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Third demo contractor suspended over altered photos

Christine Ferretti
The Detroit News

Detroit — A third contractor has been suspended from Detroit’s demolition program amid claims it doctored photographs of sidewalks in an attempt to get paid.

The city’s Building Authority on Wednesday sent out a 90-day suspension notice to Detroit-based ABC Demolition to prevent the firm from bidding, contracting or subcontracting on any further demolition projects. The suspension is effective immediately, although the company can initiate an appeal, the notice said.

The penalty was prompted by an investigation conducted by the city’s Office of Inspector General after the Detroit Land Bank Authority filed a complaint this spring over concerns photographic documentation of sidewalk repairs had been altered to show work not actually done. The building authority and land bank oversee the demolition program in the city.

The findings and recommendation for ABC Demolition come after The Detroit News reported two other contractors were accused of similar allegations.

Detroit-based Direct Construction Services has been suspended since June from the federally funded program until at least 2020 after an investigation revealed the company had submitted photographs that forensic analysis revealed had been modified with computer software.

Meanwhile, Detroit-based Rickman Enterprises is appealing a 90-day suspension notice it received in June stemming from a doctored sidewalk repair photograph the company claimed had been an “inside joke” inadvertently submitted.

The newest report, dated Aug. 17, 2017, and obtained Wednesday by The News, was tied to photographs ABC submitted to the land bank purportedly showing undamaged sidewalks at two addresses on Gladys. The complaint was received by the inspector general’s office on May 25 with “strong evidence” from land bank employees that the photographs had been falsified, the report noted.

A message was left with ABC Demolition on Wednesday seeking comment.

In an interview with the inspector general’s office, a company executive admitted to altering the photos out of anger over policy changes regarding sidewalk repairs.

Contractors must submit “before and after” photographs of sidewalks at demolition sites and make all efforts to protect the sidewalks from damage. If it occurs, they are held liable. If documentation of approvals and permits for sidewalk repairs aren’t properly submitted, contractors don’t get paid.

The land bank contracted with ABC on a package of 134 properties, including the two in question. The agreement was to pay ABC up to $1.4 million. The cost for the two Gladys properties was $9,300 apiece.

On Oct. 19, 2016, ABC submitted the sidewalk photographs to the land bank. On April 12, a Michigan State Housing Development Authority representative noticed the photographs “appeared questionable” and contacted the land bank.

That same day, a land bank employee inspected the properties and determined one sidewalk had been replaced but the other remained damaged. However, in both instances, the photographs submitted were not representative of the sidewalks bordering the properties.

“As a result, all ABC invoices were placed on hold and have not yet been paid,” the report says.

On June 29, the inspector general’s office interviewed ABC Vice President Donald Wortham, who was shown the photographs submitted for payment as well as those taken by the land bank employee.

At first, the report said, he did not have an explanation for the discrepancies. But upon seeing information that indicated the photographs had been modified using Adobe Photoshop software, he admitted that he had altered them.

“He stated that he did this because he was angry that the policy changed and that contractors no longer had the option of repairing damaged sidewalks but instead had to replace them,” the report says.

MSHDA issued the requirement after it was dissatisfied with some of the repair work on sidewalks being done by contractors, land bank officials said. MSHDA revised the contract language to say all damaged sidewalks must be replaced.

Additionally, Wortham admitted he had altered additional photographs for several other properties and sent copies of those to the inspector general the following day. Site visits determined only one other sidewalk photograph had been altered.

The inspector general’s office met with Wortham again on July 17 due to the discrepancies between the information he provided and the evidence collected.

“Mr. Wortham explained that he created altered photos for the above addresses but had second thoughts on submitting all of them because he knew it was wrong. Therefore, he submitted some photographs unaltered,” the report reads. “ABC acknowledged that it knew that completing the sidewalk replacement was a requirement and that its actions were inexcusable under any circumstances.”