More legal troubles for Rodino in lawsuit over Chinese business dealings
Posted: 03/03/2013 at 7:15 am
By: Tim Vandenack
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Terry Rodino, an Elkhart County commissioner, shakes hands with an official from the Chinese city of Jinhua during a visit there in March 2011. The image comes from a news item on the visit on 36tv.cn, a Chinese website. According to a suit filed by a pair of Rodino’s estranged business partners, the handshake came after Rodino and his counterpart from Jinhua signed a “friendly-city-relations agreement and memorandum of commercial understanding.” (Photo Supplied)
In another suit filed by Rodino’s rivals, Amit Shah and Tim Dugle, they accuse him of using his position as county commissioner to help secure the sale of five recreational vehicles to a Chinese-owned business and thus profiting personally. Rodino earned at least around $100,000 as middle man in the deal, according to numbers in the Feb. 14 lawsuit, as did his partner in the company that engineered the $1.63 million transaction, American Travel Palace.
Rodino’s profits, says the suit, “were connected directly to the efforts of Elkhart County, and specifically the Elkhart County commissioners, to develop business and economic opportunities in China for businesses and citizens of Elkhart County.”
The suit, filed in U.S. District Court in South Bend, goes further. Because of those profits and other alleged misdeeds, it charges, Rodino violated the federal Racketeer Influenced and Corrupt Organizations Act, or RICO, originally created to give federal prosecutors a tool to go after organized crime. The two plaintiffs seek reimbursement from Rodino and the other defendants for the “millions of dollars embezzled and laundered” in the RV deal and from other companies Dugle and Shah jointly own with Rodino.
Neither Rodino nor his attorneys at the Mishawaka law firm May Oberfell Lorber responded to queries for comment. Rodino, now in his third term as a commissioner, has yet to formally respond in court to the lawsuit.
Others singled out in the suit, though, went on the record.
“I have seen no evidence whatsoever supporting the allegations in that complaint,” said Elkhart lawyer Chris Riley, representing Elkhart businessman Aaron Zou, Rodino’s partner in American Travel Palace. “Aaron sincerely looks forward to vindicating himself.”
Zou is another defendant in the federal suit and Dugle and Shah charge him with making a $30,000 “kick-back” to Rodino “as Elkhart County commissioner.” Riley wouldn’t get more specific in his comment, citing the ongoing nature of the case.
Gordon Lord, legal counsel for Elkhart County, also spoke out. He’s not a defendant in the suit, but Shah and Dugle go after him, suggesting, among many other things, that his actions, along with those of Rodino, “constitute a bribery and/or kickback scheme” that violates their duties as county agents.
“They don’t even offer any evidence. They just call it that,” said Lord. He never took part in talks about business in China, he emphasized, and had no role in Rodino’s dealings in the nation and never earned any money from any China transaction.
At the request of county commissioners, Lord said, he helped file the legal papers to form a company co-owned by Zou that was to have promoted investment in Elkhart County by Chinese businessmen through a federal immigration program. Elkhart County commissioners in December 2010 agreed to provide $10,000 to aid the firm, Indiana Gateway Fund.
That effort was later abandoned, though, and the $10,000 was never spent, according to Lord. Elkhart County Administrator Tom Byers and Elkhart County Commissioner Mike Yoder echoed that.
THE CHINA CONNECTION
Rodino’s dealings in China and the RV sale are hardly the only issues brought up by Dugle and Shah in their new lawsuit, a hefty 79-page document, with another 265 pages in exhibits. But they’re the only issues that pertain to his position as Elkhart County commissioner, an elected, part-time post.
The other charges mirror allegations Dugle and Shah make in three other lawsuits now winding their way through LaGrange Circuit Court in LaGrange. Variously, Dugle and Shah — minority partners in a pallet firm and related companies controlled by Rodino, the so-called Duro Entities — say Rodino mismanages the firms and has improperly diverted funds from the companies. They seek reimbursement for those funds.
Rodino, in the LaGrange cases anyway, has disputed the charges.
