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Grundy Pleads Guilty to Honest Services Wire Fraud

Breaking News - Original 06-04-2013 Hits:301 Chronicle Staff  - avatar Chronicle Staff

Grundy Pleads Guilty to Honest Services Wire Fraud

  Former Wayne County Assistant County Executive Michael Demetrus Grundy, of Detroit, Michigan, pleaded guilty today to conspiracy to commit honest services wire fraud in connection with his position as Executive Director of HealthChoice of Michigan, United States Attorney Barbara L. McQuade announced today.  Joining McQuade in the announcement were Special Agent in Charge Robert D. Foley, III, Federal Bureau of Investigation and Special Agent in Charge Erick Martinez, Internal Revenue Service, Criminal Investigation.    According to court records, on October 19, 2011, Grundy caused the accountant of HealthChoice to wire transfer $400,000.00 to a company called Medtrix, falsely representing that the payment was pursuant to a contract between HealthChoice and Medtrix executed on March 1, 2011 for Medtrix to develop and implement an electronic medical records (“EMR”) system for HealthChoice medical providers. However, the contract was actually not executed until October of 2011, and it was not approved by the HealthChoice Board of Trustees. Further, Medtrix never created or obtained any EMR programming, and an EMR system that was developed by another company was already being offered to HealthChoice networks and medical providers.    Co-conspirator Keith Griffin pleaded guilty on May 10, 2012 to the wire fraud scheme. He admitted that Grundy used his position as Executive Director of HealthChoice to authorize fraudulent payments to Medtrix and Advertise Me (also owned by Griffin), and that Griffin kicked back substantial portions of those payments to Grundy. In his plea agreement, Grundy admits that he was receiving kickbacks of funds that were supposed to be used for the benefit of the participants of HealthChoice insurance programs.    Grundy faces a maximum of twenty years in prison, a fine of up to $250,000, and forfeiture of the unlawful payments he received.  United States Attorney McQuade said, "The citizens of Wayne County deserve honest services from their public officials. It is particularly offensive...

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Former Highland Park Police Officer Pleads Guilty to Bribery and Extortion …

Breaking News - Original 05-23-2013 Hits:343 Cathy Nedd - avatar Cathy Nedd

Former Highland Park Police Officer Pleads Guilty to Bribery and Extortion Conspiracy

    A former Highland Park Police officer pleaded guilty today to conspiring with three other police officers to protect shipments of cocaine and to take bribes in return for not appearing in court as a witness, U.S. Attorney Barbara L. McQuade announced today.    McQuade was joined in the announcement by FBI Special Agent in Charge Robert D. Foley, III.    During a hearing before U.S. District Judge Avern Cohn, Anthony Bynum, 29, of Highland Park, Michigan, admitted that he and another Highland Park police officer accepted a $10,000 bribe from a man they had arrested on gun charges in return for agreeing not to appear as witnesses at the man’s November 7, 2012 criminal trial.    Bynum also admitted that in late 2012 and early 2013, he agreed with three other Highland Park police officers to take money in exchange for protecting shipments of cocaine. Bynum admitted that on November 15, 2012, he and another Highland Park police officer protected and delivered a shipment of what they believed were two kilograms of cocaine in exchange for $1,500 in cash. Bynum further admitted that on January 23, 2013, he protected two cars containing what he believed to be a total of four kilograms of cocaine. Bynum brought his police badge and gun to protect the shipments. Two other Highland Park police officers drove the cars containing what they believed to be cocaine. Later, Bynum accepted $1,500 in cash from an FBI informant for his work in delivering and protecting the drug shipment.   United States Attorney McQuade said, "Police officers who take bribes have no place in law enforcement. They will be prosecuted for violating their duties to serve the public.”   FBI Special Agent in Charge Foley stated, "Police officers who swear an oath to serve and protect must be held to the highest standards of ethics and integrity. The...

