Judge: CMEEC should receive $748,800 for losses incurred in Kentucky Derby, Greenbrier trips
Nov. 14—A federal judge on Tuesday ordered three convicted former utilities officials to pay a combined total of $748,800 to the utility cooperative in reimbursement for losses incurred for junket trips to the Kentucky Derby and a West Virginia golf resort.
The order by Judge Jeffrey A. Meyer was a fraction of the more than $10 million in restitution federal prosecutors and the Connecticut Municipal Electric Energy Cooperative had sought from convicted defendants, former CMEEC CEO Drew Rankin, former Norwich Public Utilities General Manager John Bilda and former CMEEC board and Norwich utilities commission chairman James Sullivan.
Meyer ruled that Rankin as chief orchestrator of the trips, should bear more costs, totaling $374,400 ― 50% of the total ― and that Bilda and Sullivan should pay $187,200 each, 25% each, for their leadership roles.
They must personally pay the restitution to the victim, CMEEC.
But the orders were issued, "with the understanding that this order is stayed pending the defendant's appeal and entry of mandate by the U.S. Court of Appeals for the Second Circuit." All three defendants have appealed their convictions to the U.S. Second Circuit Court of Appeals in New York City.
The three were convicted in December 2021 following a month-long jury trial for their roles in planning and attending lavish trips by CMEEC board members and top staff and dozens of invited guests and CMEEC vendors to the Kentucky Derby and The Greenbrier resort in West Virginia in 2015.
The three CMEEC leaders and two others initially were indicted on charges of conspiracy and theft from a program receiving federal funds for junket trips in 2014, 2015 and 2016. But the jury acquitted former Groton Utilities commissioner Edward DeMuzzio and former CMEEC CFO Edward Pryor on all charges and convicted Bilda, Rankin and Sullivan only on a theft charge related to 2015 trips and deposits made for a 2016 trip that was canceled after public outcry over the trips erupted.
In his ruling, posted Monday on the case docket and affirmed in restitution orders posted Tuesday, Meyer rejected CMEEC's request for reimbursement for $9.5 million in legal fees the cooperative paid for all five defendants throughout the federal grand jury investigation and trial. Meyer wrote that the legal costs are "beyond what expenses may be subject to an order of criminal restitution."
Meyer wrote that CMEEC apparently decided on its own to advance the defendants their legal costs based on the cooperative's bylaws in place at the time and has separately sought coverage through its liability insurance in a civil suit. And CMEEC could pursue reimbursement from the defendants separately, based on documents each signed pledging reimbursement upon conviction.
Meyer agreed that the entire $ 502,242 cost attributed to the 2015 trips to the Kentucky Derby; an August trip by Rankin, Bilda, Sullivan and DeMuzzio to The Greenbrier; and a larger trip by the CMEEC board and top officials in October to The Greenbrier. Meyer noted, however, that Sullivan did not attend the October trip, as he had resigned from the cooperative board and Norwich commission in September.
The defendants' attorneys had argued for very limited restitution amounts, totaling only to the costs for themselves for the August 2015 trip to The Greenbrier, because the entire CMEEC Board of Directors had approved the Kentucky Derby and October Greenbrier trips.
Meyer rejected those arguments, calling them "recycled versions" of their arguments he had rejected in May, when he sentenced Rankin to serve 12 months in federal prison and Sullivan and Bilda to serve six months each. Meyer cited case law that attributes collective "property loss" for a convicted criminal activity.
Meyer wrangled over CMEEC's request for full reimbursement for its entire legal costs incurred during the grand jury investigation that started in late 2016, the initial criminal trial, sentencing proceedings and the restitution court proceedings that stretched into this past spring and summer. CMEEC had sought $465,846 to cover those costs.
Meyer cut CMEEC's requested restitution for its legal costs by 50%. He wrote that he considered the defendants' economic situations and the arguments that three of the five initial defendants were convicted only one count each of theft pertaining to the 2015 trips, rather than the broader indictment of five men on four counts each.
Meyer also cited the defendants' repeated argument made during the trial, sentencing and restitution hearings that CMEEC never sought reimbursement from the dozens of Kentucky Derby and Greenbrier trip participants for their share of the cost of the trips for themselves and their invited guests.
"It is baffling why CMEEC has not sought reimbursement from other trip participants," Meyer wrote, "especially those past and present fiduciaries who were well positioned to appreciate that the trips were an abusive and unlawful use of company funds."
