Evergreen Reporter

Jacksonville, Florida – U.S. District Judge Brian J. Davis has sentenced Aaron Zahn, 44, formerly of Jacksonville Beach, to four years in federal prison for conspiracy to steal and embezzle City of Jacksonville municipal funds and for wire fraud. Zahn was found guilty after a four-week jury trial on March 14, 2024.

According to court documents and evidence admitted at trial, Zahn became the interim CEO of the Jacksonville Electric Authority (JEA) in April 2018 and then the permanent CEO in November 2018. During his tenure as CEO, Zahn led a process to convince the JEA Board of Directors that if JEA did not privatize or recapitalize, the historically successful municipal utility faced significant challenges that it would not overcome over the ensuing decade. He argued that considering privatization through a statutorily required process known as an Invitation To Negotiate (ITN) was the only viable path forward.

During this process in the summer of 2019, Zahn developed a bonus plan known as the Performance Unit Plan (PUP). The PUP appeared to pay reasonable bonuses to unit holders if JEA hit certain performance metrics. However, it had hidden aspects designed to pay Zahn and other JEA executives lavish bonuses based on a calculation tied to a sale of the municipal utility.

Trial evidence showed that the 100,000 PUP units were designed to increase in value from $10 to upwards of $11,500, creating a potential bonus pool of $315 million funded from the sale or privatization of JEA. Zahn expected to personally benefit by approximately $40 million if JEA was sold and anticipated other high-level JEA executives would make around $10 million each. The PUP was essentially a fabricated stock tied to a public entity with no concept of equity.

On November 18, 2019, after examining the PUP and questioning Zahn and others extensively, the City of Jacksonville Council Auditor issued a memorandum exposing its true nature based on potential net proceeds from selling JEA amounting between $3 billion and $5 billion. Following this revelation by the Council Auditor about plans to steal and embezzle funds from selling JEA, the ITN process was canceled and Zahn was terminated from his CEO position.

“Fraud and corruption pose a fundamental threat to our national security and our way of life,” said Special Agent in Charge Kristin Rehler of the FBI Jacksonville Field Office. “The FBI will not tolerate those who seek to deceive American citizens. As taxpayers, you are entitled to decisions based on public interest; we take very seriously our responsibility to investigate and aggressively pursue individuals who attempt to defraud publicly funded institutions.”

This case was investigated by the Federal Bureau of Investigation along with investigators from the State Attorney’s Office for the Fourth Judicial Circuit assigned to the FBI. It is being prosecuted by Assistant United States Attorneys A. Tysen Duva and Chip Corsmeier.