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UPDATE: Election commission decides to keep Duggan on the ballot

Breaking News - Original 05-23-2013 Hits:1693 AJ Williams, Chronicle Web Editor - avatar AJ Williams, Chronicle Web Editor

UPDATE: Election commission decides to keep Duggan on the ballot

Today the election commission decided to keep mayoral candidate, Mike Duggan on the ballot despite Tom Barrow's claim Duggan was ineligible to run for mayor. The commission concluded a candidate must be a qualified resident and registered voter in the city of Detroit one year prior to the filing deadline.  

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Mayor Bing Announces AAA Michigan Support for Fire Equipment

Breaking News - Original 05-16-2013 Hits:541 Cathy Nedd - avatar Cathy Nedd

Mayor Bing Announces AAA Michigan Support for Fire Equipment

    Detroit Mayor Dave Bing announced today that AAA Michigan will donate $23,500 to the Detroit Public Safety Foundation to pay for the inspection of 20 aerial ladders and 4,600 feet of ground ladders used by the Detroit Fire Department (DFD).  The gift is the latest in a recent series of recent corporate donations in support of the City of Detroit’s public safety operations.   “Once again, one of Detroit’s corporate citizens has come forward and generously shown its support for our public safety operations, our first responders and our citizens,” Mayor Bing said.  “The proper inspection of our fire department’s aerial ladders and ground ladders was a critical need that AAA Michigan has graciously met.  I appreciate the leadership and continued concern for public safety that AAA has demonstrated with this gift.” "Our history of supporting the community dates back nearly a century," said AAA Michigan President Steve Wagner.  "We are very pleased to present the Detroit Fire Department with this grant, which we know will help save lives."              The ladder inspections are required to keep DFD equipment in compliance with standards of the National Fire Protection Association (NFPA), an independent organization that establishes fire safety codes and regulations for various industries and the firefighting profession.  Detroit Fire Commissioner Donald Austin ordered last February that until a full inspection of the entire ladder fleet is completed, DFD will not engage in manned aerial ladder operations -- unless there is an immediate threat to life.  In cases where a manned ladder must be used, every effort will be made to properly support the ladder.  DFD continues to use unmanned aerial ladders as “water towers” to fight large fires. “We are grateful for AAA’s generous donation,” Commissioner Austin said.  “Aerial ladders can place firefighters 100 feet above ground, often with large amounts of water flowing under high pressure.  Because...

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EFM Report: Detroit Should Get Out of Power Supply Business

Breaking News - Original 05-13-2013 Hits:311 Cathy Nedd - avatar Cathy Nedd

EFM Report:  Detroit Should Get Out of Power Supply Business

  The current state of Detroit’s electricity grid is not only unreliable but a burden to the city and its residents and the maintenance of the public lighting system has cause the city to continue to operate at a loss, according to a new report emergency financial manager Kevyn Orr will release Monday to the public.   The report is coming 45 days after Gov. Rick Snyder named Orr, a Washington DC bankruptcy attorney emergency manager setting in motion the emergency wheels to get the city on the road to financial stability. According to the report the city estimates a $250 million to $500 million in capital improvements that would be needed to modernize Detroit’s public lighting system, funds that the city does not have and cannot generate at this time. “The Emergency Manager believes that it is in the best interest of the citizens of Detroit for the city to exit the power supply business. As of 2010, when the city ceased generating a portion of the electricity it sold, the grid has solely operated as a resale mechanism for its 200-­‐plus customers. The current state of the City's electricity grid has been characterized as unreliable, as well as a liability to the city and its citizens,” the report stated. “. Accordingly, the Emergency Manager seeks both to limit the city's exposure to the liabilities associated with an aging grid and provide a solution to ensure reliable power to the City of Detroit. For this reason, the city's electricity customers will be transitioned to a third party, and the grid will be closed down pursuant to a phased plan.” The Detroit Public Lighting (DPL) department serves over 200 commercial electric customers and about 88,00 streetlights.  The report cites the recently created Public Lighting Authority (PLA) as part of a comprehensive plan to overhaul the city’s...

