JACKSONVILLE, Fla. — Calling him “the principal architect and ringleader of perhaps the largest fraud in Jacksonville history,” JEA sued ousted CEO Aaron Zahn for fraud.
The lawsuit seeks damages and injunctive relief from the utility’s former head, saying he willfully and recklessly positioned the utility for sale, “despite being ordered not to do so,” and lied about its financial condition.
“Mr. Zahn made numerous false and misleading statements to JEA’s board of directors about JEA’s financial performance and outlook, altered documents, provided false testimony under oath, failed to disclose conflicts of interest, and misused his public position,” the filing says.
"Because of his actions, Zahn’s 14-month tenure as JEA’s CEO was marred in a public scandal that has been described as ‘maybe the biggest attempt to swindle the people of Jacksonville based on the biggest lie ever told in our city’s history [a characterization made by City Councilman Rory Diamond].'"
The filing continues, “Zahn’s fraudulent scheme has left in its wake criminal and legislative investigations; credit downgrades by bond rating agencies; massive bills from law firms, lobbying groups, and investment bankers; and a damaged reputation from a breach of the public’s trust.”
In a statement to First Coast News, JEA said, “Mr. Zahn’s claim that he is entitled to nearly $1 million from JEA is disappointing given the damage he has caused to JEA and the Jacksonville community. JEA’s decision to terminate Mr. Zahn for cause was the right one, and JEA is fully committed to defending that decision in a transparent court proceeding. JEA remains focused on what it does best: providing great service for our customers.”
The board fired Zahn with cause in January following an investigation by the city’s Office of General Counsel, however, he is challenging their effort to strip him of severance pay, saying he is being scapegoated. Following his departure, the entire JEA board resigned or left. The failed sale is currently the subject of a federal grand jury investigation and a City Council probe.
First Coast News reached out to Mayor Lenny Curry, a friend and ally of Zahn, for comment. Spokesperson Nikki Kimbleton said he would not comment on “pending litigation.”
Stay with First Coast News as this story develops.