A federal jury Friday found all five former utility cooperative defendants not guilty on a charge of conspiracy but said three of them were guilty on a charge of theft from a program that received federal funds in connection with lavish trips to the Kentucky Derby and a West Virginia golf resort.

Former Connecticut Municipal Electric Energy Cooperative CEO Drew Rankin, former Norwich Public Utilities General Manager John Bilda and former Norwich utilities commission and CMEEC board Chairman James Sullivan were found guilty on one count of theft from a program receiving federal funds for the 2015 trips to the Derby and The Greenbrier golf resort.

The three were found not guilty on the one count of conspiracy to defraud the United States and one count of theft in connection with the 2014 Derby trip.

Rankin, Sullivan and Bilda face a maximum sentence of 10 years on the theft conviction. "The judge also could order restitution and levy fines," said Thomas Carson, a spokesman for the U.S. Attorney's Office. A sentencing date has not yet been set.

Two other defendants, former Groton Utilities commissioner and former CMEEC board member Edward DeMuzzio and former CMEEC CFO Edward Pryor were acquitted on all charges: one count each of conspiracy and two counts each of theft.

According to Carson, the jury in U.S. District Court in New Haven reached its verdicts shortly after 3 p.m. Friday.

Attorneys for the defendants could not be reached for comment on possible appeals.

The 12-member jury and three alternates deliberated for 2½ days since attorneys finished their closing arguments early Wednesday afternoon in the trial that took just over a month, including a seven-day delay due to one attorney’s COVID-19 infection.

The charges stemmed from annual trips CMEEC arranged for dozens of top staff, board members, some family members, local political leaders, vendors and others from 2013 to 2016. Four of the defendants faced four theft charges, while Sullivan faced three charges, as he resigned from his CMEEC and Norwich utility commission positions prior to the 2016 Kentucky Derby trip.

Nonprofit CMEEC is owned by its member municipal utilities: Norwich Public Utilities, Groton Utilities, Bozrah Light & Power, Jewett City Department of Public Utilities, South Norwalk Electric and Water and Norwalk Third Taxing District. The money used for the trips came from a CMEEC margin fund intended to be returned to the member utility ratepayers for electric rate stabilization.

Throughout the trial, prosecutors stressed that the costly trips included private chartered jets, limousines, a $10,000 dinner with a dozen $200 bottles of wine, event tickets costing hundreds of dollars each, private tours and luxury gifts. Dozens of invited guests included family members, friends, CMEEC business vendors and political leaders.

Defense attorneys argued the trips were valid corporate retreats, and that CMEEC was authorized to act as a private corporation through the state statute that created the cooperative.

Rankin and Sullivan face a separate indictment alleging that Sullivan had received reimbursement through CMEEC for nearly $100,000 in personal expenses from 2012 through 2015, including travel from Washington, D.C., to Connecticut and travel to destinations outside Connecticut. Each face two counts of conspiracy and four counts of theft from a program receiving federal funds.

The trial in that case was postponed until after the conclusion of this one. No schedule for the second case has been set.

Starting with the FBI investigation and running through the criminal proceedings, CMEEC has borne the legal costs for all five defendants, totaling several million dollars by the start of the trial, with about a dozen attorneys involved in the defense of the five men.

CMEEC is engaged in a separate federal civil suit against its indemnification insurance company, National Union Fire Insurance Co. of Pittsburgh, challenging its denial of coverage for the legal defense costs. While CMEEC had hoped to resolve that dispute prior to the criminal trials, attorneys for both parties recently agreed to continue the case until 30 days following the conclusion of this trial.

Norwich Mayor Peter Nystrom said he was shocked and disappointed that the defendants were acquitted on the conspiracy charges. He said it was obvious to “the average citizen” that the CMEEC officials attempted to conceal the trips.

The prosecution had presented evidence that Rankin had asked a staff member to change a reference to “Kentucky Derby trip” in one memo to “strategic retreat,” for example. At one point, Bilda had asked then-Mayor Deberey Hinchey not to mention the trip to Norwich utilities Commissioner Larry Goldman. And the CMEEC board never voted on the trips specifically.

But defense attorneys and Rankin countered during his testimony that he asked that the reference be changed to more clearly denote the function of the trip as a board retreat. Bilda testified that he advised Hinchey not to mention the trip to Goldman, because he was a political rival and critic, not because the trips were secret.

And Rankin and Bilda testified the board did vote on the trips through its deliberations and approval of the “macro budget” that included the board retreat expenses.

Nystrom also said he would discuss with the city’s corporation counsel whether Norwich could seek to revoke Bilda’s city pension in the wake of the conviction.

Bilda resigned as NPU general manager Dec. 31, 2018, nearly two months following the federal indictment, with a severance package that called for him to receive full retirement benefits, which were approved by the city Personnel and Pension Board in July 2019.

c.bessette@theday.com