Federal fraud, conspiracy trial of former JEA execs gets underway in Jacksonville

Zahn and Wannemacher both face up to 25 years in federal prison for in the words of prosecutors, “conspiring to steal and obtain by fraud funds from the City of Jacksonville which would have been generated from the sale of JEA.” That number? Up to $345 million.

Both men are being tried at the same time, but each have their own jury.

Since this is a federal trial, no cameras are allowed inside court, but Becker and Action News Jax reporter Alexus Cleavenger took notes on what’s going on inside.

TIMELINE: Failed sale of Jacksonville public utility JEA that led to indictment of former CEO, CFO

Here’s what’s happened Wednesday:

• The government laid out its opening statements first and around noon, the defense was giving its statements to the jury. The burden is on the government to prove that Zahn and Wannemacher are guilty.
• The government said it plans to call 30 witnesses during the trial. The first witness called Wednesday was Paul McElroy, who served as CEO of JEA for 16 years until his 2018 retirement. After Zahn was fired, McElroy came back in 2020 to serve as interim CEO for six months until current CEO Jay Stowe was hired in November 2020.
• Prosecutors also said it was obvious that former Jacksonville Mayor Lenny Curry and his office were behind Zahn becoming CEO with the intent to sell the utility, which isn’t a crime in of itself. Curry isn’t accused of any wrongdoing and isn’t scheduled to testify.
• Zahn’s lawyers are blaming other lawyers, as well as the JEA board at the time, for how the attempt to privatize JEA went down. His lawyers said the deal was legit, at the time.
• Assistant United States Attorney A. Tysen Duva said Zahn created a “false narrative” to set up a potential sale of JEA where he could have profited with tens of millions of dollars. Duva said Zahn and Wannemacher lied by “commission and omission” in convincing the board to approve a sale in 2019 before the whole plan blew up.
• The defense said Zahn was a “visionary.” His ideas were put forth to help the utility, not hurt the utility.
• Wannemacher’s attorney said Wannemacher was just doing his job, doing what Zahn told him to do.
• Also referenced in court was the “The Petway Mic Drop:” Tom Petway, a former member of the JEA board, brought up in 2017 that perhaps a sale of JEA should be explored.
• During his testimony, McElroy defended JEA, painting a picture that the utility was in good financial health while he was CEO. He also laid out the importance of the utility to the city of Jacksonville. McElroy will continue testifying on Thursday.

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Here are observations of Action News Jax law and safety expert Dale Carson, who was also inside the courtroom along with Becker:

• Duva is “at the top of his game,” Carson said. Duva began presenting his case by going back through JEA’s history back to its founding in 1895 to the present.
• Carson said it is interesting to see how the government’s perception of what transpired is different from what the defense is presenting. The government claims Zahn and Wannemacher colluded together and created an “obscure payment plan,” Carson said, known as the Performance Unit Plan. The PUP would incentivize JEA workers, because in Zahn’s view, the entire organization was going to collapse.
• There are 24 members on the jury panel because there are “two cases being presented almost simultaneously,” Carson said.
• Becker asked Carson if a case can be won or lost on the first day: “If the presentation from the government is solid, as this appears to be, and they can follow up by proving the evidence, as they indicate they can, then the defendants are in trouble,” Carson said. “Conspiracy only requires a meeting of the minds between these two people, and one, not a number, but one overt act. That’s all the government has to prove.”
• Carson said the trial is interesting because not only are the juries seeing video from past JEA board meetings, but also hearing testimony from people who were at those meetings. “This has become an interesting trial. We’re seeing film of actual meetings of the board of JEA and there’s testimony from people who were there, specifically, the former CEO. ... Those are admissible in court.”
• Becker asked Carson about Curry being mentioned by prosecutors, though Curry is not accused of any wrongdoing: “We’re beginning to see the threads back to the real power in Jacksonville to why this has happened if you follow the government’s view of the case.”

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Becker spoke with Zahn as he was leaving court at the end of the day. Here is part of the exchange the two had:

Zahn: “Hey Ben.”

Becker: “Hi Aaron, how are you doing?”

Zahn shakes Becker’s hand.

Zahn: “All right, how are you doing? How’s your family?”

Becker: “Good how about yours?”

Zahn: “Doing all right.”

Becker: “How’d it go today? ... Do you feel positive about anything in there?”

Other reporters are asking Zahn questions as well.

Zahn: “Hey guys, can we give my family some space? I know it’s been a long five years. Would you mind just giving my family the privacy that it deserves? I’d really appreciate it.”

The trial, with testimony and deliberations, is estimated to last for four weeks. Count on Action News Jax to be there every step of the way.

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