Toxic Power Part 4: Family Business
By Gordon Hopkins
It has not gone unnoticed that the four men associated with IES (Industrial Engineering Solutions LLC) all have the same last name, although that was not always evident as two of those men used false names when dealing with the City of Fairbury.
It should be noted that FJN has not confirmed the relationship between the four men to each other but has connected two of them, along with IES, to other power plants.
The purpose of the deal with IES was to save the city the expense of removing several tons of outdated generators, turbines and other equipment from the now-defunct Fairbury Municipal Power Plant.
In 2002, City Administrator Jacob Matthews recommended putting the equipment up for sale. But that was proving to be more difficult than expected. No one showed any interest in buying the obsolete machines. The only businesses to contact the city about the machines expected to be paid to remove them. That was exactly what the city was trying to avoid.
Then, on July 6, 2022, the City of Fairbury received a phone call from a man calling himself James Daniels, offering just the solution everyone was looking for.
WHO IS JAMES MITLO?
James Daniels purported himself to be the owner of IES, a salvage company that specialized in handling scrap from power plants. Not only would IES remove the machines, they would pay $120,000 and even throw in demolition of a nearby used oil storage tank for free.
It was exactly what the city was looking for and, on October 13, 2022, the contract was signed.
James Daniels arrived in October of 2022. Upon arrival, he began recruiting locals to work in the power plant as subcontractors. Daniels represented to them that IES had a large company with enough staff to do the heavy work of moving the machines. However, as he explained to the locals he recruited, his crew would not be arriving on time. Daniels told a story about how the entire crew had been working on another job in New Mexico and got arrested during a barroom brawl.
That left Daniels in a desperate situation, or so he said. He hired locals to do the work, at least until his crew was sprung from the New Mexico jail where they were being held, and agreed to pay them in cash, under the table.
FJN spoke to some of those local subcontractors. They described James Daniels as the money man. It was he who paid the workers. All business was handled on a cash-only basis.
Although he was using the name James Daniels, some of those local subcontractors noticed the name Nicholas Siganoff on his cell phone. The locals provided FJN with a photograph of James Daniels. Then-Fairbury Mayor Spencer Brown met Daniels when he came to the city. Brown confirmed the photograph is of Daniels.
Arizona Public Services Lawsuit
Arizona Public Service (APS) is an electric utility that serves central Arizona and operates several power plants in the state.
In 2020, APS put up scrap materials for bid from some of its power plants, including the APS Cholla Plant in Joseph City, and the West Phoenix Power Plant in Phoenix.
According to David Goana, attorney for APS, a man calling himself Nicholas Siganoff visited those facilities to see what scrap was available for purchase. This was prior to submitting a bid for the scrap on behalf of IES, the company Siganoff said he owned.
On December 16, 2020, APS and IES entered into a Material Sales Agreement, confirming IES was purchasing the scrap for $59,800.
IES paid APS a down-payment of $13,500. All the scrap was removed but, four years later, the balance remains unpaid.
In 2021, APS sued IES for breach of contract. Defendants were IES, along with Nicholas Siganoff and an unnamed third party, Jane Doe Siganoff.
In his court filings, Goana wrote, “As part of the removal of scrap materials from APS facilities, IES agreed to pay APS for labor and equipment charges associated with the removal of the scrap materials from APS property onto IES trucks. In that regard, APS hired a third party contractor, Allied Power, to assist IRS in removal of the scrap materials, and, APS paid Allied Power $7,170.51 for labor and equipment charges associated with removal of the scrap materials from APS facilities for the benefit of IES.”
On January 19, 2022, APS was awarded a judgment for $109,480.68. That judgment has never been paid.
FJN provided the photograph of James Daniels to Gaona, who in turn showed it to staff at APS. Gaona confirmed that the photograph was of the man they knew as Nicholas Siganoff.
FJN spoke to Gaona on February 13, 2024. He confirmed circumstances of their lawsuit were similar to that of Fairbury.
“He represented himself as Siganoff, Nicholas Siganoff. And he signed an agreement with APS as it relates to purchasing old equipment that we salvaged. Salvage stuff that we were trying to get rid of,” said Gaona. “And didn’t pay the full amount they were supposed to pay APS.”
When asked if APS ever pursued any criminal charges, Gaona said no. “I’m not sure there was anything criminal. He signed a contract, didn’t pay what was due under the contract.”
Instagram
Instagram is a social networking app that allows people to share photos and videos. FJN found an Instagram account with several photos of James Daniells/Nicholas Siganoff. The name on the account is James Mitlo.
One of those photos show him in a vehicle with another man from IES, Jimmy. The caption reads, “Me and pops.”
WHO IS JIMMY MITLO?
