Lansing, MI - Two men, David Jeremy Gillespie, 39, of Detroit, and David Holman, 48, of, Metamora, were each charged this week with multiple felonies for allegedly conducting separate criminal enterprises to defraud the federal Troubled Asset Relief Program (TARP) of funds available to contractors conducting demolitions for areas hit the hardest by the financial crisis, which included the cities of Detroit and Flint, announced Michigan Attorney General Dana Nessel.
“Criminal enterprises target public funding programs, where hundreds of thousands, or even millions, of dollars are awarded in contracts to fulfill public work,” said Nessel. “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 whereby 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 procured by BBEK that required air quality monitoring be conducted by an independent third-party business, a critical requirement when dealing with asbestos and other harmful particles. The People allege the business was funded by and operated by principals of BBEK, and the intent was to keep air testing expenses within the scope of revenue for BBEK.
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; and
- One count of Lying to a Peace Officer, a 2-year high court misdemeanor.
Holman is charged for allegedly operating 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. Holman is alleged to have known that this 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. The City of Detroit has incurred more than $3,500,000 in costs to test the sites where Den-Man Contracting’s prohibited-source dirt was used. 87 of those properties have failed testing standards for contaminants. 51 residential properties remain untested.
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; and
- Four counts of False Pretenses: $1,000 - $20,000, a 5-year felony.
The investigations into Gillespie and Holman were conducted by the Special Inspector General for the Troubled Asset Relief Program (SIGTARP), the Detroit Office of Inspector General, and by the Department of Attorney General.
City of Detroit Inspector General Ellen Ha stated "The City of Detroit Office of Inspector General was pleased to work on this collaborative effort. Specifically, we would like to thank the Michigan Department of Attorney General and SIGTARP for their outstanding work. It is the mission of the OIG to hold city contractors accountable and with these charges being levied against David Holman and David Gillespie, we are one step closer to fulfilling our mission."
“I would like to recognize the outstanding work of the Michigan Department of Attorney General, City of Detroit Office of the Inspector General, as well as the SIGTARP investigative team. These investigations stem from the reviews of the Detroit HHF, to ensure that contractors comply with the program contractual requirements.” said Melissa Bruce, SIGTARP Principal Deputy Inspector General. “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.
Please note: For all criminal proceedings, a criminal charge is merely an allegation. The defendant is presumed innocent unless and until proven guilty.