Ohio Man Guilty of Embezzlement to Fund Extensive Gambling Habit

Article by : Erik Gibbs Nov 23, 2023

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United States Attorney Rebecca C. Lutzko recently announced that Arthur Fayne, 61, overseeing the development of the New East Side Market, was found guilty of all nine counts of wire fraud.

Fayne embezzled over $880,000 intended for the residents of Cleveland’s Glenville neighborhood, diverting the funds for an extravagant lifestyle that included extensive casino gambling.

The trial, spanning five days, was presided over by US District Judge Solomon Oliver, Jr. Court documents and trial testimony revealed Fayne’s ownership and management of Business Development Concepts, LLC (“BDC”), where he supervised construction projects.

Northeast Ohio Neighborhood Health Services, Inc. (“NEON”), a nonprofit corporation, functioned as a federally qualified health center network, providing primary care medical services in the Cleveland, Ohio area.

As part of its mission, NEON, with the assistance of a subsidiary, launched a project aimed at transforming an abandoned building in the Glenville neighborhood into the New East Side Market, a grocery store and a community center.

The objective was to address the persistent challenges of food deserts in Glenville.

Fayne was entrusted by NEON with the management of the project and the disbursement of payments to vendors. However, Fayne abused this trust by misappropriating funds intended for the project.

Fayne was found guilty of embezzling approximately $759,105.92, funds designated for paying the project’s general contractor, the Albert M. Higley Company (“AM Higley”).

To execute this embezzlement, Fayne concealed invoices received from AM Higley while submitting his invoices to NEON, falsely claiming they were for payments to AM Higley. Consequently, he diverted over $750,000 for personal use that was originally earmarked for AM Higley.

Fayne was also found guilty of embezzling approximately $125,923.86 in funds designated for the audio-visual contractor Crescent Digital.

Despite Crescent Digital returning about half of the initial payment, stating that they could only accept a deposit at that time and would invoice BDC for the remaining balance upon project completion, Fayne chose not to retain those funds for Crescent Digital.

Instead, he had the money deposited into his wife’s account and subsequently diverted these funds for his gain.

The embezzled funds were used to fuel Fayne’s lavish lifestyle, which included extravagant spending and gambling substantial sums, occasionally reaching tens of thousands of dollars in a single night.

Evidence revealed that Fayne incurred losses exceeding $1 million at casinos throughout the project.

His expenditures included gambling at the JACK Cleveland Casino, wagering at a New Orleans casino and personal purchases such as Louis Vuitton merchandise, services at a New York City spa and a luxury cruise departing from Miami.

The investigation leading to the indictment was carried out by the Cleveland Division of the FBI and the US Department of Housing and Urban Development’s Office of the Inspector General. Assistant US Attorneys Brian M. McDonough and Vanessa V. Healy are prosecuting this case.