Federal judge agrees that prosecutors built case against former JEA execs without protected statements

JACKSONVILLE, Fla. – Over the objections of defense attorneys, a federal judge has ruled that prosecutors built their criminal case against two former JEA executives without using evidence that came directly or indirectly from protected statements made by the defendants.

Former JEA CEO Aaron Zahn and his former chief financial officer Ryan Wannemacher were indicted in March 2022 in connection with a proposed bonus plan that would have paid out millions of dollars to employees if the city-owned utility were sold. They were charged with conspiracy and wire fraud. Both have pleaded not guilty.

In late 2019 and early 2020, as the city and JEA tried to determine if Zahn could be fired with cause, he and Wannemacher were compelled to sit for interviews by city investigators. Those statements were subject to “Garrity rights,” which are protections given to public employees who are compelled to testify so that the information can’t be used against them in a criminal proceeding.

Following the indictment, defense attorneys asked for what’s called a “Kastigar” hearing, named after a 1972 Supreme Court decision. During that hearing, which was held in May 2023, prosecutors had to prove that their case rests solely on evidence other than the protected statements and anything derived from them.

During the eight-day hearing, prosecutors called witnesses, including investigators, current and former city employees, city council members, and former JEA board members, to establish how they built their case. Defense attorneys had an opportunity to cross-examine the witnesses and to question whether or not they had been exposed to the protected statements, which had been released to the public in February 2020 during the city’s investigation.

In an opinion issued Tuesday afternoon, U.S. District Judge Brian Davis adopted the previous reports and recommendations of U.S. Magistrate Judge Monte C. Richardson, who conducted the Kastigar hearing. Richardson had found that prosecutors had shown an independent basis for the facts alleged in the indictment, even assuming that some of the evidence presented to the grand jury was tainted. He wrote that to the extent the government used any evidence that was tainted by the protected statements, the use was “harmless beyond a reasonable doubt” as the evidence was otherwise enough to support the indictment. Richardson had also found that statements Wannemacher made before a city council hearing in December 2019, led by council members Rory Diamond and Ron Salem and known as the “Diamond-Salem hearing,” were not subject to Garrity protections, as Wannemacher’s attorneys had argued.

Following Richardson’s reports last fall, defense attorneys filed their objections to the findings, and prosecutors responded to those objections, prior to Tuesday’s final opinion. As the defense had sought to possibly have the case thrown out because of the Garrity-protected statements, Tuesday’s ruling keeps the case moving forward.

In an earlier ruling Tuesday, Davis ordered that two separate juries be seated for the upcoming trial, due to how the Garrity-protected statements may be used during Zahn or Wannemacher’s defense.

Zahn and Wannemacher each filed a motion to sever their trial from the other’s, so they could use the other defendant’s Garrity-protected statement in their own defense. According to the order, Wannemacher had argued that Zahn’s statement was needed to show there was no fraud involved in Wannemacher’s statements to the JEA board about the privatization effort and proposed bonus plan. Similarly, Zahn intended to use Wannemacher’s statements to reveal inconsistencies and to provide clarity and context, according to the order.

DOCUMENT: Judge orders separate juries for Aaron Zahn and Ryan Wannemacher

Davis wrote in Tuesday’s order that if Wannemacher presented Zahn’s statements in a joint trial, it would violate Zahn’s Fifth Amendment right against self-incrimination. He also wrote that seating two juries would preserve both Zahn and Wannemacher’s constitutional rights while also avoiding pending questions about how to treat a co-defendants out-of-court statement, even if it is redacted. The order also states that seating two juries will save time and resources, as opposed to the alternative of having two multi-week trials, showing the same evidence and calling the same witnesses.

Last Friday, the judge denied a motion by Zahn to move the trial to Tampa, which is still within the federal court system’s Middle District of Florida. Zahn’s attorneys had argued he could not get a fair trial in Jacksonville, citing coverage of the case. But the judge ruled it was not enough of a basis to meet the legal standard to move a trial, and that the jury selection process would enable the court to select an impartial jury.

A pretrial hearing is set for Wednesday morning, where other outstanding issues in the case are expected to be discussed.