A Florida developer who pleaded guilty Friday to participating in a kickback scheme at South Carolina State University succumbed to a pervasive culture of corruption at a school where payoffs were “the cost of doing business,” his attorney said.
Lawyer Andy Savage described 44-year-old Richard Zahn as an honest and successful businessman who was unprepared for the level of corruption foisted upon him when he tried to sell land he owns in Orangeburg County to the historically black college in 2011.
Savage said the extent of corruption at the school will become clearer as U.S. Attorney for South Carolina Bill Nettles rolls out his full case on S.C. State. So far, two former S.C. State officials and a Greer businessman have been implicated in the probe, in addition to Zahn.
“It’s a terrible indictment of public employees, public officials and people who hold the public trust,” Savage said. “And it goes way beyond the borders of that campus.”
Nancy Wicker, chief of the U. S. Attorney’s Office criminal division, declined to comment on the possibility of additional indictments after Friday’s hearing.
But in a possible indicator of the breadth of the probe, a plea agreement for Zahn indicates federal prosecutors in Georgia and Florida have also agreed to forgo additional charges against the developer if he continues to cooperate with authorities and meets other conditions.
Wearing a blue suit and a beard, Zahn pleaded guilty to conspiring to defraud the U.S. government, a charge that carries a maximum penalty of five years in prison and a $250,000 fine.
The plea agreement indicates that prosecutors will recommend a sentence of three years’ probation for Zahn if, among other things, he fully cooperates with the government, submits to a polygraph test, agrees to testify in the case, stays out of trouble and contributes to a scholarship fund for S.C. State students.
A judge will sentence Zahn at a later date.
Zahn said little during the hearing beyond answering Chief U.S. District Judge David C. Norton’s questions about his understanding of the plea. When Norton asked if he was satisfied with the representation he had received from his attorneys, Zahn nodded.
“I wish there had been a different result, but they did everything I’ve asked them to do,” he said.
Norton released Zahn on a personal recognizance bond. He left the courthouse and climbed into a waiting black Chevy Suburban without speaking with reporters.
Zahn, head of Longwood, Fla.-based ZMG Construction, is accused of conspiring on the land deal with former S.C. State Police Chief Michael Bartley and the university’s former board chairman, Jonathan Pinson.
Bartley pleaded guilty in the case last month and is said to be cooperating with investigators, while Pinson has pleaded not guilty to all counts of the indictment against him.
Prosecutors have said Zahn was looking to unload a 121-acre spread known as Sportsman’s Retreat that he owns along Wild Hearts Road in the Orangeburg County town of Cameron. It has been on the market for $3.2 million, and the site was pitched to school officials as a possible site for a conference center and a university retreat, authorities said.
Zahn set a price of $2.8 million for the land, and Pinson and Bartley were allegedly tasked with convincing the school to buy the property, according to court documents. In return for his help, Pinson was to get a $110,000 Porsche Cayenne, while Bartley stood to receive a new all-terrain vehicle and $30,000 in cash, authorities said.
Prosecutors have described Bartley as a friend of Zahn and Pinson as a business associate of the developer. Pinson and Zahn were said to be involved in unspecified business ventures in Columbia and Atlanta that also included Greer businessman Eric Robinson, who has been indicted with Pinson in another alleged kickback scheme.
Savage said Zahn entered into the Orangeburg County land deal with the intent of helping the university, only to be pressured into forking over kickbacks in return.
“If you wanted to do business there, it was expected because it was the culture of the community there,” Savage said. “It was pervasive there that there would be some type of remuneration if the deal went through — any deal.”
Federal investigators uncovered the scheme through a wiretap on Pinson’s cell phone, Wicker said. They intercepted some 20 phone calls that implicated the three men, she said.
In October 2011, S.C. State board members gave conditional approval to the land purchase, Wicker said. But Zahn withdrew from the agreement after he was approached by the FBI, she said.
Savage said Zahn regrets his participation in the episode and has fully cooperated with investigators from the outset in an effort to make things right.
Reach Glenn Smith at 937-5556 or Twitter.com/glennsmith5.