(The Center Square) – A Howell man is accused of fraudulently billing the city of Detroit more than $1 million for contaminated dirt he got for free, Michigan Attorney General Dana Nessel announced.
David MacDonald, 50, is facing criminal enterprise and false pretense charges for fraudulently billing Detroit $1.1 million for backfill dirt used at demolished properties.
The Office of the Special Inspector General for the Troubled Asset Relief Program, a federal agency tasked with preventing and detecting fraud, waste, and abuse in the federal funds appropriated by Congress through the Emergency Economic Stabilization Act and the Consolidated Appropriations Act of 2016, conducted the investigation.
In 2017, MacDonald led the Den-Man company’s demolition program. Den-Man contracted with the city of Detroit. The contract made Den-Man responsible for backfilling sites of demolished properties with dirt from approved sources, and the company could bill the city for the acquisition price of that dirt.
Allegedly, MacDonald repeatedly claimed to have paid for dirt used at these sites he had obtained at no cost, lied about the source of the dirt, and billed the Detroit Land Bank Authority. Den-Man received $1,148,513.61 for reimbursement for backfill material without actually incurring those costs. Furthermore, the alleged unapproved source of backfill material is considered environmentally contaminated.
“These crimes, a scam against the people of Detroit and abuse of public funds, amount to public harm for private greed,” Nessel said in a statement. “We have a responsibility to protect public funds from abuse, and to protect already vulnerable neighborhoods from environmental attacks. I am grateful to the SIGTARP team for their work with our office.”
MacDonald is charged with conducting a criminal enterprise and 11 counts of false pretenses. MacDonald is alleged to have knowingly obtained backfill material from an unapproved source that did not comply with the terms of the contract or the requirements of the state of Michigan. Those sites now must be tested for their environmental quality.
Melissa Bruce, SIGTARP principal deputy inspector general, applauded the charges.
“This investigation stems from the reviews of the Detroit HHF, to ensure that backfill dirt used by contractors complies with the program requirements,” Bruce said in a statement. “The requirements by contractors to 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.”
DLBA has agreed to repay $1 million due to monitoring issues in the program.
This article First appeared in the center square