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Findings for Recovery, Partially Repaid Under Audit, Issued Against Cuyahoga County Convention Facilities Vendor
For Immediate Release
COLUMBUS – Findings for recovery of $427,291, partially repaid under audit, were issued Thursday against a vendor that received public funds to promote and market the former Global Center for Health and Innovation in Cleveland, Auditor of State Keith Faber announced.
The Auditor of State’s Special Investigations Unit (SIU) determined that BioEnterprise Corp. received $179,833 in reimbursements for expenses that were not related to the operations of or in accordance with its agreement with the Cuyahoga County Convention Facilities Development Corp. (CCCFDC), plus another $247,458 in duplicate reimbursements. The latter included $63,498 from CCCFDC and $183,960 from the Ohio Third Frontier Entrepreneurial Fund.
BioEnterprise received public funding from CCCFDC and the Ohio Third Frontier Entrepreneurial Fund, administered by the Ohio Development Services Agency, to market the Global Center for Health Innovation from October 2017 through December 2019. The Cuyahoga County-owned building was originally designated to serve as a showroom for medical companies to display their products. The facility closed for that purpose in 2020 and is being renovated to become part of the Huntington Convention Center of Cleveland.
SIU launched a criminal investigation in September 2019 after receiving information from CCCFDC Executive Director George Hillow concerning suspected improper reimbursements and duplicate billing by BioEnterprise. SIU ultimately issued findings for recovery for $427,291 against BioEnterprise for funds that were misappropriated, due to a lack of detailed review prior to issuing payment.
In June 2022, BioEnterprise entered a settlement agreement to repay $197,196 to the Ohio Third Frontier Entrepreneurial Fund. In September 2021, BioEnterprise agreed to repay $127,000 to CCCFDC, leaving a remaining finding for recovery balance owed of $116,331.
In addition to the findings for recovery, SIU issued two management recommendations, including improved governing board oversight and adoption of a comprehensive proper public purpose policy to ensure expenditures are lawful. (As part of its findings for recovery, SIU determined BioEnterprise was reimbursed for food and alcohol purchases and other miscellaneous travel expenses that were not related to the medical industry or for expenses that did not include documentation verifying they were for a proper public purpose.)
A special audit report details SIU’s investigation into BioEnterprise and is available online (ohioauditor.gov/auditsearch/search.aspx).
Since 2019, the Special Investigations Unit has assisted in 115 convictions resulting in more than $8.2 million in restitution (see?Map of SIU Convictions?since January 2019). The team receives hundreds of tips of suspected fraud annually. Tips can be submitted anonymously online or via SIU’s fraud hotline at 866-FRAUD-OH (866-372-8364).
The Auditor of State’s office, one of five independently elected statewide offices in Ohio is responsible for auditing more than 5,900 state and local government agencies. Under the direction of Auditor Keith Faber, the office also provides financial services to local governments, investigates and prevents fraud in public agencies, and promotes transparency in government.
Contact: Marc Kovac