PORT RICHEY — Amid reports of massive water loss, crumbling pipes and a missing well, the City Council has often looked for guidance from its resident utility expert: Mayor Richard Rober.
Rober, 50, gained repute from city leaders after a decade at the helm of Gator Water and Wastewater Management Inc., a Pasco utility contractor he ran with his wife, Averill. The couple dealt in the rigorously technical industry of public water systems, hiring out operators to water and sewer plants. Richard Rober served as the brains behind the company's finances.
After his election in 2007, the Robers sold their business to a Hudson utility operator known as Florida Utility Group Holdings Inc., with a promise that their company was free of all debts. But a closer review by the new owners exposed what they say was orchestrated by Rober during his years as vice president: a six-figure tax fraud.
In a lawsuit filed late last year, the utility claims Rober funneled about half a million dollars of company money into a personal fund he hid from accountants, the utility and the IRS, spending it instead on family finances, the couple's Hummer and repairs for their boat.
Rober's attorney has written that the IRS has never questioned the company books, and that any allegation of outstanding taxes is "speculative and unrealized." He did not respond to three messages left at his office last week. Rober would not comment for this story, saying, "I can't do that. It's a private matter."
But last year, Rober gave sworn testimony in a deposition, saying he "skimmed" money into the unreported account and did not pay taxes on it.
"We fully trusted Richard Rober. There was no doubt as to his credibility. He's the mayor. Why wouldn't you trust him?" Florida Utility chief financial officer David Dilena said in an interview last week. "We were blindsided, out of nowhere. … It was just a slap in the face."
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The Robers' company, handed down to Mrs. Rober after her mother's death in 1993, owned and operated a Hudson plant known as the Sunnydale sewer system. Local homeowners wanting to tap into the system rather than rely on a septic tank paid a fee that the Robers deposited into a SunTrust Bank fund they called the "Sunny account."
After Sunnydale closed in 2000, Mrs. Rober said in her deposition, the company opened another account at Synovus Bank for "sheer convenience." It became the company's main treasury and was accounted as such on tax returns. Yet the Robers kept depositing customer checks into the Sunny account.
From 2000 to 2007, Rober estimated, the Sunny fund served as his "personal account." It paid for repairs on his boat; the purchase and payments for the couple's Hummer; rent, car detailing and a weekly stipend for Rober's mother, Angelina; tools from Home Depot; a deposit for a Clearwater Beach resort hotel room during a wastewater conference; and a loan for a former employee in "legal trouble" over a charge of drunken driving.
Asked by John Colton, the attorney representing Florida Utility, whether it was correct that "the Corporation never paid any taxes on the SunTrust revenues," Rober said yes. Asked how he separated that account from the business' disclosed coffers, Rober replied, "There was no particular methodology that caused me to choose one over the other. I just did it the way I did it."
Rober said in his deposition that he told only his wife and mother about the account. Though he estimated he deposited about $5,000 of revenue into the fund per month, he kept it from two accountants hired to compile corporate tax returns.
That exclusion seemed to chafe the company's first accountant, John Miller, who learned of the fund only after finding documents for it on Rober's desk.
"He inquired about it, and I told him of it. And he sent us a letter saying that he would no longer render services," Rober said in his deposition. Miller would not comment for this story, citing client confidentiality.
"It was at my choosing," Rober said in the deposition, "not to give them that account."
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In 2007, the Robers signed away 7,000 shares and the assets of Gator Water to Florida Utility Group Holdings for yearly installments totaling $380,000.
The new owners kept Rober on the payroll for about a year at a $78,000 salary. Mrs. Rober, who had been president, was not retained.
Dilena, in shifting the Robers' handwritten checkbooks into the utility's computerized QuickBooks account, began to notice large gaps in the revenue. Customers charged for water or sewer service were not marked as having fulfilled their debt, though they said they had paid and had the checks to prove it.
Dilena said Rober gave no explanation for the missing money. But when customers sent in copies of their cashed checks, Dilena saw they were addressed to Gator Water but stamped by SunTrust Bank — an account the Robers had never disclosed. Records provided by the bank, according to Florida Utility, totaled the Robers' hidden fund at more than $500,000.
Florida Utility, "shocked" at the finding, stopped paying the Robers before their last $140,000 installment. The couple last year filed a lawsuit in Pasco circuit court alleging a breach of contract, three months after Rober was re-elected as mayor without opposition.
The utility responded with a countersuit, saying the Robers had provided a "fraudulent, deceptive and deficient" accounting of revenue that set them up for a major tax liability.
Rober contends he made no effort to hide the Sunny account, leaving it on his desk for anyone to see. His attorney said that, because the IRS has never announced any tax liability, there's no reason to believe he owes any outstanding payments. (Federal disclosure laws shield tax payment and audit histories from public record, an IRS spokesman told the Times.)
But when asked in his deposition whether Sunny account taxes would still need to be paid, Rober said, "I think the answer would be rather complicated. But it's possible."
Neither of the Robers, who property records show bought a $415,000 Island Drive home in 2005 on a canal off the Pithlachascotee River, still work with public water systems. Mr. Rober sells concrete and blocks for B.E.T.ER Mix Inc. in Hudson. Mrs. Rober, who owned the now-closed Ave's Boot Camp in Port Richey, works as a personal trainer for an Odessa fitness center.
Both sides attended a mediation conference in Clearwater last month. The case, Colton said, continues to move toward trial.
Times researcher Carolyn Edds contributed to this report. Contact Drew Harwell at firstname.lastname@example.org or (727) 869-6244.