Opening statements begin in federal trial for ex-JEA execs accused in Jacksonville’s largest fraud scheme

JACKSONVILLE, Fla. – What began in 2019 as a proposal to sell city-owned utility JEA, ballooned into what many consider the largest attempted fraud scheme in Jacksonville’s history.

The alleged scheme resulted in the federal indictments of former JEA CEO Aaron Zahn and former JEA CFO Ryan Wannemacher. They are accused of conspiracy and wire fraud in connection with the proposed sale, which could have netted the pair and other JEA executives millions of dollars through a controversial bonus plan tied to the sale.

TIMELINE: The federal case against two former JEA executives | JEA Scandal: A closer look at Jacksonville’s largest fraud case

The pair are being tried together but separate juries were picked for each defendant last week.

After some changes Tuesday because of juror hardships, the Zahn jury is made up of eight women and four men, with three women and one man as alternates. The Wannemacher jury is comprised of seven women and five men, with four women as alternates.

Opening statements will now begin Wednesday in a trial that is expected to last four weeks. Zahn and Wannemacher could get up to 25 years in prison if convicted on all charges.

Following opening statements, prosecutors will begin calling witnesses, starting with former JEA CEO Paul McElroy.

DOCUMENT: Witness list submitted by prosecution in U.S. vs. Aaron Zahn & Ryan Wannemacher

Among some of the notable names on the prosecution’s witness list are:

• JEA-related witnesses: McElroy; Melissa Dykes, COO under Zahn and interim CEO briefly after Zahn was let go; Jay Stowe, current CEO of JEA

• Former board members: Kelly Flanagan, Andy Allen, Alan Howard, Fred Newbill, April Green, Camille Lee Johnson

• City-related witnesses: Kyle Billy, former City Council auditor; Jeff Rodda, assistant council auditor; Kim Taylor, council auditor; Jason Gabriel, former general counsel for the city

• Others of note: Sam Mousa, former chief administrative officer for the city, who testified before the city council investigative committee at one point; two executives with NextEra, the parent company of FPL — one of the main bidders to purchase JEA; Matt Schellenberg, former city council member; Kevin Hyde, former city council president who is currently with the Foley Lardner law firm, which did some work for JEA

Zahn, who was appointed to the JEA board at the request of then-Mayor Lenny Curry and later became CEO, was removed as CEO in December 2019, after the scheme began to come to light. Zahn had proposed the sale of JEA after leadership began asserting falsely that JEA “was in trouble.”

Later, the public learned of the controversial bonus plan that would have benefited Zahn and others, had the sale gone through.

“Just think of what that would have meant to the taxpayers. A scheme to potentially defraud nearly a billion dollars,” News4JAX political analyst Rick Mullaney said.

Wannemacher and other executives were also let go.

The city council investigated, as well as the state attorney’s office. But the case was turned over to the feds, who later indicted Zahn and Wannemacher in March 2022. Both pleaded not guilty.

Zahn has made reference to the fact that he was a scapegoat, telling a lawyer working for JEA and the city that Curry was supportive of the $40 million payout Zahn would receive in the event of a sale. Curry has denied that claim. He has never been charged in connection with the JEA sale and has not been accused of any wrongdoing.