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Apr 3 – UPDATED: Pete Liakakis is Reportedly Resigning from the Board of Chatham Area Transit as the Reese-era Corruption Fallout Continues

By Lou Phelps, Savannah Business Journal

April 3, 2018 – 5:00 p.m. - The Chatham Area Transit Authority (CAT) Board of Directors held a final budget workshop today as they work on putting the finishing touches on their 2018-2019 operating plan. Longstanding member Pete Liakakis was not in attendance.  

The CAT staff has been told that he has resigned his appointment to the Board, but they have not received anything official from the Chatham County Commissioners or from Liakakis.  Board Chairman Howard French confirmed Tuesday afternoon that Liakakis will resign at CAT's April 24 board meeting. His current term was set to end in 2021, appointed to the CAT board by the County Commissioners. 

Liakakis has had a long legacy of public service.  He served two terms as Chairman of the Chatham County Commissioners, and then chaired the Chatham Area Transit board for a number of years, including during the era when Chadwick L. "Chad" Reese was hired as Executive Director. During Reese's tenure, he perpetuated a number of fraudulent acts, and plead guilty following an extensive investigation by the U.S. Justice Dept's Southern District Office, headquartered in Savannah.

Reese was indicted in December 2015 for defrauding CAT through various schemes, including billing CAT using a fake company he established, and taking kickbacks from CAT vendors who billed CAT for work they did not do.

He began a negotiated seven-year prison sentence on August 10, 2016, a sentence that included a $712,000 fine.  He sold his home in the Savannah Quarters residential community – which had been paid for in cash – and paid back $500,000 in restitution to CAT before starting his prison sentence.

But, Reese’s name and what he knows has come up again, this time in the recent trial of Anthony Florence, who was convicted on Feb. 28, 2018 of twenty-five counts of fraud and bribery after a three-day tirial.  Florence is also alleged to have defraudied CAT, working with Reese, based on evidence that the U.S. Justice Dept has continued to work through using information gained in its initial investigation of Reese and others.

Sources state that the Justice Dept's investigation is "still ongoing." 

Florence, a contractor for CAT, was convicted by a federal jury on twenty-two counts of mail fraud, two counts of wire fraud, and one count of bribery of a program receiving federal funds four weeks ago.  United States District Court Judge William T. Moore presided over Florence’s jury trial.

According to the evidence presented at trial, Florence paid bribes and kickbacks to Reese, formerly the Executive Director of CAT, and Joel T. Morris, formerly the Director of Maintenance of CAT.  Morris was sentenced to 20 months in prison, at the same time that Reese was sentenced in 2016, and is still serving his prison sentence.

Florence paid for over $100,000 worth of work on the personal residences of Reese and Morris.  In exchange, Reese awarded contracts to a company operated by Florence, SR Contracting, over a period of nearly two years.  Even though Florence and his company provided little to no work, Reese and Morris approved over $200,000 in payments by Chatham Area Transit to Florence’s company. 

According to United States Attorney Bobby L. Christine, “The lesson for contractors doing business in South Georgia is simple:  paying a public official to obtain ‘no show’ work is a good way to end up in federal prison.  This office will aggressively root out corruption at every level of government.”   

“Just because public officials are willing to violate the trust of the people they serve, doesn’t mean contractors can take advantage of their lack of integrity,” said David J. LeValley, Special Agent in Charge of FBI Atlanta. “The FBI will continue to make public corruption cases, and all of those involved, a priority. We ask anyone with information regarding such matters to contact their nearest FBI field office or resident agency.”

Liakakis told several local officials last week that he was resigning from the CAT board “because his name had come up in the Florence trial," though he has not been indicted or implicated in any wrongdoing. 

Sources state that Reese has been cooperative with the Justice Dept, and testified at the trial of Florence.

Back in 2016, after Reese pled guilty and avoided a trial, the Justice Dept told local media that he had been cooperative with information beyond those names included in his and Morris’ original indictments. No other vendors who were contractors during Reese's tenure, however, have been implicated, and several interviewed state that they have never been interviewed by the Justice Dept. 

The CAT staff confirmed today that they have not received anything official from Chatham County about Liakakis’ resignation, and Al Scott, Chairman of the Chatham County Commissioners also states today that he had not spoken to Liakakis nor received a formal resignation letter.

However, County Atty. Jon Hart confirms that he has talked with Liakakis, with him deciding to resign, “and we discussed a plaque or something for his service,” said Hart. 

Statements that the Justice Dept's investigation is still active, leads to conjecture about who else might have been involved in illegal actions.  The indictments to date have all related to vendors involved in day-to-day operations, not the large construction projects that CAT has invested in over the past five years.

Eli Karatossos, who was CAT’s Project Manager for four years over multiple construction projects during the period - including the building the Joe Murray Rivers Transportation Center and CAT’s operational center on E. Gwinnett Street - says he has no information on any wrong doing regarding construction projects, and has never been contacted by the Justice Dept, for example. 

His consulting contract with CAT was ended in December 2015, after Reese was indicted, along with all "on-call" contracts that the CAT board had in place at the time. An "on-call" contractor is a selected vendor to be used, if necessary. There has been no allegations of any wrongdoing by those on-call contractors.  

Karatossos states that CAT put out an RFP for a Project Manager, and he bid on the contract in an open process. Thomas & Hutton and others were also on-call contractors, contracts that were renewable annually. 

Chatham County had hired Karatossos to be Project Manager for the Joe Murray Rivers Transportation Center, initially.  He then began an on-call contract with CAT beginning back in June 2012 to complete that project. 

He was also a subcontractor to Thomas & Hutton for the transportation center on Hutchinson Island during those years. 

U.S. Attorney Christine commended the hard work and dedication of the FBI, which investigated the recent Florence case.  Special Agent Joshua Hayes led the FBI’s investigation. 

Assistant United States Attorneys R. Brian Tanner and J. Thomas Clarkson prosecuted the case on behalf of the United States. The United States Attorney’s Office can be reached at (912) 652-4422.

 

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