Two people will face fraud charges stemming from an investigation into training grants administered by the Pasco Hernando regional work force board, a state official said.
Authorities have not released the names of the two people, but said they worked for a company owned by the former work force board chairman, Steve Jensen.
An e-mail forwarded from the head of the state work force agency to state Sen. Mike Fasano said the two face charges of conducting an organized scheme to defraud, a first-degree felony.
"Arrests Coming in the Pasco Hernando Case," was the subject line of the e-mail sent from the office of Cynthia Lorenzo, director of the Florida Agency for Workforce Innovation. The e-mail said the warrants were issued Tuesday and arrests could come possibly Wednesday.
Mike Morrison, a spokesman for the Florida Department of Law Enforcement, the agency handling the investigation, said late Wednesday that no arrests had been made and that the case remained active.
The company that was involved in the investigation was Optima Technologies, a Port Richey company owned by Jensen, who until last June served as chairman of the Pasco Hernando Jobs and Education Partnership, commonly known as the work force board.
Jensen resigned from the board shortly after details of the investigation became public. Optima HVAC and Axon Technologies, which make parts for laser printers, filed for Chapter 11 bankruptcy protection in December.
The companies were at the heart of a controversy over a work force board program, paid for with federal money, that allows businesses to split the cost of training with the government.
A June report from the state Office of Inspector General, prompted by a whistle-blower's complaint, found that Lee Ellzey, then-president of the Pasco Hernando Jobs and Education Partnership, approved $123,000 in in-house training costs for Jensen's Optima HVAC and Axon Technologies even after lower-level staff denied the application.
As work force board chairman, Jensen was Ellzey's boss. After the report became public, Ellzey was fired and his senior vice president, Terry Williams, resigned.
The rate for the training came to about $3,844 an hour, which was "extraordinarily high and deviated from established practice," the 48-page report said.
Ellzey has said he had not seen a breakdown of the costs, but it was not unusual for such lump sums to be paid for some training programs.
The payments were never actually made to the trainer, Jim Egan, a man one staffer described as Optima's "sometimes president," the report said. It said Egan was listed on the application as an outside consultant. The rules allow for outside trainers to be paid at higher rates. In-house staffers conducting training are supposed to receive half the hourly rate they make at work, with the company paying the other half.
Investigators who questioned Jensen about the program said he didn't know how much money was being paid to Egan. He said one of his employees, Sam Callaghan, handled the applications.
"Sam (Callaghan) pretty much is on auto-pilot with that," Jensen told investigators, according to the report.
Egan never spoke with investigators in person due to scheduling conflicts, the report said.
A review of his invoice listed James Egan Consulting Services. However, that entity was not listed with the Florida Division of Corporations.
The address was the same as Optima Technologies. A phone number listed was for a company reached, Superior Solid Surfaces, which specialized in countertops, the report said. The owner said he did not know a James or Jim Egan.
Callaghan never responded to the investigators' request for an interview, the report said.
A separate grant application for training listed the trainer as a Ralph Newman of Orlando, but the address provided belonged to another Optima office in Orlando. Jensen told investigators that Newman was the company's groundskeeper.
Lisa Buie can be reached at firstname.lastname@example.org or (813) 909-4604.