JACKSONVILLE, Fla. — Bringing an end to a saga that has plagued the city of Jacksonville since 2019, ex-JEA CEO Aaron Zahn was sentenced to four years in federal prison Tuesday afternoon at the end of a three-hour hearing. Upon release, he will serve a year of probation.
The judge also sentenced Zahn to participate in a substance abuse program and a mental health program when on probation.
Federal Judge Brian Davis, who has overseen the entirety of Zahn's case, addressed Zahn before delivering the sentence.
He said he had never seen so many letters submitted to the court vouching for someone's character.
He thanked the "scores" of people who wrote to the court: "Friends and family, friends of friends, friends of family... old girlfriends, church members, a person whose life (Zahn) saved."
He said, however, that only one letter mentioned something he sees all the time: "Good people can, and do, make bad decisions."
Davis told Zahn he gets a litany of letters in every case that tell stories vouching for a person's good character -- but those people still "made a horrible decision, like you." None of these people consider the consequences on their family, he said.
"The last thing I will share about my observations about humanity that has application to your circumstances is this: Human beings are capable of deception," Davis said, going on to say, "The combination of deceit and greed can blind good people to the error of their ways."
If Zahn succeeded, he said, the citizens of Jacksonville would have lost their "most valuable asset" while Zahn profited.
Davis spoke of Zahn's responsibilities as a public official. "Deviations from that trust are intolerable," he said.
What was the scheme?
Zahn was found guilty at the conclusion of a month-long trial, which began in February and ended in March. The jury agreed that Zahn had in fact conspired to embezzle federal property in 2019 when he created a bonus scheme that would disproportionately benefit JEA's top-ranking employees -- namely, himself. The plan relied on JEA being privatized and sold, meaning Jacksonville's residents would lose out on public ownership of the utility. Prosecutors say that had the plan been approved, Zahn could have made over $40 million.
Ex-JEA CFO Ryan Wannemacher was also accused in the case, but found not guilty.
Prosecution asks for five years
Federal Prosecutor Tysen Duva told Davis that when people call this scheme "unthinkable" or label it the "largest fraud case in Jacksonville's history," they are correct.
If the court agreed with that, he said, they could not grant Zahn probation or a lenient sentence.
The sentence needs to reflect the seriousness of the sentence imposed, Duva said. A sentence of probation, or even a months-long sentence, would send the wrong message, he said. "It would say that Aaron Zahn and others like him could engage in a conspiracy like he did."
He asked Davis to impose a prison sentence of five years. "We feel like that's just, fair and reasonable." He also asked for Zahn to pay a fine of $100,000 for each count -- $200,000 total -- falling below the maximum fine of $250,000 per count.
Duva also notably mentioned that while Zahn's representation and character witnesses spoke of the media villainizing him, he credits the news media for uncovering the case. In particular, he mentioned the investigation by the Florida Times-Union which originally exposed the scheme.
JEA attorney says the utility lost $76 million
Lee Wedekind, the attorney who represents JEA, delivered a victim-impact statement to explain how the debacle has effected JEA's finances and employees.
Throughout the trial, Zahn's attorneys have harped on the definition of "loss," saying that Zahn did not actually steal any money and therefore this is all theoretical. "I'm here today to refute that argument," he said.
Wedekind said that the damage the failed sale of JEA caused to JEA's credit rating led to losses of $63 million and lost an addition to $13 million to costs involved in the failed sale.
"This case is not about Mr. Zahn's role as a son, husband or father," he said. However, if the court was inclined to consider these things, he asked that they consider the families of the senior leadership team who were fired amongst the scandal. He also asked that the court consider the 574 employees who Zahn threatened to fire if the board did not agree to sell the utility, and their families. He said employees ask about a potential sale and potentially losing their jobs even now, five years later.
He also spoke of potential billions of dollars in costs if JEA had been sold and rates in the city were hiked.
JEA Statement
Below is JEA's statement following Zahn's sentencing:
Today’s sentencing closes a painful chapter for our employees and the community we serve. We are thankful for the members of law enforcement, the U.S. Attorney’s office, and the criminal justice system for all of their hard work.
The actions of a former executive do not reflect the core values of our 2,200-plus dedicated employees, who remain focused on improving lives and building community with the goal of being the best utility in the nation. JEA is proud to remain Jacksonville’s municipally-owned utility.
Zahn's attorney revisit trial arguments
The courtroom heard from Zahn's attorneys for a final time, as well as several character witnesses.
The afternoon began with one of Zahn’s attorneys, Eddie Suarez, reiterating identical arguments that he made during the trial, despite Zahn’s motion for acquittal being denied. He went through an abridged version of his closing argument from Zahn's four-week trial, revisiting the big points: There were "circuit breakers" in place that would have stopped Zahn from ever passing the bonus plan; Zahn didn't come up with the idea that JEA was in peril, which he used to convince the JEA board to sell the utility; an accountant who testified as an expert witness for Zahn (who was not involved in JEA's business and was paid $187,000) said Zahn wouldn't have made that much money.
Both Suarez and Zahn's other attorney, Brian Albritton, argued the charges were disproportionate to the crime, saying again that the government couldn't prove exactly how much money Zahn conspired to gain.
Duva argued the jury had already made a decision and the purpose of a sentencing is not to revisit the arguments from the trial.
'Grant mercy': Zahn's wife, others testify
Zahn's mother, wife, father-in-law and several friends addressed Judge Brian Davis. Davis said he had received several letters from other character witnesses as well.
Zahn's wife, Branan, spoke about how she watched her husband experience what "no human could endure and remain unscathed by."
She asked for the "suffering" that Zahn has already been through to be considered as part of his sentence and asked the court to "grant mercy" on Zahn and consider the impact a prison sentence would have on her and their three young children.
Zahn's mother also spoke to the court, telling stories about Zahn's care for his siblings, wife and children. She spoke briefly on Zahn's perseverance and hard work throughout his life, highlighting stories that largely discussed in a memorandum Zahn's team submitted to the court last week recalling his life story.
"His greatest fear in life has been realized, which is to be able to protect and provide for his family," she said.
Zahn's father-in-law, who is an attorney, testified that he is an "ideal" husband and father. He said his views of Zahn did not change after the jury's verdict. He said he trusts Aaron and “If I was ever to require the services of a money manager, Aaron would be my first choice.”
Friends told anecdotes about Zahn, one telling the court about a time when Zahn sent his children donuts and another saying if she called him for a cup of sugar he would bring it over himself.