Jeff Montgomery

The News Journal

A federal grand jury has indicted a developer for illegally building an entrance road and running water, electric and gas lines through wetlands at the long-troubled Riverbend residential community off Del. 9 just south of New Castle's Dobbinsville neighborhood.

Alleged criminal offenses by Joseph L. Capano Sr., 73, of Middletown, include lying to Army Corps of Engineers officials about the fact and timing of the water line work, and submitting an affidavit falsely claiming the water line went in before a federal cease and desist order in March of 2009.

Capano faces up to five years in prison for each of three counts of making false statements and three years in jail for the Clean Water offense, along with a fine of up to $250,000 for each count. The development company, Riverbend Community LLC, could be fined up to $500,000.

Acting U.S. Attorney David C. Weiss on Tuesday said the indictment alleged Capano and Riverbend told workers to build and expand an entrance causeway off Del. 9 in federally protected wetlands. The developer also directed placement of a water main through a large marsh and wetland area along the edge of the still mostly-vacant development, work that destroyed or damaged protected areas or increase runoff into the adjacent marsh.

"It was an object of the conspiracy to violate the Clean Water Act and to conceal that violation" from government agencies, the indictment said.

The water main work, said by federal investigators to have been given to a contractor working informally after another builder refused to take the risk, continued despite a directive from the Army Corps of Engineers to stop work.

"Defendant Capano, on behalf of defendant Riverbend LLC, instructed employees or contractors to conduct various earthmoving, construction and excavation activities in wetlands subject to federal jurisdiction during evening hours, on weekends and 'off the clock" to avoid detection by various state, local and federal inspectors," the indictment said.

Prosecutors said Capano made "multiple false statements" about the timing of the water main installation, and withheld information from the Corps.

Delaware's Department of Natural Resources and Environmental control issued a cease-and-desist order against the development in October 2011, citing both wetland and stormwater management offenses. At the time the project was caught up in bankruptcy and foreclosure claims.

Maryland-based Cecil Bank won a foreclosure judgment against Riverbend the same year, listing debt claims of about $11.8 million against the company and property.

Only a handful of homes now stand on the development. Walter Cooper, who owns property in the development, said he had no complaints, but had little information about the development's status.

"They've had meetings, but I'm not sure what's going on with the owners," Cooper said. "I assume the banks still own the property."

Contact Jeff Montgomery at (302) 463-3344 or jmontgomery@delawareonline.com