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Detroit Emergency Manager Defends Use of Consultants in Financial Recovery

Breaking News - Original 05-13-2013 Hits:385 Cathy Nedd - avatar Cathy Nedd

Detroit Emergency Manager Defends Use of Consultants in Financial Recovery

  The criticism that the use of consultants getting paid over a million dollars per month to help craft a financial recovery map for Detroit is baseless according to emergency financial manager Kevyn Orr. Since December of last year, Detroit agreed to pay $14 million to nine different companies to provide financial and legal services in the city’s turnaround. In an exclusive interview with the Michigan Chronicle’s Bankole Thompson ahead of his Monday announcement of a financial operating plan, Orr vigorously defended the city's consultants saying it is disingenuous for some to be questioning use of consultants some of whom were here before his arrival. “I think part of it is Detroit’s been sort of removed from the world. First of all the amount of money that’s paid is actually small relative to other major cities. We shouldn’t be so provincial about the dollars,” Orr said. “We’ve gotten ourselves into a situation where the amount of debt given ordinary course- the way the city has been running- somebody’s got to come in here with a fresh perspective and say we can’t continue running in place, doing what we are doing that’s taken us to the edge of ruin.” Orr said if the city were to shut down today and no police or fire services in operation as well as the water department, the city could not pay of its debt in half a generation. He said the magnitude of work that has to b done in a city that has over 15 billion dollars of debt against a revenue stream of a billion dollars or less requires new fresh eyes. “Frankly in my opinion to have the consultants most of whom were here before I got here and to hear any criticism about consultants that have been here longer than a year helping the city is...

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Belle Isle Developer Says They Don't Want to Secede

It’s a proposal that has ruffled the feathers of almost everyone who has read about it: Sell Belle Isle to a group of private developers so they can secede the island from the U.S. and make it an elite tax haven for the rich? How bizarre.

It’s a proposal that has ruffled the feathers of almost everyone who has read about it: Sell Belle Isle to a group of private developers so they can secede the island from the U.S. and make it an elite tax haven for the rich? How bizarre.

But that’s not the whole story. One developer who is part of the group offering to shell out $1 billion to buy Detroit’s 985-acre island park is Larry Mongo, a lifelong Detroit businessman who says media coverage of the plan has been lacking.

Mongo says reports that he and his colleagues plan to buy Belle Isle and secede it from the United States are untrue. The offer of turning Belle Isle into an exclusive commonwealth is more of a negotiating tactic than anything else, Mongo suggests.

“We don’t want to secede,” Mongo told michronicle.com “We just want certain tax autonomy. And all that can be negotiated. You know, you put everything on the table that you want and you see what happens.”

He said the plan is still in the introductory phase and the futuristic fiction book his collogue Rod Lockwood wrote about the idea is a sort of attention-getter forerunning a more formal proposal. Lockwood, who spearheaded the idea, presented it before a group of business leaders and elected officials last week to a lukewarm reaction.

But supporters of the plan say every new idea is going to get some kickback at first.

“We are not spoiled children. We are mature enough to know that not everything is going to be agreed on,” Mongo said. “But if we can compromise to the point where we can move forward, we will.”

Mongo, who worked with Lockwood and others to shape the plan over the past four years says his role is to answer a question many have been asking since its debut: What’s in it for Detroiters? The answer, he says, is jobs, jobs, jobs.

“Detroit’s problems are nothing that jobs can’t solve for the most part,” he said. “ But it has to be a special type of employment.”

Mongo said he is putting together a organization strategy aimed at small churches in the city. He plans to mobilize Detroit churchgoers and ministers who “never had a microphone put in their face.”

The idea is to gather residents with felony records looking for work with odds stacked against them and pitch the Belle Isle development plan by offering them a job. Mongo says most job postings exclude convicted felons, a portion of the population that is high in Detroit. Unemployment among felons leads to recidivism and more crime in the city Mongo says.

