James Ortman
James Ortman, 58, of Maple Rapids has been sentenced to two years in prison. Ortman pleaded guilty early this year in federal court to defrauding the U.S. Department of Housing and Urban Development regarding a facade project in downtown St. Johns. He also admitted defrauding the government on another grant for an apartment complex in St. Johns that was never completed.
Ortman had admitted at his change of plea hearing before United States Magistrate Judge Ellen S. Carmody that in 2008 the City of St. Johns awarded him a federal grant as part of a Downtown Façade Project for his building located at the corner of North Clinton and East Walker streets. In order to receive the grant, Ortman represented to the City that the façade improvements would cost $416,999 and that the project would ultimately create four permanent jobs for low and moderate-income persons.
The grant provided that if the project truly cost that amount, and if Ortman invested $216,999 of his own funds into the project, HUD would fund the remaining cost of $200,000. Ortman admitted at the hearing that he did not invest his own funds as represented and that he submitted false documents to the federal government to make it appear as if his actual costs equaled the projected amount. As a result, he received the full amount of the grant ($200,000), when he should have received less than half of this amount.
Ortman further admitted that he committed fraud in conjunction with a Rental Rehabilitation Grant that the city awarded to him in 2009. The terms of that grant required Ortman to construct apartments for income-qualified individuals in various buildings that he owned in St. Johns.
Ortman admitted that he submitted claims for grant payments to the federal government for work that he did not actually complete and that he diverted those grant payments to other business ventures that were in financial trouble. As a result, many of the income-based apartments were never completed.
Ortman caused a combined loss of over $200,000 to the federal government in conjunction with the façade and rental rehabilitation grants. As part of his sentence, he also has been ordered to pay $235,000 in restitution.