The locals hired by IES knew him only as “Jimmy,” the man in charge of the operation.
Then-Fairbury Mayor Spencer Brown knew him as “Jimmy Daniels,” one of the owners and operators of IES.
The now-shuttered website for IES listed him as “Jimmy James, General Manager.”
FJN learned that his real name is Jimmy Mitlo, and he has a criminal record in multiple states that dates back more than two decades, including a two-year stint in federal prison for tax fraud.
How “Jimmy” was Identified
The city made multiple attempts to reach IES, before and after filing a lawsuit, but has not received a response. Then-City Council president Kelly Davis asked FJN, “How can you serve papers on a ghost? If you can’t find him, how do you do it?”
According to the local subcontractors, some of them would travel with Mitlo to a metal recycling business in Lincoln, where Mitlo would sell scrap from the power plant. They saw the name, Jimmy Mitlo, on receipts.
“Jim Mitlo would take checks,” the contractors told FJN through their attorney, “and cash them at a local bank in Lincoln (several of us went with him) and run the operation on a cash basis.”
FJN made multiple requests for a copy of Mitlo’s mugshot from his 2011 conviction. The Federal Bureau of Prisons denied those requests, insisting the mugshot is not public record. Jefferson County Sheriff Nick Georgi also asked for the mugshot. That request was refused, as there was not an active criminal investigation at the time.
The contractors took a photo of Mitlo. FJN sent the photo to Frank Calta, CEO of Vi-Cal Metals, a metal recycling business based in California. In 2011, shortly before he was sent to prison, Vi-Cal Metals attempted to sue Jimmy Mitlo and Mercer Machine Works, Inc., one of Mitlo’s companies identified in the tax case court documents, for breach of contract. Vi-Cal Metals had agreed to finance the decommissioning of the Highgrove Generating Station in Riverside, California.
Calta told FJN, “Yes that’s him!”
The history of Jimmy Mitlo and the law includes convictions in South Carolina and Texas.
South Carolina
On February 23, 1998, Jimmy Mitlo was convicted in U.S. District Court for the District of South Carolina of filing a false 1990 U.S. Individual Income Tax Return. The defendant agreed to a civil settlement of his income tax liabilities for years 1989, 1990 and 1991, and signed a decision document on October 6, 2000.
Despite the conviction, it would be several years before this matter was settled.
Texas
On November 19, 2010, Mitlo pleaded guilty before United States District Judge Melinda Harmon in U.S. District Court for the Southern District Court of Texas to one count of willfully conspiring to impede and to impair the IRS (Internal Revenue Service) in its collection of nearly $350,000 in income tax liabilities he owed from 1989, 1990 and 1991. The total amount of taxes, penalties and accruing interest still owed for those years amounted to approximately $349,939.09.
“Defendant Jimmy Mitlo at all relevant times to the conspiracy was self-employed as a repairman of heavy machinery and as a re-seller of scrap metal. Defendant Jimmy Mitlo operated his business under several names, including Power Industrial Machine, Inc., Power Machine Industries, Inc., and Mercer Machine Works, Inc.,” according to court documents.
“During years 2004, 2005, 2006, 2007, and 2008, defendant Jimmy Mitlo earned in gross income a substantial amount of money. He did not use those earnings to pay his outstanding income tax liabilities for 1989, 1990, and 1991. He did not file a timely U.S. Individual Income Tax Return for years 2001, 2002, 2003, 2004, 2005, 2006, 2007, or 2008.”
Operating with Cash
Prosecutors in the 2010 case accused Mitlo of operating in cash. As noted in the court documents, “in order to conceal his income and assets from the Internal Revenue Service. Defendant used check-cashing businesses to cash the vast majority of the checks he received for his services, and defendant and one of his co-conspirators often used cash and money orders to pay defendant’s creditors.”
Using Banks to Avoid Detection
While he often used cash, Mitlo and an unnamed, un-indicted co-conspirator also used multiple bank accounts. Court documents note, “When it was convenient for defendant Jimmy Mitlo and the co-conspirator in question to use conventional banking, defendant Jimmy Mitlo and the co-conspirator established nominee bank accounts in the names of defendant Jimmy Mitlo’s sons and businesses. Defendant Jimmy Mitlo and the co-conspirator used these nominee bank accounts to pay defendant’s ordinary personal expenses, including mortgage payments, credit card and utility bills, childcare expenses, home improvements, and medical and veterinary bills. Defendant Jimmy Mitlo deposited into these nominee bank accounts several checks he received in payment for his services. Defendant Jimmy Mitlo and the co-conspirator also deposited into these nominee bank accounts large amounts of cash.”
Prosecutors noted individual deposits were usually less than $10,000. Banks are required to report cash transactions greater that $10,000 to the U.S. Department of the Treasury.
