David Jeremy Gillespie, 39, of Detroit, and David Holman, 48, of Metamora, were each charged 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.
Officials say both men were charged this week in Lansing.
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“Criminal enterprises target public funding programs, where hundreds of thousands, or even millions, of dollars are awarded in contracts to fulfill public work,” said Michigan Attorney General Dana 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.”
Officials say Gillespie was charged for allegedly conducting a scheme whereby the company he operated, Detroit Environment Solutions, LLC, fraudulently purported to be a distinct entity from another business, BBEK Environmental, to satisfy requirements of TARP-funded demolition contracts procured by BBEK that required an independent third-party business conduct air quality monitoring, a critical requirement when dealing with asbestos and other harmful particles.
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 was charged for allegedly operating a scheme that fraudulently bullied 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.
The 48-year-old is alleged to have known 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.
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 which have failed testing standards for contaminants, with 51 residential properties remaining 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.
“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,” said Melissa Bruce, SIGTARP Principal Deputy Inspector General. “These investigations stem from the reviews of the Detroit HHF to ensure that contractors comply with the program’s contractual requirements. 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.”
