In June 2011, Gattarello, on behalf of All Points, leased the former National Acme facility at 170 East 131st Street in Cleveland. The 570,000 square-foot facility was built in 1917 and was used for manufacturing for nearly a century. It is located near many homes and a school. Gattarello represented to the lessor that paper and cardboard waste would be recycled at the facility.
In July 2011, a company estimated removing asbestos from the facility would cost $1.5 million.
Around August 2011, Gattarello directed paper and cardboard waste, as well as municipal garbage, be delivered to the facility for recycling. Over the next several months, more garbage, paper and cardboard were delivered than could be handled, and Gattarello had the waste moved inside. By April 2012, most of the facility was filled with garbage.
In May 2012, Gattarello, on behalf of Reach Out, entered into a contract to purchase the facility. Gattarello intended to demolish the facility and sell any metal removed as scrap.
In July 2012, Jackson submitted a notice of demolition with the Cleveland Division of Air Quality stating there was no asbestos in the National Acme facility. About 10 days later, the CDAQ rejected Jackson's notice because it was incomplete and stated demolition "may not begin" until a proper notice was submitted and approved. About 10 days after that, on July 21, 2012, Jackson began demolition at Gattarello's direction.
Asbestos fibers were released into the environment during demolition. Debris accumulated outside the facility from demolition and asbestos in the piles were exposed to the wind and elements.
In the state's case, Christopher Gattarello, Axelrod Recycling, and Reachout Disposal each were indicted on the same five counts — two counts of illegal open dumping, two counts of operating a solid waste landfill without a license, and one count of operating a solid waste transfer facility without a license. The charges stem from alleged solid waste violations at the former National Acme facility and at 965 Wayside Avenue in Cleveland.
Also in the state's case, Christopher Gattarello's brother, Anthony Gattarello, 48, of Highland Heights, was indicted on one count of illegal open dumping and one count of operating a solid waste disposal facility without a license. Jackson was indicted on one count of illegal open dumping. The charges relate to alleged violations at the former National Acme facility.
Additionally, Christopher Gattarello was charged with in federal court with one count each of conspiracy to commit wire fraud and money laundering. Shaw faces one count of conspiracy to commit wire fraud.
AIM Business Capital LLC is a financial company based in Louisiana that specializes in "factoring" – a practice in which AIM purchases accounts receivable, such as invoices billed to customers for goods and services. Businesses that factored their receivables with AIM received immediate cash. AIM, like other factoring companies, purchase the receivables at a percentage discount of the invoice. AIM made a profit by collecting the full amount of the invoice from the business's customers, according to the federal indictment.
In 2011 and 2012, Shaw, on behalf of Reach Out and Axelrod, entered into contracts with AIM for the purchase of receivables from Reach Out and Axelrod. Gattarello directed the creation of false and fraudulent invoices for the companies and directed that they be submitted to AIM. In some cases, Gattarello and Shaw directed other employees to create false letters attesting to the validity of the invoices, which Shaw forwarded to AIM. The loss to AIM was nearly $1.2 million, according to the federal indictment.
The federal case is being prosecuted by Assistant United States Attorneys Brad Beeson and James V. Moroney following an investigation by the U.S. and Ohio Environmental Protection Agencies, the Ohio Bureau of Criminal Investigation and the Internal Revenue Service.
The state case is being prosecuted by the Ohio Attorney General's Office in cooperation with the Cuyahoga County Prosecutor's Office.