Detroit, MI - Criminal Enterprise and False Pretense charges have been filed against David MacDonald, 50, of Howell, who is accused of fraudulently billing the City of Detroit over $1 million for backfill dirt used at demolished properties that he obtained at no cost and from contaminated sources, Michigan Attorney General Dana Nessel announced.
The investigation was completed by the Office of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP), which is 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.
In 2017, MacDonald was employed by the Den-Man company to lead the company’s demolition program. His responsibilities included finding backfill for all the demolition sites for which Den-Man was contracted by the City of Detroit to handle. The contract made Den-Man responsible for backfilling the sites of demolished properties with dirt from approved sources, and the company was entitled to bill the city for the acquisition price of that dirt. 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 for fictitious sums. 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. “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.
“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. This investigation stems from the reviews of the Detroit HHF, to ensure that backfill dirt used by contractors complies with the program requirements.” said Melissa Bruce, SIGTARP Principal Deputy Inspector General. “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.
Please note: A criminal charge is merely an allegation, and the defendant is presumed innocent unless and until proven guilty.