Aaron Zahn, whose quick rise to the top leadership position at JEA was followed by his ouster amid accusations of trying to loot the city-owned utility, was sentenced July 30 to four years in prison for his conviction on wire fraud and conspiracy charges.
Senior U.S. District Judge Brian Davis imposed the sentence at 5:33 p.m. in a 12th-floor courtroom in the Bryan Simpson U.S. Courthouse in Downtown Jacksonville, a milestone event in a legal saga that stretches to Zahn’s appointment to the JEA board by former Mayor Lenny Curry in 2018.
The former JEA CEO, who faced up to 25 years imprisonment on the charges, displayed no visible emotion as Davis delivered the sentence. He left the courthouse a short time later without answering questions from reporters.
Davis sentenced Zahn to 48 months imprisonment on each of the two charges, ordering the sentences to run concurrently as opposed to back-to-back. He ruled that Zahn could report to prison voluntarily, and in response to a request by the defense gave him 90 days to report for incarceration.
Zahn did not offer any remarks in his own defense. His lead attorney, Eddie Suarez, told Davis he had advised Zahn not to speak in anticipation of an appeal.
Assistant U.S. Attorney Tysen Duva, who had asked Davis to impose a sentence of at least five years, said afterward that the government had no disagreement with the outcome and felt it would help deter white-collar crime.
He described the four-year term as a long time “for somebody who, coming out of school, applying to run a municipal utility, never thought he was going to do one day.”
“That’s a pretty substantial sentence and we’re pleased with the consideration that Judge Davis gave us.”
Convicted March 15
Zahn was convicted as charged March 15 during a rare two-jury trial in which one jury heard his case and the other heard the case against a co-defendant, Ryan Wannemacher, former chief financial officer of JEA.
Wannemacher, who was also charged with wire fraud and conspiracy, was found not guilty of both charges.
Prosecutors accused Zahn and Wannemacher of scheming to craft a bonus plan, known as the Performance Unit Plan, that would have paid them tens of millions of dollars in undeserved bonuses through privatization of JEA. The two also were alleged to have misled the JEA board into approving a sale of JEA to trigger the PUP and bonuses.
Zahn became CEO of JEA in November 2018, nine months after Curry had appointed him to the board. After two months on the board, he had been named interim CEO after the resignation of Paul McElroy.
In August 2019, the JEA issued an invitation to negotiate a sale of the utility with private companies, a move followed by claims by Zahn that the utility would have to lay off 29% of its workforce and raise rates by 26% if JEA remained publicly owned.
The Daily Record reported that Florida Power & Light Co. parent NextEra Energy Inc. bid $11.05 billion for JEA.
As the sale process moved forward, concerns about the situation in the community and among City Council members led to a Council Auditor memo warning that the PUP could cost the city up to $636 million if the utility were sold. The auditor’s report triggered an inquiry by Council members Ron Salem and Rory Diamond, which was followed by a vote by the JEA board to fire Zahn in December 2019.
In March 2022, Zahn and Wannemacher were indicted.
During the trial, the government contended that Zahn would have received as much as $40 million had the plan been completed.
The sale also would have needed Council approval and a public referendum vote in favor.
Defense disputes government facts
In a possible preview of points that Zahn’s defense team will present in an appeal, defense attorneys Suarez and Brian Albritton characterized a presentencing report prepared by the government as containing facts of the case as inaccurate and lacking proper context.
Suarez went paragraph-by-paragraph through the report, in many cases echoing the arguments that the defense presented during Zahn’s trial.
For example, regarding a mention in the presentencing report of the PUP payouts being tens of millions of dollars, Suarez told Davis the amount of the bonuses wasn’t known because “there were still a number of steps that needed to take place before the PUP was finalized,” such as reviews by lawyers and City Council.
“We don’t even really know what the PUP could have or ultimately would have looked like,” he said. “The notion that it would have paid millions of dollars to JEA executives is simply inaccurate.”
In a presentencing memo, Zahn’s attorneys stated that imposing a long prison sentence was not a just outcome because the jury “essentially found” that Zahn’s offense was a breach of trust that resulted in “no actual loss to any victim, and no restitution is sought.”
“For that, a promising young man has become a convicted felon, whose life has been ruined,” the defense wrote.
During the hearing, Albritton said Zahn, who is 44, and his family had been “terribly impacted” by the scandal and legal proceedings, including his children being bullied and Zahn suffering “crippling anxiety and PTSD.” He urged Davis to grant Zahn probation.
“With the exception of this offense, he’s lived a law-abiding life,” he said.