Purchases
According to the prosecutor, Mitlo made a number of purchases during this period, often in cash. On November 8, 2007, Jimmy Mitlo paid $24,500 in cash to purchase silver bars.
In 2005, Jimmy Mitlo and his co-conspirator purchased a home in Richmond, Texas, in which they lived as their principal residence, but had the house placed in the name of one of Mitlo’s sons. The prosecutors acknowledged, “While there were legitimate non-tax reasons for placing the house in the name of defendant’s son, defendant knew and understood that this arrangement also had the effect of concealing assets from the IRS.”
On May 6, 2005, Mitlo made an $84,000 payment to the title company to cover closing costs.
On May 26, 2006, through the son in whose name the house was titled, Mitlo applied for a $522,000 home equity loan. According to court documents, “The loan falsely claimed (i) that the son worked for Power Industrial Machine, Inc., and (ii) that the son earned a salary of $13,167 per month.”
Mitlo paid $7,000 of those funds in cash as the downpayment on the lease of a 2007 Mercedes Benz GL450 sport-utility vehicle.
The Mercedes was not the only car Mitlo and his co-conspirator obtained. From 2000 to 2008, they purchased or leased at least 13 vehicles, including two Cadillacs, two trucks, a Silverado, a Toyota Sienna, A Toyota Tacoma, a Toyota Sequoia and several Saturns. Most of these vehicles were titled in the names of one of Mitlo’s businesses or other co-conspirators.
Plea Agreement
Jimmy Mitlo pleaded guilty and was sentenced to 24 months in federal prison without parole on July 1, 2011. The court included in its order of restitution income taxes Jimmy Mitlo owed for years 2004 through 2008 of $205,781.27, along with the unpaid $349,939.09, from the 1998 conviction, making the total restitution ordered $555,720.36
Mitlo was released from prison on June 17, 2013, and placed on post-release supervision until the debt was repaid.
EPA Investigation
In November of 2023, Jacob Nicholls, Special Agent with the EPA (Environmental Protection Agency) Criminal Division, advised FJN that an investigation has been opened into the what happened at the Fairbury Municipal Power Plant.
Car Accident in California
On March 6, 2024, then-Mayor Brown received an email from a man named Rod Gordon about Jimmy Mitlo, “He backed into my vehicle in Barstow, CA and because of insurance purposes I have a photo of his driver’s license and the vehicle he was driving. I also have a photo of another vehicle that was with him.”
Brown responded to the email, “Rod, I would very much appreciate anything you have regarding Jimmy Mitlo.”
According to Gordon, Mitlo had been driving a rented Chevy Suburban from Avis Car Rental. A pickup truck was driven by another man, who Gordon believed was with Mitlo.
Photos sent to Brown by Gordon were of Mitlo’s driver’s license, license plates for both vehicles, an insurance card and the man who was driving the pickup truck at the time of the accident.
FJN asked Brown if he forwarded this information or the photos to the EPA or other law enforcement, Brown indicated he had informed only the city’s attorneys.
On May 21, 2024, Brown told FJN via email, “I have not heard anything from the EPA regarding IES for months. (T)he last conversation I had (on the phone) was that they told me they would not comment, work with my attorneys or update me on anything they had going on.”
On May 22, FJN asked why Brown did not send this information to the EPA. Brown responded, “The EPA already had much more information than what we had. Like I said before, the EPA was not interested in partnering, sharing information or updating us. Furthermore, none of the information from this email was of significant use, the drivers license being the most critical piece, did not even have a valid address.”
Mitlo’s California driver’s license listed an address in Riverside, California. A reverse address search shows the address is for a business called Post Box & More.
The investigator for the EPA confirmed to FJN he had not been sent any of this information.
FJN spoke to Gordon on October 29, 2024. Gordon said, “the vehicle that he was driving, that he backed into our vehicle with, was a rental vehicle.”
Although Mitlo provided Gordon with an insurance card, the expiration date on the card was December 1, 2023, before the accident took place. Gordon said, “We ended up having to file it through our own insurance company.”
There was a second man with Mitlo but Gordon did not know his identify.
“We didn’t bother to get his information because he wasn’t the one driving,” said Gordon. “The other gentleman actually became quite belligerent with us. He did not want us taking pictures of them or license plates or anything else.”
Gordon said he did not report the matter to law enforcement.
Assault Charge in Texas
On May 22, 2024, Jimmy Mitlo was arrested in Galveston County, Texas for assault, a misdemeanor. According to the complaint, filed on July 3, 2024, by Jack Roady, Galveston County Criminal District Attorney, “Jimmy James Mitlo, hereinafter styled Defendant, heretofore, on or about the 11th day of April, 2024, in the County of Galveston and State of Texas did then and there intentionally, knowingly, or recklessly cause bodily injury to (the alleged victim) by punching, and or striking on or around the head or neck area.”