“I said, ‘Rod, we have thousands of kids who will never take advantage of the American dream simply because of a thing called a felony record,” Mongo said. “Most of them work two steps above slavery in the underground economy meaning they get paid under the table and employers know they are trapped under the table.”

Mongo’s agenda this year is to go to small storefront churches and organize Detroit’s returning citizens to get them to apply for constriction jobs to build projects proposed in their Belle Isle development plan for a minimum of $12.50/hour.
The end goal is a massive job fair on Belle Isle where job seekers can apply in person, a move that Mongo expects to draw out thousands of “Detroit’s poor” in support of the Belle Isle sale proposal Mongo says. There will be no Internet application for these proposed job posts, just newspaper and radio adds promoting the fair.

“That way the City of Detroit, the State of Michigan, and all the naysayers who say nobody wants to do this would see the number of people that come in to apply for jobs.” Mongo said. “A lot of people can sit at a typewriter and say what the people don’t want.”

Mongo said the job fair could happen as early as May. The plan won’t be extinguished by a lease agreement between the City and the State.

Mongo says the idea stems from an altruistic core: to help people who are struggling to live the American dream.
“Rodney Lockwood is a very successful man who made two mistakes,” Mongo said. “He got involved in Detroit, saw a lot of hurt, and he cared.”

Mongo scoffed at the class warfare, especially in Detroit, that often pits the poor against the rich. He says that unless the rich invest in Detroit, the city will continue to spiral downward into debt and insolvency.

“You think downtown would have the energy it has it wasn’t for Dan Gilbert?” Mongo asks. “He’s going to be losing money for years. So it has to be more than money. It has to be a social consciousness in us. If we were poor people no one would read this.”

Critics of the plan call it a corporate fantasy, a place where there are little to no taxes, people travel by helicopter to land on the top of a Four Seasons Hotel on the island and where the only cars allowed are Formula 1 racecars.

But Mongo doesn’t see what’s wrong with dreaming big. “Think about this: electricity was a fantasy. Penicillin was a fantasy. Everything that started that was great for human kind was a fantasy of someone’s,” he says.

He also disputes the criticism that the plan only creates low-wage jobs such as chauffeurs, waiters, and construction workers arguing, “you gotta start somewhere.”

Mongo touted a free market capitalist idea that it’s wealth that builds society. He compared Lockwood and his colleagues to families like the Vanderbilts and Rockefellers. “We’re still benefiting from the things the Rockefellers did for us.” Mongo said.

Why Belle Isle and not another tract of vacant land in a city that is known for its wide-open spaces?

There’s no other place in the city where one can snap up a mile and a half of contiguous city-owned property, something that is crucial to the development plan, Mongo said.

Despite any decisions the city council makes to lease the island to the State of Michigan, Mongo is still going to carry out his plan to organize a summer job fair to show how many people are looking for the kind of work he believes the island sale would provide.

“I will be on the radio, in the paper, knocking on minister’s doors—organizing the unheard of ministers and churches. That’s who $12.50 an hour will [appeal] to. I guarantee you it will stop thousands of people from doing ten in a Midwest penn. because they’ll have a job.”

Mongo said the building on Belle Isle would start immediately after approval of the sale, something that could happen more easily if the city goes bankrupt.

He said it’s a serious proposal that won’t be taken off the table because of pushback from critics and naysayers.

“Let’s create something called Solutionists. We don’t care if you black, white, gay or a cross dresser—let’s participate in a solution,” Mongo said, referring to Lockwood’s fiction book Belle Isle in which the political party is called the Solutionists.

But they’ll know when to throw in the towel. Mongo said he is afraid that if Detroit rejects the plan it will be passing up on a game changing opportunity. He said Lockwood is prepared to bring the plan to other parts of the state and the country where he expects it to be welcomed and to jump-start the local economy. In fact he said if he and his colleagues carry out the plan elsewhere, Detroit leaders will wish they had accepted the offer.

“Why do Detroiters like to be in second or third place?” Mongo said. “It’s the same mentality [that] chased Motown out. Trust me.” 

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