United States of America v. Arthur Fayne

Cleveland, Ohio criminal defense lawyer represented the Defendant charged with 9 counts of wire fraud for embezzling more than $880,000 in funds intended to help the residents of Cleveland's Glenville neighborhood, but which Fayne used for an extravagant lifestyle with extensive casino gambling.



Athur Fayne, age 61, owned and managed Business Development Concepts, LLC ("BDC”), through which he oversaw construction projects. Northeast Ohio Neighborhood Health Services, Inc. ("NEON”) was a nonprofit corporation that operated as a federally qualified health center network of community health centers and provided primary care medical services in the Cleveland, Ohio area. As part of that mission, NEON, through a subsidiary, initiated a project to redevelop a vacant building in the Glenville neighborhood into a grocery store and community center called the New East Side Market. The grocery store was intended to address the persistent food desert challenges in Glenville. NEON entrusted Fayne with control of the project and payments to vendors, and Fayne used that trust to steal funds NEON provided for the project.



Fayne was convicted of embezzling approximately $759,105.92 in funds intended to pay the project's general contractor, the Albert M. Higley Company ("AM Higley”). Fayne concealed the invoices he received from AM Higley while submitting his own invoices to NEON seeking funds he claimed were for paying AM Higley. He then diverted to his personal benefit more than $750,000 of the funds intended for AM Higley.



Fayne was also convicted of embezzling approximately $125,923.86 in funds intended for audio-visual contractor Crescent Digital. That vendor actually returned roughly half of the money it had been paid at the start of the project, telling Fayne that it could only collect a deposit at that time, and would invoice BDC for the balance when the work was complete. Rather than hold those funds to pay Crescent Digital, however, Fayne had the funds deposited in his wife's personal account, and then diverted that money for his benefit.



Fayne spent the money on the extravagant lifestyle he lived, which included sometimes gambling tens of thousands of dollars in a single night. Evidence showed Fayne lost over $1 million at casinos during the project. Fayne's spending of the diverted funds included gambling at the JACK Cleveland Casino, gambling at a New Orleans casino, and making personal expenditures on Louis Vuitton merchandise, services at a New York City spa, and a luxury cruise out of Miami.



The investigation preceding the indictment was conducted by the Cleveland Division of the FBI and the U.S. Department of Housing and Urban Development's Office of the Inspector General. This case is being prosecuted by Assistant U.S. Attorneys Brian M. McDonough and Vanessa V. Healy.

Defendant was found guilty at the end of a five day jury trial.