Michigan men charged for criminal enterprises, defrauding federal program and city of Detroit
LANSING, Mich. (CBS DETROIT) - Two men were charged with multiple felonies for allegedly conducting separate criminal enterprises to defraud the federal Troubled Asset Relief Program (TARP) of funds, Michigan Attorney General Dana Nessel announced.
The men charged are David Jeremy Gillespie, 39, of Detroit, and David Holman, 48, of, Metamora.
The funds were for contractors conducting demolitions for areas hit by the financial crisis, which included the cities of Detroit and Flint, Nessel said.
"Criminal enterprises target public funding programs, where hundreds of thousands, or even millions, of dollars are awarded in contracts to fulfill public work," Nessel said. "We must vigilantly defend public funds from abuse and criminal greed, especially when those crimes impact public health and safety. I am grateful for the investigative work of the Detroit Office of Inspector General, the Special Inspector General for the Troubled Asset Relief Program, and the investigators in my office for their work to defend public funds and public health."
Gillespie is charged for allegedly conducting a scheme at the company he operated, Detroit Environmental Solutions, LLC, fraudulently purported to be a distinct entity from another business, BBEK Environmental (BBEK), to satisfy requirements of TARP-funded demolition contracts obtained by BBEK that required air quality monitoring be conducted by an independent third-party business, Nessel said.
The People allege the business was funded by and operated by principals of BBEK, and was to keep air testing expenses within the scope of revenue for BBEK, according to Nessel.
Gillespie is charged with:
- One count of Conducting a Criminal Enterprise, a 20-year felony
- One count of False Pretenses: $20,000 - $50,000, a 15-year felony
- One count of False Pretenses: $50,000 - $100,000, a 15-year felony
- One count of False Pretenses: $100,000 or more, a 20-year felony
- One count of Lying to a Peace Officer, a 2-year high court misdemeanor
Holman is charged for allegedly operating a scheme that fraudulently billed TARP and the City of Detroit over $1,000,000 collectively for dirt used to fill demolition sites that his company, Den-Man Contracting, obtained for free from prohibited or unknown sources, Nessel said.
Holman allegedly knew that the backfill material was in violation of the terms of his multiple City contracts and failed to do any testing to ensure the backfill was not contaminated given the source, according to Nessel.
The City of Detroit has experienced more than $3,500,000 in costs to test the sites where Den-Man Contracting's prohibited-source dirt was used, according to the attorney general's office.
Holman is charged with:
- One count of Conducting a Criminal Enterprise, a 20-year felony
- Five counts of False Pretenses: $100,000 or more, a 20-year felony
- Two counts of False Pretenses: $50,000 - $100,000, a 15-year felony
- Four counts of False Pretenses: $1,000 - $20,000, a 5-year felony
"The requirements by contractors to adhere to all State and Federal laws and regulations and use safe and approved backfill materials and substantiate backfill costs are critical to ensuring TARP funds are properly spent for the public's safety and program requirements in Detroit," Melissa Bruce, SIGTARP Principal Deputy Inspector General said.