CLEVELAND, OHIO (May 15, 2018) – An internal investigation by the Board of Trustees of the Greater Cleveland Regional Transit Authority (RTA) has revealed former Board President George F. Dixon III improperly received more than $1.1 million in healthcare benefits and unpaid premiums for insurance provided by RTA for the 24-year period ending March 1, 2018. In addition, Mr. Dixon failed to reimburse RTA for extensive personal use of his RTA-issued cell phone over a 10-year period.
Georgine Welo, mayor of South Euclid and RTA Board of Trustees member, said Dixon abused the public’s trust for personal benefit.
“Our policy was clear,” said Mayor Welo. “Board members could enroll in RTA’s healthcare plan but had to pay 100% of the healthcare premiums to be eligible. The investigation showed that Mr. Dixon enrolled in April of 1994 and after 1997 never fully paid his premiums in accordance with board policies.”
Effective immediately, board members are not eligible for RTA’s healthcare plan. Also, board positions will be rotated assuring new voices and fresh perspectives leading the board.
Dixon, who served as RTA board president for 24 years, resigned March 29 at the board’s request. Dixon in 1994 signed up for healthcare through a program offered to all board members by RTA, which is self-insured. No other current board members are enrolled in the RTA healthcare plan.
The board immediately launched an investigation, led by Anthony Garofoli, Executive Director of Internal Audit at RTA, and Walter|Haverfield LLP Managing Partner Ralph Cascarilla, former chief of the White Collar Crime section of the Office of the United States Attorney for the Northern District of Ohio. Garofoli has more than 37 years of experience in audit work. Cascarilla represents individuals and corporations in a wide range of government white-collar criminal investigations.
According to RTA, Dixon owes $141 thousand for the unpaid premiums, including interest, and $970 thousand for healthcare benefits for which he was ineligible between 2003 and 2018. Healthcare benefit records prior to 2003 were unavailable from RTA’s insurance company.
“It is very painful to learn that Mr. Dixon abused his position of power to circumvent internal controls for so long,” said Mayor Welo. “Mr. Dixon betrayed us. Our forensic audit shows that he actively manipulated the system. It is our responsibility as custodians of taxpayer money to pursue every legal avenue available to make this right for the citizens of Cuyahoga County. We will do whatever it takes to make sure that happens.”
Welo said the RTA board will now refer the matter to the Cuyahoga County Prosecutor, the Auditor of State and the Ohio Ethics Commission.
“Our investigation found improper and active circumvention by Mr. Dixon of RTA’s internal controls and management systems which allowed him to receive health care benefits to which he was not entitled,” Cascarilla said.
RTA’s healthcare plan is administered by the organization’s human resources division, which was ultimately responsible for Mr. Dixon remaining on the plan. RTA management will address those employees responsible per the GCRTA code of ethics and personnel procedures.
The accounting department collects health care premiums and failed to account for Mr. Dixon’s non-payment. “While the people in the accounting department most directly responsible for collecting healthcare premiums during Mr. Dixon’s tenure are no longer with RTA, the individuals who are in place now identified the problem and took appropriate steps to bring the matter to light,” said Welo. “Our investigation looked very carefully at all 30 individuals who have served on the Board of Trustees since 1994, and at internal staff as well. Mr. Dixon was found to be the only RTA trustee who abused the system and his position.”
The board’s investigation was comprehensive:
• RTA internal audit personnel devoted more than 2,200 hours to this investigation from February 22 to the present, while outside auditors spent another 88 hours during that same time period.
• The investigation involved the review of more than 700,000 emails, 24 years of document history from computer workstations, and 7,200 paper records.
“The investigation was executed over the course of the last 75 days by Mr. Cascarilla, Mr. Garofoli and all 7 members of RTA’s internal audit team working seven days a week,” said Welo. “I want to thank them for their thorough work. I am confident that new controls we put in place today will prevent this kind of abuse from happening again.”