Fake photos alleged in Detroit demolitions

Christine Ferretti

Detroit — Two contractors have been suspended from the city’s federally funded demolition program on claims they manipulated photographs of sidewalk repairs on demolition sites to hide incomplete work so they could get paid.

Detroit’s Office of Inspector General — at the request of the Detroit Land Bank Authority — launched two separate investigations in December into allegations sidewalk repair photographs were being doctored. The land bank requires its contractors to take “before and after” photographs of sidewalks, drive approaches, neighboring residences and surrounding areas to document conditions.

“We expect that the information a contractor submits to the city is accurate and truthful. Whenever we find that is not the case, we are going to attempt to hold the contractor accountable,” Inspector General James Heath told The News on Tuesday. “The city has to have honest partners in performing services.”

One of the contractors submitted photographs that forensic analysis revealed had been modified with computer software. The other contractor turned in a photograph with two sidewalk slabs that appeared oversized, later acknowledging the shot had been doctored by an employee as an “inside joke.”

Detroit-based Direct Construction Services was flagged in December over five of its submitted photographs. In a Feb. 1 report obtained this week by The Detroit News under the Freedom of Information Act, the inspector general’s office concluded the photos were modified to disguise incomplete work and recommended the company be barred from doing work in the city’s demolition program until at least 2020. Direct Construction Services filed an appeal, which was not successful. The suspension went into effect June 13.

Rickman Enterprises Group is appealing a 90-day suspension notice it received in June for its work on a sidewalk. The Detroit-based company, meanwhile, also has sued the land bank for more than $450,000 in an unrelated dispute over an alleged breach of contract. Rickman Enterprises submitted the photograph to the land bank on Oct. 4. An employee of the company removed it on Dec. 7 and replaced it with a photograph showing the actual sidewalk repair, the company said, according to the report.

Since 2014, Rickman Enterprises has been awarded work for more than 1,000 properties valued at $16 million while Direct Construction Services received work for nearly 100 properties worth more than $1 million, according to a June analysis of city data conducted by The News.

In both of these investigated cases, the contractors had not been paid for the sidewalk repair work, Heath said.

Contractors are required to protect sidewalks from damage, and if it occurs, they are liable. If documentation of approvals and permits for sidewalk repairs aren’t properly submitted, contractors don’t get paid.

The Michigan State Housing Development Authority began placing greater emphasis on sidewalk replacement photographs in October, the report noted. The land bank communicated that interest to contractors and its own intention to review photos.

That October was when a new set of practices went into place after the demolition had been suspended for two months following a review by the Michigan Homeowner Assistance Nonprofit Housing Corp., in conjunction with MSHDA, turned up “mistakes” and “errors.”

‘Did not see anything’

In the February report, Heath’s office noted a complaint about Direct Construction Services was made by the land bank on Dec. 1, questioning the documentation for sidewalks at five properties.

The Detroit Building Authority, which oversees the demolition program with the land bank, ultimately suspended the company in June from bidding on projects until June 1, 2020, or until the exhaustion of all the federal Hardest Hit Funds, whichever is later.

Direct Construction Services, formerly known as Drakeford and Sons Trucking, is owned by Timothy Drakeford, who submitted bids and payment requests on behalf of the company. Reached Tuesday, Drakeford had “no comment” and directed questions to his attorney, who could not be reached.

The investigation into Drakeford’s company concluded land bank employees “presented strong evidence” that several of Direct Construction Services’ photographs had been “falsified.”

One property photograph had sidewalk alterations, while three others included modifications to sidewalks as well as alteration of straw and/or seeding required at demolition sites, including unexplained shadows. Another photograph altered the sidewalk, areas with tires and debris, and possibly straw and seeding, the investigation found.

The inspector general’s report detailed an interview conducted by an investigator with Drakeford on Dec. 8 as well as subsequent email conversations regarding photographs that were submitted to obtain payment. Drakeford said he hired a subcontractor to replace the sidewalks. He was unable to provide any documentation to support the claim.

“He denied any wrongdoing and stated that he did not review the photos before submitting them to the DLBA for payment,” the report noted. “Mr. Drakeford was also asked about other inconsistencies with the photos including a straight line where the straw was put down and unexplained shadows. He stated that he did not see anything wrong with the photos and that he is able to put the straw down in a straight line.”

Drakeford did admit to adding green spots to one of the questioned photographs to “conceal tires that were on the property.” He said he was directed to do so by “someone at the land bank.”

In response, Craig Fahle, a spokesman for the land bank, noted the inspector general report “and its recommendation on what disciplinary action should be taken against the company speaks for itself on the legitimacy of this claim.”

Drakeford said he did not verify the sidewalks were repaired. The subcontractor, he said, pulled the permits. Drakeford did not maintain copies.

The inspector general’s office contacted the city and determined no sidewalk permits existed for the five properties, the report noted. The office later reached the alleged subcontractor, who denied that he had done any recent work for Drakeford or took part in any photograph alterations.

An expert forensic analysis of the photographs concluded they were taken with a Samsung phone and most were modified with Adobe Photoshop.

Fahle said Direct Construction Services was not paid for the demolitions on the properties in question. One of the sidewalks has been replaced; the others are in the process.

‘Inside joke’ troubling

In a separate May 1 report, the inspector general detailed findings from questions that arose over Rickman Enterprises’ handling of a sidewalk repair.

In that case, the land bank raised concern on Dec. 2 over a photograph purportedly showing an undamaged sidewalk on Savannah Street.

The six-page report concluded Rickman Enterprises submitted “fraudulent documentation as proof of work completed to receive federal funding” and recommended the 90-day suspension.

Christian Hauser, an attorney for Rickman Enterprises, said Tuesday that “we deny the allegations and we filed our appeal.” The 90-day suspension has not yet been enforced.

Fahle said the matter is set for a hearing in September before the building authority’s contractor discipline board.

Rickman Enterprises had been contracted by the land bank in February 2016 to demolish 51 properties, including the one in question. The company was to receive $588,850 for the bundle. The contract for the Savannah property was $5,520, the report read.

On Oct. 4, Rickman Enterprises submitted a photograph to the land bank of a repaired sidewalk for the property. The company said it was repaired on the same date.

Two months later, a data entry clerk for the land bank suspected the photo might have been altered. A Detroit Building Authority field liaison traveled to the site and determined the sidewalk was repaired, but that the picture supplied by Rickman Enterprises had been altered.

In a January interview with the inspector general’s office, the company’s CEO, Roderick Rickman, and controller, Phil Yoder, explained the accounting department was responsible for assembling required documents including invoices and photographs. Both were shown the photograph and did not believe it was altered.

The following month, the company directed any remaining questions to Hauser.

Hauser, in a letter to the inspector general, noted an internal review found the altered photograph was not a deliberate attempt to defraud or mislead the land bank. Instead, it was created by an employee as an “inside joke” and inadvertently uploaded. When realized, the mistaken photograph was replaced with the real shot, the report said.

“Rickman has made it very clear to its employees that this practice is totally unacceptable, and that there is to be no digital altering of any photographs for any reason,” an explanation to the inspector general’s office read.

Rickman Enterprises submitted its invoice for the Savannah property in August 2016, but the sidewalk was not repaired until October of that year, the inspector general report noted.

“The lack of procedural safeguards which allowed what Rickman described as an ‘inside joke’ to result in a fraudulent submission as proof of work is troubling,” the report read.