A review of court documents show that the home address Jimmy Mitlo provided the Galveston County Court and Gulf Coast Bail Bonds, the bonding agency that paid his bond, did not match. FJN checked with the U.S. Post Office and confirmed neither are valid street addresses.
FJN reached out to the Galveston County prosecutor and asked if there would be any consequences for giving the court a false address. As of press time, no response has been received.
That case remains ongoing.
WHO IS TONY MITLO?
The address on the IES contract with the City of Faibury is in Riverside, California. As previously reported by FJN, a reverse address search show it to be location of a beauty parlor.
In fact, IES was actually registered in Texas on April 22, 2022, just six weeks before the first recorded contact with the City of Fairbury and well before the contents of the power plant were advertised for sale.
The registered agent is Tony Mitlo.
Texas Secretary of State records indicate IES has forfeited the “right to transact business in Texas.”
FJN reached out to the Texas Comptroller’s office. A representative said they could not release any information about why IES’s right to do business was forfeited due to confidentiality rules, except to say that the company was “not meeting their obligations.”
The date of forfeiture is October 20, 2023.
On September 11, 2023, IES created a new website, https://industrialengineeringsolutions.org. Services being advertised include: demolition; removal of hazardous and toxic materials, such as asbestos and mercury; purchasing; removal and scrap.
As of Monday, October 30, 2023, the website is no longer accessible.
One of the photos used on the website’s front page is of the interior of the Fairbury Municipal Power Plant taken by city staff.
Tony Mitlo was listed as a defendant in the lawsuit filed by the City of Fairbury.
On December 9, 2023, a process server attempted to deliver the summons to Tony Mitlo at the address registered in Texas. The process server, Paul Brennan with Lone Star Attorney Service, indicated the family living at the address did not know the defendant, “I was told by the father of the family that they are new to this house and that they are renting it. Since they were new, he did not know whether the recipient was a former renter.”
On January 18, 2024, District Court Judge Julie Smith approved a motion for substitute service.
In some cases, the law requires that certain documents, such as a summons, be served on the other party. The court will allow alternative methods of service if service cannot be made by traditional means.
Summonses were sent by email and text message and were returned on January 22, 2024, confirming receipt.
FJN called the telephone number on the summons and spoke briefly to a man who identified himself as Tony Mitlo. He said he did not wish to discuss the case but did acknowledge receiving the text about the lawsuit.
On July 15, 2024, a hearing was held in Jefferson County District Court via Zoom. Attorney Adam Kost with Rembolt Ludtke LLP appeared on behalf of the city. No one appeared on behalf of IES.
Julie D. Smith, the presiding judge, granted the motion for default judgment, “The court finds that the allegations in the complaint are deemed to be true. Default Judgment is awarded in favor of the plaintiff and against the defendant.”
The City of Faibury was awarded $144,000.
FJN attempted to call Tony Mitlo again on July 19, 2024, to ask about the judgment. This time, the person who answered did not identify himself but said, “Now this is something that I need to get with Tony and we need to discuss this. The whole big mix up.”
When asked about Jimmy Mitlo, he said, “That’s someone who owes the company a lot of money and I need to get with him.”
At that point, the phone call was disconnected.
When asked why Jimmy Mitlo’s name does not appear on any of the documents, City Attorney Kurth Brashear advised, “IES, which is a legal entity, was the party to the contract with the City and, accordingly, was the party that the City had its cause of action against. No person, including the individual you name, signed a contract with the City in their individual capacity, which would be the basis for including an individual as a defendant in the litigation.”
The signature on the signed contract is James Daniels. That name appears in court documents but not as a defendant.
Brashear added, “If IES had entered an appearance, we may have uncovered facts during the discovery phase that would have supported adding one or more individuals as a defendant. As you know, it did not appear so no discovery occurred and the City has now obtained a judgment in its favor.”
While the subcontractors worked mostly with Jimmy and James, they told FJN that there was a third man was present while they were working in the power plant. They knew him only as Tony. FJN has been unable to confirm that this is the same man as IES’s registered agent.
WHO IS JOEY MITLO?
The fourth man associated with IES is Joey Mitlo. That is the name of the remitter on the cashier’s check for $12,000, which was the down-payment for the machines in the power plant.
FJN located a phone number for Joey Mitlo and called him on December 20, 2024. FJN asked the man who answered if it was he who had sent the cashier’s check to the City of Faibury. He said, “Yeah,” but the phone call was disconnected immediately after. Further attempts to reach Joey Mitlo have been unsuccessful.
