City releases statement regarding federal investigation at Cleveland City Hall

CLEVELAND, Ohio -- The city of Cleveland has released a statement regarding an investigation at city hall.

It says:

“It is an ongoing investigation by federal agencies. While we do not discuss ongoing investigations we will fully cooperate.”

Investigators from several federal agencies were "present" in Cleveland City Hall after business hours Wednesday for "authorized law enforcement activity," an IRS spokesperson told Fox 8.

Craig Casserly, who works in the Criminal Investigation Division of the Internal Revenue Service, confirmed that investigators from the IRS, Federal Bureau of Investigation, and U.S. Department of Housing and Urban Development were at city hall, which is located on Lakeside Avenue.

Casserly would not elaborate on the reason for the investigation. In a text to FOX 8, he said "additional information cannot be provided at this time as this matter is under seal by federal court."

The FOX 8 I-Team has learned that investigators were inside city hall for several hours Wednesday night.

Sources told FOX 8 News the investigation appears to be focused on the Department of Community Development and the Mayor's Office of Capital Projects.

The Department of Community Development oversees millions of dollars in federal HUD funds. When asked whether the office had been searched or any documents removed, Director Michael Cosgrove referred a reporter to a city spokesman.

The Office of Capital Projects handles, among other things, the acquisition of non-residential real estate.

Cleveland Director of Media Relations Dan Williams did not confirm which offices were searched.

"This is obviously a very significant case," said Chris Georgalis, who spent seven years as a federal prosecutor with the U.S. Attorney's Office before going into private practice two months ago. His responsibilities included public corruption cases.

Though the case is under federal seal, he said HUD's involvement is telling, and this appears to be a corruption investigation.

"You would look at the departments involving any type of housing, any type of building, housing or building inspection, any type of real estate," he said.

Georgalis said the agents at city hall likely seized financial documents amid an investigation that's been going on for several months and may involve a federal grand jury.

"They're looking for financial records, they're looking for any indication of any type of federal programs, documents related to those federal programs," he said.