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Two plead guilty, pay back state in Pasco Hernando workforce fraud case

NEW PORT RICHEY — Marian Elizabeth Callaghan and James Louis Egan were supposed to be arraigned Thursday on charges that they scammed the taxpayer-funded Pasco Hernando Workforce Board Inc.

Instead, they came to court ready to resolve their criminal cases — and give back the taxpayers' money.

Callaghan, 47, and Egan, 60, both pleaded guilty to scheming to defraud and were sentenced to five years' probation. Adjudication was withheld, which means neither was declared a felon.

In exchange for that leniency, they agreed to immediately pay back $62,000 to the Pasco Hernando Workforce Board. And they've already paid $9,000 of the $18,000 it cost the Florida Department of Law Enforcement to investigate their fraudulent scheme.

It was all part of a pre-arranged plea bargain, said Pinellas-Pasco Assistant State Attorney Mike Halkitis.

Neither of the defendants had a prior criminal record, the prosecutor said, and it was more important for the state to get its money back than to send those two to prison.

"We wanted the state to be compensated," Halkitis said. "We know how bad the state's coffers are right now."

But the deal hinged on immediate reimbursement of the $62,000.

"That's the most important thing," said Pasco County Commissioner Michael Cox, who is also on the workforce board. "Obviously they have permanently scarred their record for the rest of their lives. But it sounds like justice was served in this instance."

The judge signed off on the deal, the prosecutor said, only after defense attorney Dean Tsourakis said he had the money in his law firm's account and had already mailed the check.

"A fair disposition was reached that was negotiated and agreed upon by all parties involved," was Tsourakis' only comment on the case.

The two Hudson residents worked for Optima HVAC and Axon Technologies, companies that applied for training grants from the workforce board.

The problem, Halkitis said, is that the companies weren't training the workers they were paid to.

"They fabricated a training schedule for workforce employees when no training was being done," the prosecutor said.

The arrests came after an Office of Inspector General's report outlined allegations of financial mismanagement and conflicts of interest at the workforce board. The allegations centered around a work force board program — paid for with federal money — that let businesses split the cost of training employees with the government.

According to the report, Lee Ellzey, then president of the board, approved the Optima and Axon grants after his own staff had denied them.

Both New Port Richey companies were owned by Steve Jensen — who was chairman of the workforce board at the time, and thus Ellzey's boss.

Last year the Pasco County Commission removed Jensen from the board of directors, which then fired Ellzey.

Callaghan and Egan each faced up to five years in prison — and they could still end up there, Halkitis said, if the state doesn't get all of its money back in that time.

Two plead guilty, pay back state in Pasco Hernando workforce fraud case 04/15/10 [Last modified: Thursday, April 15, 2010 9:04pm]
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