Even the reference to the China RV deal isn’t completely new. It’s mentioned in the LaGrange cases. However, Dugle and Shah delve more deeply into the matter in the new federal lawsuit, providing additional details and making it more of a point of contention.
The deal apparently had its roots in Rodino’s varied visits to China, which he’s discussed publicly in recent years at meetings of Elkhart County Commissioners. He’s always said he used his own money in traveling there, and Byers, Lord and Yoder say the same.
Rodino’s first apparent visit came in July 2010, when he traveled to Jinhua in Zhejiang province in eastern China , inking what he termed a “sister city” agreement with officials there. That agreement was meant to promote cultural and possible commercial exchanges.
He visited again in March 2011, traveling with Zou and representatives from the Elkhart County Convention and Visitors Bureau, and said on his return that some sort of commercial proposal was potentially in the works. He reconfirmed the sister city accord with Jinhua, and a news clip made by a Chinese media outlet shows Rodino and others in his group in a formal meeting with Chinese officials.
About a month later, according to the new lawsuit, Rodino and Zou formed American Travel Palace, or ATP, and on May 25, 2011, ATP paid $100,000 to an Elkhart RV manufacturer toward the purchase of recreational vehicles. The federal lawsuit doesn’t name the company, but in the LaGrange suits, the firm is identified as Forest River.
A Forest River rep didn’t return a call seeking comment.
In July 2011, Galaxy Powersports, a Dallas-based subsidiary of BenZhou Vehicle Industry Group in Zhejiang province, wired $231,541 to ATP. Then the Beijing-based Bank of China wired $1,399,985 more, the suit says. That made for a total payment of $1,631,526.
A few days later, ATP bought five RVs — meant for China — for $1,056,166.
USING HIS POSITION?
It’s not crystal clear what share of the difference, $575,360, ATP, Rodino or Zou pocketed. ATP also covered the cost to ship the five RVs to New York.
The suit, though, alludes specifically to $104,779.90 in payments from ATP to Rodino after the deal, through March 2012. It itemizes $131,305.55 to Zou.
More germane to the suit, perhaps, Dugle and Shah charge that $50,000 invested in ATP by a Rodino-controlled firm called Apex Pallet came “from the fraudulent schemes perpetuated by Mr. Rodino against the Duro Entities.” In other words, Dugle and Shah charge that money from the Duro Entities, which they co-own, was improperly funneled through Apex to ATP. Since they have no interest in APEX or ATP, the reasoning follows, they lost out.
As for the allegation that Rodino used his position as Elkhart County commissioner to secure the RV deal and profit personally, the suit points to “ongoing efforts by the county to develop business and investment opportunities for Elkhart County businesses and individuals.” One of county government’s tasks is to promote economic development, the reasoning goes, and Rodino was the appointed official to carry out that mission in China — not for personal gain but for the betterment of the entire county.
“Mr. Rodino was not sent to China because he owns pallet companies. He was sent to China because he is an Elkhart County commissioner,” says the suit. It later picks up: “One of Mr. Rodino’s central duties as an Elkhart County commissioner, for which he is paid an annual salary of approximately $40,000 per year, is to help generate business and economic opportunities for Elkhart County citizens and businesses.”
Dugle and Shah’s attorney, John Henning of Indianapolis, declined to elaborate when contacted, citing the ongoing nature of the case. That element of the suit, among others, factors in the alleged RICO violation.
In fact, though, Rodino was not “sent” to China by county leaders, at least as told by Yoder, his fellow county commissioner. Yoder described Rodino’s China trips as personal initiatives, paid for out of his own pocket and done on his own initiative. The county has spent no money as part of Rodino’s travels, county officials have emphasized.
“Terry has done all of this on his own. It’s part of his private business,” said Yoder. He went there to talk up Elkhart County and promote cultural exchanges, yes, but also to pursue potential business ventures.
As Yoder sees it, Rodino did a good thing. He got Elkhart County’s name out among potential Chinese investors.
“I’m not sure how this is bad for the community,” Yoder said. “It certainly isn’t in his county commissioner’s job description to do that.”