It’s being called the largest fraud case in the history of Jacksonville – Two former JEA executives charged with conspiracy and wire fraud. How did this all start?
JACKSONVILLE, Fla. — Current and former JEA employees express anger over the alleged scheme by former JEA CEO Aaron Zahn and former CFO Ryan Wannemacher. The two former executives are scheduled to be on trial in federal court in Jacksonville starting Wednesday.
Zahn and Wannemacher are both charged with conspiracy and wire fraud, and face a possible 25-year prison sentence if convicted.
“They thought Jacksonville was just stupid and ignorant, and a bunch of rednecks,” said Ronnie Burris, business manager of Local 630, a union of JEA employees.
JEA union member Tim Wing says he and his family moved to Jacksonville so he could work at JEA.
“I felt like God led me here,” Wing told First Coast News.
Wing says his faith motivates him to help people, and when he’s chest-deep in water to fix a broken pipe, he knows he’s doing a great service to folks.
In October 2019, JEA included a flyer in customers’ bills; it talked about JEA being in a “death spiral.” The flyer goes on to say, “We must avoid going over the financial cliff.”
City councilman Matt Carlucci says his wife opened the envelope and when she saw the flyer, she called for him to come look at it.
“I can’t believe this,” Carlucci remembered saying. “This is so wrong! This is ridiculous.”
The flyer was allegedly part of a scheme by JEA executives to scare the JEA Board of Directors, city council and the community into wanting to sell off JEA, one of the largest city-owned utilities in the country.
Carlucci says he made his feelings clear back then about privatizing JEA.
“I said ‘no,’ then I said, ‘Hell, no!'” Carlucci said.
Zahn and Wannemacher described a potential 29% cut in the JEA workforce and higher utility rates if JEA continued down its path.
So, what is the analysis now of this doom and gloom scenario? It “simply wasn’t true,” says attorney Steve Busey, selected by Jacksonville City Council to be special counsel for its investigation into JEA.
City Council’s investigatory report says, “The plan ran afoul through Aaron Zahn’s greed.”
The report was issued in December 2020 from Busey and five councilmembers: Chair Brenda Priestly Jackson, Randy DeFoor, Rory Diamond, Scott Wilson and then-Council President Tommy Hazouri. The committee said it combed through more than 600,000 documents to issue its report.
Busey says the doom and gloom campaign was to convince the community to sell the JEA, probably to Florida Power and Light (FPL) for upwards of $10-11 billion. FPL is a private company.
JEA employees say they were anxious they’d lost their jobs at the time. Wing says he sat down with his wife and talked over the possibilities. They wondered, Wing says, “How are we going to pay our bills? Do we need to move? Downsize?”
Indictments were then announced for Zahn and Wannemacher. The formal charges from federal prosecutors say the two executives stood to make millions from the alleged scheme, presented as an incentive plan for all 2,000 JEA workers, and based on the sale of JEA.
“It was designed to put hundreds of millions of dollars into senior executives’ pockets of JEA,” Busey said. “Aaron Zahn would have received the lion’s share.”
Busey says that lion’s share amount could have been tens of millions, even hundreds of millions of dollars.
“These people came to Jacksonville thinking we were a bunch of country bumpkins,” Carlucci said.
The sale was killed and Zahn was fired.
Jury selection continues Tuesday and testimony will begin Wednesday.
