Michigan Land Bank contractor charged with overbilling on blight jobs
Lansing — An arrest warrant was issued Tuesday for a state contractor who allegedly overbilled the Detroit Land Bank Authority for services related to asbestos removal and housing blight demolition he never performed.
Barry Ellentuck, 53, of West Bloomfield, president of ADR Consulting LLC, is accused of pressuring an employee to falsify invoices to overbill the land bank an extra 100 hours at $55 an hour.
Attorney General Bill Schuette’s office said Ellentuck will be charged with one count of attempted false pretenses with intent to defraud the government between $1,000-$20,000. The felony carries a 21/2-year jail sentence.
“As Detroit continues to rebound, it is imperative that we not allow anyone to stand in the way of the progress we are seeing,” Schuette said in a statement. “We cannot allow criminal behavior in the new Detroit.”
The state and city land banks did not pay ADR for the alleged overbilling. The agencies spotted “inconsistencies in the work completed versus hours billed,” prompting an inquiry, according to Schuette’s office.
“Earlier this year, Detroit Land Bank staff uncovered evidence of potential billing irregularities, prior to payment, on the part of ADR,” Carrie Lewand-Monroe, executive director of the Detroit Land Bank Authority, said in a Tuesday statement. “The Detroit Land Bank staff immediately shared that information with the state of Michigan and has supported the attorney general investigation.”
ADR was under contract with the Michigan Land Bank to provide consulting services to the Detroit Land Bank for inspecting asbestos removal and other blighted housing demolition work through an intergovernmental agreement.
ADR issued a statement Tuesday evening, calling the charges a “politically motivated attack.”
“Preliminarily, ADR and its managing member, Barry Ellentuck, categorically deny the allegations as untrue and intend to vigorously defend themselves,” the company said in a statement. “We are confident that this politically motivated attack on ADR and Mr. Ellentuck will be resolved in their favor.”
The charge against Ellentuck was filed in Oakland County Circuit Court. A charging document identifies ADR Consulting employee John Buck as the complaining witness to Ellentuck’s attempted overbilling.
Separately, the state’s housing development agency is suing ADR for fraud, breach of contract and conversion.
The state’s lawsuit alleges a breach of contract on claims ADR falsified time sheets and forged inspector signatures on documents it submitted to the state to receive payments.
ADR was paid a $25,000-per-month flat fee plus billed the Michigan Land Bank $168,215.09 for inspections from April 2012 until its contract was ended in April, said Katie Bach, spokeswoman for the Michigan State Housing Development Authority.
ADR also improperly billed for time as inspection services even though it was covered under the flat fee, the state’s complaint alleges.
The company, the state’s complaint claims, failed to abate at least two properties, tampered with records and overbilled for services.
Outside of Detroit, ADR would bid out demolition contracts for the Michigan Land Bank authority and served as a “pass-through” for and $10,091,027 in payments for housing demolitions, Bach said.
The Michigan Land Bank and MSHDA allege in the lawsuit that the state paid ADR in early April for the demolition work done by at least two of its contractors. ADR has not paid the contractors, the state says.
One of those contractors, Able Demolition, has sued ADR Consulting in Oakland County Circuit Court, alleging ADR stiffed them out of money, according to court records.
Staff Writer Christine Ferretti contributed.