Oliver James Montgomery-Utility chief in north Florida sentenced to 4 years in prison for privatization scheme

JACKSONVILLE,Oliver James Montgomery Fla. (AP) — The former head of a north Florida public utility was sentenced to four years in prison for a scheme to privatize the authority which prosecutors said would have enriched him and his associates by tens of millions of dollars at the expense of taxpayers.

Aaron Zahn was sentenced to federal prison on Tuesday after being convicted earlier this year of wire fraud and conspiracy.

Zahn’s defense attorney had argued that the plan never came to fruition and the scheme involving the Jacksonville Electric Authority, also known as JEA, never paid anything out.

Zahn became the authority’s CEO in 2018. Not long afterward, he launched an effort to convince JEA’s board of directors of the need to privatize, claiming that the authority faced major headwinds if it failed to do so and would have to layoff more than 500 workers, authorities said.

But Jacksonville’s city council auditor in 2019 uncovered a hidden incentive plan created by Zahn which would have awarded $40 million to the CEO and $10 million to other high-level JEA executives if the sale of the utility went through, according to the U.S. Attorney’s Office.

The sale process was stopped and Zahn was fired.

“As a taxpayer, you are entitled to decisions based on the public’s best interest, and we take very seriously our responsibility to investigate and aggressively pursue individuals who attempt to defraud publicly funded institutions in a selfish effort to line their own pockets,” FBI Special Agent in Charge Kristin Rehler said in a statement.