CW Detroit

2 Wayne County Employees Charged With Embezzling $1.7 Million In Road Funds

May 4, 2022 / 2:20 PM EDT / CW50 Detroit

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(CBS DETROIT) -- Two workers with the Wayne County Roads Division are charged with embezzling more than $1.7 million in county funds.

According to the U.S. Attorney's Office, Kevin Gunn, 64, of West Bloomfield, and John L. Gibson, 54, of Detroit, were charged with conspiring to commit and committing federal program theft, wire fraud and money laundering.

Officials say federal program theft has a maximum 10-year prison sentence and a fine of $250,000. Wire fraud carries a maximum 20-year sentence and a $250,000 fine. The money laundering charge has a maximum 20-year sentence and a $500,000 fine.

Gunn managed the Bridge Unit, and Gibson, who had been working for the county for 20 years, was a foreman within the Bridge Unit.

Both men were arrested Tuesday by FBI agents, prosecutor's office investigators and sheriff's deputies.

"The alleged actions of these individuals are nothing short of disgraceful," said Wayne County Sheriff Raphael Washington. "To brazenly steal from hardworking taxpayers and fraudulently line their own pockets while holding positions of public trust make these crimes all the more deplorable. Today's charges are another example of our strong commitment to working together."

According to the complaint, Wayne County receives more than $20 million each year in federal funds to pay for road repair, construction and maintenance.

Officials say Gunn, Gibson and other associates were involved in a scheme to use taxpayer money and make unauthorized purchases of generators and other power equipment from retailers to sell for personal profit. Between January 2019 and August 2021, Gibson allegedly solicited approved county vendors to buy generators and other equipment, which were never provided to or used by the county.

"In order to conceal the scheme to defraud, Gunn instructed the vendors to falsify the invoices they submitted to the Roads Division, and list items the vendors were authorized to sell to the county under their contracts, rather than the generators and power equipment they were unlawfully acquiring at Gunn's request," read a press release from the U.S. Attorney's Office.

"Roads Division employees would then approve and pay each vendor's invoice with taxpayer funds. After these fraudulent purchases were verified and approved by Roads Division employees, Gibson, and Gunn took possession of the equipment which was resold over the internet and social media for personal profit."

An investigation by the Wayne County Sheriff's Office was underway with the assistance of the FBI. A search warrant was issued by the prosecutor's office, leading to uncovering the embezzlement scheme involving Gibson, Gunn, county vendors and other Roads Divison employees.

The investigation revealed that between Jan. 16, 2019, and Aug. 3, 2021, Wayne County vendors purchased 596 generators and a variety of equipment including lawnmowers, chainsaws and backpack blowers, totaling at about $1.7 million in taxpayer funds.

"I take public corruption very seriously which is why when we first learned of the fraudulent activities, my office immediately offered to cooperate and provide any needed assistance to the Wayne County Sheriff's Office, Wayne County Prosecutor's Office, Federal Bureau of Investigation (FBI), and the U.S. Attorney's Office," said County Executive Warren Evans.

"It is unfortunate that a few individuals put their personal gain ahead of the work the county has done over the last 7 years to stabilize our fiscal outlook, continue improvements to our infrastructure and provide services to our residents throughout a global pandemic.

"These individuals have undoubtedly put a stain on the fabric of our system; however, they do not represent the hundreds of hardworking and dedicated Wayne County Employees who come to work every day to serve our residents with respect and integrity. I will continue to pursue every avenue to fully prosecute these employees and vendors."