Feds probe Detroit police officers in towing scandal

George Hunter
The Detroit News
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Federal investigators probing Detroit towing magnate Gasper Fiore also are looking into alleged crimes involving him and multiple Detroit police officers, according to three police sources familiar with the investigation.

The officers were recorded on wiretaps discussing unspecified illegal activity connected to Fiore’s tow operations, the sources told The Detroit News. Detroit police and FBI officials declined to comment.

Fiore was arraigned Tuesday in federal court on charges he participated in a widespread bribery conspiracy in Macomb County. The Grosse Pointe Shores business mogul is one of 12 people charged in the case.

Amid the federal investigation, Detroit officials are distancing themselves from Fiore, after years of doing business with him. The Detroit Police Board of Commissioners voted Thursday to suspend Fiore’s tow permit and remove the six towing companies he owns from the department’s tow rotations.

Detroit Police Chief James Craig declined to comment about the FBI investigation or the police board’s action, but said the city is working to rescind leases of two southwest Detroit properties owned by Fiore: 2121 Fort, where vehicle impounds are stored and which houses other units, including the laboratory that tests narcotics; and 7800 Dix, where the Commercial Auto Theft Unit is located.

“We’re working with Corporation Counsel to terminate those leases,” Craig said. “With the indictment (of Fiore), we’re taking steps to get out of those properties, but to move out fast is a monumental challenge.”

It’s unclear whether the current investigation into Fiore and Detroit police officers is connected to an FBI probe in which six DPD cops were suspended last year.

In that case, a police source familiar with the investigation told The News the suspended officers were accused of taking bribes from an undisclosed tow company owner in exchange for funneling work, including towing stolen cars, to the firm.

The source said the scam also involved two Wayne County collision shops that allegedly stripped stolen vehicles and collected thousands of dollars from insurance companies for unnecessary repairs.

Officers in the Abandoned Vehicle Unit troll the city for stolen or abandoned vehicles. When they find one, they are supposed to alert dispatch, which assigns one of 23 authorized tow companies to pick it up, depending on where the vehicle was found and which firm is next on the rotation list.

The source said the suspended officers didn’t alert dispatch, but instead called one tow company to pick up the vehicles. The tow company usually paid the officers between $50 and $100 cash for each car towed.

Officers would look for vehicles with minimal damage, such as ignition switch damage or missing tires, the source said. The tow company would then tell the owner their stolen vehicle had been recovered with unspecified damage, and that the tow firm worked with a collision shop that would waive the deductible for repairing it.

If the owner agreed to have the work done at that collision shop, employees then would strip vehicles of their motors, transmissions and other major parts without the owners’ knowledge. When a claims adjuster for the owner's insurance company saw the stripped vehicle, thousands of dollars in damages would be assessed.

The collision shop owner would collect the money, put the parts back on the vehicle and do the minor repairs for the original damage before telling the owner to pick up the vehicle. The owners were never aware of the scheme, the source said.

Tim Wiley, spokesman for the Detroit FBI office, declined to discuss the investigations, and Fiore did not return a phone call seeking comment.

The Board of Police Commissioners voted 9-0 to pull Fiore’s towing permit, ending more than a decade of controversy.

Board members directed questions to Detroit Corporation Counsel Butch Hollowell, who said in a written statement: “The actions taken by the Board of Police Commissioners were both lawful and appropriate. There will be no further comments at this time.”

The city’s business deals with Fiore were called into question in a series of 2005 audits that found former police officials gave an inordinate amount of towing business to Fiore, in violation of the towing rules, and awarded Fiore no-bid leases and overpaid for his buildings that were used for police operations.

The 2005 reports by City Auditor Joe Harris found the city never entered into a management agreement with Gene’s Towing, a Fiore-owned company that managed the impound lot on Fort Street. After the 2005 audit, the company was transferred to Paul Ott, although the firm continued operating out of Fiore’s building at 7770 Dix in southwest Detroit.

The 10-year lease for the lot overstated its size by almost 9,000 square feet, costing taxpayers an extra $65,000 per year than if the actual footage was used, the report found. Over the life of the contract, the city overpaid by $1 million, the audit found.

Harris’ audits suggested that Detroit retool its towing operation, but when the police board began restructuring the process in 2009, accusations of intimidation, stalking and corruption began to fly.

Ex-Commissioner Michael Reeves filed a police report in September 2010 claiming he was threatened to refrain from voting on the proposed rules. Ex-Commissioner Jerome Warfield said at the May 5, 2011, board meeting that he had been followed.

For years, representatives from other towing companies packed police board meetings, often complaining Fiore was getting more than his share of the city’s towing business.

Fiore was indicted in federal court last month on charges he bribed Clinton Township Trustee Dean Reynolds. The U.S. Department of Justice charged Fiore and Reynolds with multiple counts of bribery-related offenses in connection with a towing contract.

If convicted, Fiore could get 20 years in prison.

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