CLEVELAND: The former chief financial officer of Suarez Corp. Industries told a federal court jury Tuesday that he conspired with millionaire Stark County businessman Ben Suarez in violating campaign finance laws, obstructing justice, making false statements and other crimes.
Michael R. Giorgio, the government’s star witness in Suarez’s continuing criminal trial, walked into court to take the swearing-in oath at 3:25 p.m.
A former U.S. Marine Corps field medic who worked for Suarez’s worldwide product marketing company for 27 years, Giorgio was dressed in a gray business suit, white shirt and patterned maroon tie. He sported a deep tan.
Teams of prosecution and defense lawyers turned around in their seats to watch Giorgio’s entrance through the middle aisle of Judge Patricia A. Gaughan’s expansive courtroom on the 19th floor of the Carl B. Stokes U.S. Courthouse.
Suarez, 72, sat at the defense table in a dark gray business suit, his face turned toward the bench, and never exchanged a glance with Giorgio as he walked toward the witness box.
Minutes into what is expected to be many long hours — if not days — of testimony by Giorgio, he was asked if he took responsibility for his actions in his government plea deal.
He said he did.
When a prosecutor asked Giorgio why he took responsibility, he replied matter-of-factly: “Because I was guilty.”
Prosecutors contend that Giorgio and Suarez took money from “straw donors” in violation of federal laws starting in 2011 by contributing $90,000 to the election campaign of U.S. Rep. Jim Renacci and $100,000 to Ohio Treasurer Josh Mandel’s campaign for U.S. Senate.
Both campaigns later returned the money, and neither elected official has been accused of any wrongdoing.
The Associated Press reported Tuesday afternoon that Renacci wants Gaughan to quash a subpoena and prevent him from being called to testify at the trial.
Giorgio, 62, testified that he backed out of a joint defense agreement with Suarez and his company, SCI, on May 18, when he signed a plea deal with prosecutors for the U.S. Attorney’s Office in Cleveland.
Suarez had been billed a huge fee for providing individual legal representation for Giorgio by a Cleveland attorney, Ralph Cascarilla, only weeks before the deal. It was described in court records as a surprising “11th-hour plea,” but there has been no testimony, nor other court documentation, about how much the fee totaled.
Prosecutors recommended a two-year prison sentence and a $50,000 fine, Giorgio told the jury, in exchange for him cooperating with the government in providing documents related to the federal charges, along with his agreement to testify.
Gaughan, who is presiding over the trial, now in the middle of its second full week, will have the final say on Giorgio’s penalties.
Giorgio told jurors that if he had not agreed to cooperate, then he would have faced a prison term of about four years and “a very large” fine.
When the trial opened June 2, Suarez’s defense team dropped a bombshell, filing court records calling Giorgio “a liar and a thief.”
The records say he lied to prosecutors about details of the indicted charges in his plea to save himself from far more serious state charges.
Those records say an internal SCI audit revealed that Giorgio embezzled about $1 million from the company over a 17-year period.
In a development related to those claims, Suarez’s defense team filed a civil lawsuit Tuesday afternoon against Giorgio in Summit County Common Pleas Court.
It charges him with one count of fraud and one count of what was termed “unjust enrichment.”
The suit, titled Suarez Corp. Industries vs. Michael R. Giorgio, began by saying that he was the company CFO “for decades.”
“Through monthly acts of deception and theft over a period of many years,” the suit stated, “[Giorgio] embezzled over $400,000 from SCI.” He did so “by defrauding certain persons at SCI who handled accounting and payroll matters into paying him funds to which he was not entitled.”
Giorgio testified — and the civil suit confirmed — that he was fired by SCI on May 22, four days after he signed his plea deal.
The suit was filed in Summit County because Giorgio’s home and residence is in Cuyahoga Falls. It seeks compensatory and punitive damages.
When Giorgio’s court testimony ended for the day at 4:45 p.m., Assistant U.S. Attorney Rebecca Lutzko had not asked him any questions about the alleged embezzlement scheme, nor the filing of the Summit County lawsuit.
Giorgio has yet to testify about any details related to the campaign finance charges against Suarez and SCI, but he did tell the jury that he went to Akron’s Firestone High School, was a 1976 graduate of the University of Akron with a degree in accounting, and received a master’s degree in business from Kent State in 1984.
He began working for SCI in October 1986 as company controller and eventually worked his way up to general manager, then became chief financial officer in the late 1990s, he said.
He told jurors that when he first started working for SCI, the company was much smaller than it is today — about 100 employees bringing in about $16 million to $18 million in annual revenue.
Today, Giorgio said, SCI’s gross annual revenue is about $200 million.
Giorgio said Suarez’s company, which he started out of his garage in the 1970s, sold fashion jewelry at first, then branched out into commemorative coins, home products, health supplements, air purifiers and, eventually, the “very successful” EdenPure infrared heater.
EdenPure sales started to take off in 2006-2007. “I would describe it as horribly successful,” Giorgio said.
Asked what he meant by that term, Giorgio told the jury that SCI sold more than 2 million EdenPure heaters in 2008 alone.
His testimony is scheduled to resume at 9 a.m. today.
Ed Meyer can be reached at 330-996-3784 or firstname.lastname@example.org.