How Ohio deputy treasurer pulled off biggest bribery scheme in history

Updated Feb 05, 2016

Former Ohio Deputy Treasurer Amer Ahmad was able to pull off the biggest bribery and kickback scheme in state history because his authority went unchecked and office employees lacked the financial expertise to see the signs of the crime, according to a 60-page independent report that dissects what went wrong.

“He came to see himself as not only free from oversight but entitled to act in his own self-interest. His complete control of the Treasury not only created the opportunity for the crime; according to him, it motivated it,” said the report prepared by lawyers at BakerHostetler. Ahmad carried out the crimes in 2009 and 2010, while working for then Treasurer Kevin Boyce.

After Ahmad and his co-conspirators were indicted in August 2013 on corruption charges, current Ohio Treasurer Josh Mandel hired BakerHostetler to conduct an independent review, identify weaknesses that could open the door to insider abuse and recommend controls to mitigate future risk.

BakerHostetler interviewed Ahmad in October 2015 while he was in the Butler County Jail awaiting assignment to a federal prison.

Ahmad, a Canton native with an Ivy League education and investment banking experience, joined the treasurer’s office in May 2008 under then Treasurer Richard Cordray, a Democrat. Ahmad stayed on when Gov. Ted Strickland appointed Boyce as state treasurer in January 2009. Boyce, who lacked investment experience, relied heavily on Ahmad to run the investment side of the shop and Ahmad consolidated power in the office, the report said.

According to federal investigations, Ahmad engineered two schemes in the state treasurer’s office in 2009 and 2010:

— Re-write the investment strategy to churn up commissions and steer the work to Hampton Capital Management, which was run by his high school buddy Doug Hampton, and then take kickbacks from Hampton routed through two other co-conspirators.

— Conduct a pay-to-play operation that funneled bribe money to himself and co-conspirator M. Noure Alo and illegal political campaign donations to Boyce in exchange for steering a contract to handle billions of dollars in public pension money to Boston-based State Street Bank & Trust.

Ahmad, Alo, Hampton and a fourth conspirator are now serving sentences in federal prison. Boyce, who is now a state legislator running for Franklin County commissioner, has not been accused of wrong doing.

The report, released Friday, notes that some state treasury employees knew or should have known “that something was rotten.”

“…the lack of financial expertise meant that only a few employees had the understanding to see the signs of the crime. According to Ahmad, Boyce never understood the investment/trading activity in the office,” the report said.

Ahmad told BakerHostetler that Boyce attended a March 3, 2010 meeting at Alo’s law office with representatives from State Street Bank, Boyce’s political fundraiser Sara Guice, Alo and Ahmad. The group discussed how State Street wanted state business and “according to Ahmad, Boyce referred to the election, saying that ‘we are in the fight for our lives against a well-funded candidate’ and that he was looking for all the help he can get,” the report says.

Boyce initially denied attending the meeting, even though state emails show a club sandwich had been ordered for him. But Boyce told BakerHostetler that he showed up, had a snack and left after listening to some introductions. He denied Ahmad’s characterization of the meeting.

State Street Bank and the U.S. Securities and Exchange Commission entered a settlement deal last month where the bank paid a $12 million fine and admitted no wrong doing.

BakerHostetler recommended that the treasurer’s office implement controls, including requiring multiple approvals for wire transfers, hiring and retaining more employees with financial experience, require documentation of the “spread” or commission brokers and traders make on transactions. The report said one of the most startling documents uncovered among the 20,000 pages reviewed was an email from First Allied Securities, which worked with Hampton, that noted that Ahmad specifically said the spreads should not be disclosed.

“In Ahmad’s own words from his interview, if the spread is disclosed then ‘the corruption is over,’” the report said.

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CONTINUING COVERAGE

Laura Bischoff in our Columbus Bureau has been following this story for more than two years. Our team will continue to cover it as developments happen.

Here’s a look at some of our past coverage:

May 22, 2010: Bank hired lobbyist with Boyce aide ties just days before landing state contract

May 24, 2010: Lobbyist’s wife works in office that gave $1M state contract to client

Aug. 15, 2013: Former deputy treasurer accused of taking bribes, money laundering

Aug. 19, 2013: Ex-Ohio deputy treasurer enters not guilty plea on bribery charges

Aug. 21, 2013: Ohio GOP calls on Boyce to answer questions about deputy treasurer

Aug. 26, 2013: FBI started treasurer probe during Boyce administration

Aug. 28, 2013: Ohio GOP lobs more questions at former state treasurer

Sept. 4, 2013: Emails show close ties in the state treasurer’s office

Sept. 6, 2013: Indicted former Ohio deputy treasurer hired ex-state lawmaker for Ohio job

Sept. 14, 2013: Former state treasurer silent on federal probe

Oct. 19, 2013: Record sought by feds went missing

Dec. 20, 2013: Ohio lobbyist pleads guilty to corruption

Dec. 23, 2013: Former Ohio deputy state treasurer pleads guilty for fraud, taking bribes

April 25, 2014: Feds issue arrest warrant for former deputy Ohio treasurer

April 28, 2014: Former deputy Ohio state treasurer wanted fake passport, now on the run

April 30: US tries to get Ahmad back from Pakistani officials

May 1: Fugitive former Ohio official kept diary of his escape to Pakistan

May 28: Fugitive vacationed in Hawaii before fleeing country