Prosecutors seek ‘multi-year term’
Duva, who represented the government with colleague Arnold Corsmeier, called Suarez’s critique of the presentencing report “a closing argument.” Duva described Suarez’s statements as inappropriate argument based on language describing facts that the jury determined in finding Zahn guilty.
“What we’re doing here is acting like there wasn’t a trial,” he said. “Well, there was.”
Heading into the sentencing hearing, prosecutors filed a memorandum seeking a “multi-year term of incarceration” for Zahn. In the memo, the government said Zahn “corruptly conspired to steal from the city of Jacksonville and perpetrate the largest fraud in the history of the city. When Zahn became the CEO of JEA, his sole focus was privatization, and obtaining substantial wealth during the process.”
Lee Wedekind, an attorney hired by JEA to aid the utility’s legal proceedings against Zahn, said Zahn’s scheme had cost JEA $76 million in damages, such as a downgrading of its rating on $1.4 billion in water and sewer bonds.
Countering favorable characterizations of Zahn’s character by his family and other supporters, Wedekind asked Davis to consider how his actions affected JEA’s workforce under his leadership.
“He put the jobs, the livelihoods, of 574 employees and their families at risk so he could make tens of millions of dollars,” Wedekind said. “JEA’s employees were constantly in fear of losing their jobs during Mr. Zahn’s tenure as CEO.”
Wedekind said Zahn had displayed “zero remorse, zero contrition” and had accepted no responsibility for his actions.
“This is the real Aaron Zahn,” he said. “We ask the court’s sentence reflect that reality.”
‘An ideal husband and father’
Six people spoke in support of Zahn, starting with his father-in-law, Superior Court Judge and former U.S. Attorney Edgar W. Ennis Jr. of Macon, Georgia.
Ennis told Davis that Zahn had “displayed the highest character, integrity and honesty” during his 13-year marriage to Ennis’ daughter, Mary Branan Ennis Zahn.
“He is an ideal husband and father, and therefore an ideal son-in-law,” Ennis said, adding that the guilty verdict against him had not changed his view of Zahn.
Ennis said he was suffering several health issues and that he and his wife were “grieving that (Zahn) might be snatched away from us … and incarcerated with dangerous individuals.”
Ennis urged Davis to grant probation despite what he described as the Jacksonville media’s “lust for blood” in the case.
“It cannot be said that Aaron poses any risk to society,” Ennis said. “He’s both a gentleman and a gentle man.”
Several Zahn supporters wrote letters on his behalf, which Davis told Suarez he had “read, considered and, if it’s any consolation, been moved by.”
Mary Branan Ennis Zahn told Davis that the couple had relocated from their Jacksonville home amid bullying of their children, ages 10, 7 and 5, and what she described as “media tirades destroying (Zahn’s) reputation and unfairly describing him as a monster.”
Gallery overflows with observers
Zahn and more than a dozen supporters linked hands and prayed quietly in a hallway before entering the courtroom.
Dressed in a charcoal suit, white shirt and solid-color tie, Zahn stood for several minutes and chatted with his defense team before Davis entered the courtroom.
As part of a case that drew significant media coverage and public scrutiny stemming from the JEA trial, the hearing drew an overflow gallery of Zahn supporters, media members and other observers. Davis allowed several to sit in the jury box, where they were backed by the floor-to-ceiling windows along the east wall of the courthouse.
After the hearing was underway, Davis stated that he had denied a motion by Zahn for an acquittal or a new trial.
Davis: Crime was ‘deceit and greed’
In explaining his sentence to Zahn, Davis noted that he had received letters from a large number of people who pleaded with him to grant probation. He described the supporters as “a panoply of humanity unlike any I have seen in any other case.”
Only one writer acknowledged that Zahn had done something wrong, he said, or admitted what he described as a “sad but inescapable truth that good people can and do make bad decisions.”
“And in this instance, you have truly done that,” he told Zahn.
Davis further told Zahn that his crime was a combination of deceit and greed.
“The combination of deceit and greed can blind good people to the error of their ways,” he said. “The combination of deceit and greed can, as you have experienced, result in personal tragedy.
“What, other than greed, can account for your belief that you could or would be entitled to millions and millions of public dollars after serving the public for less than two years?”
Davis said public corruption “epitomizes disrespect for the law” and that the sentence was aimed at deterring others.
Davis rejected a request by the government to fine Zahn $200,000 but ordered him to serve one year of supervised probation after his release and participate in substance abuse and mental health treatment programs.
JEA: Timeline of abandoned sale leading to indictments, conviction of CEO. Story here.