Feds issue first charges in long-running Detroit demolition probe
Detroit — Federal prosecutors on Monday unsealed criminal charges against two people accused of accepting hundreds of thousands of dollars worth of bribes and rigging bids to demolish homes in the city, the first criminal charges filed in a long-running investigation of Mayor Mike Duggan's program to rehabilitate the post-bankrupt city.
The charges against two former employees of prominent contractor Adamo Group allege a pattern of corruption involving contractors and dozens of secret payoffs amidst an unprecedented plan to remove thousands of dangerous, blighted structures in a city decimated by the Great Recession.
The city has received almost $259 million in mostly federal funds in the last six years and removed more than 11,000 structures under the federal program but questions about whether the money was misspent have clouded Duggan's two terms in office.
“When you have that amount of federal money being thrown around, it’s just so tempting to reach your hand into the till and grab a little for yourself,” said Peter Henning, a Wayne State University law professor and former federal prosecutor.
The conspiracy dates to January 2010 — before the start of the federal demolition program and Duggan's first term — and continued until three months ago, in January.
The charges Monday are the latest corruption scandal to engulf Detroit City Hall in the six years since former Mayor Kwame Kilpatrick was sentenced in a racketeering and bribery scheme. Detroit City Councilman Gabe Leland is awaiting trial in a separate bribery conspiracy.
Those charged Monday were:
• Aradondo Haskins, 48, of Detroit, a former Adamo Group estimator who later worked for the Detroit Building Authority until 2016. He received $25,500 in payments from an unidentified contractor between 2014 and 2015, according to the government.
• Anthony DaGuanno, 61, of New Baltimore, a former Adamo Group estimator. He received more than $372,000 in bribes from an unidentified contractor in exchange for helping the contractor receive demolition jobs worth hundreds of thousands of dollars, prosecutors said.
He allegedly pocketed bribes from the unidentified contractor on 71 occasions starting in January 2010. The payments were made without the knowledge of Adamo or city officials, according to the court filing.
Both were charged in a criminal information, which indicates a guilty plea is expected and a sign more people could be charged with crimes during the ongoing investigation.
“There will be more,” Henning said. “These guys are just the start.”
Haskins and DaGuanno could not be reached for comment and lawyers for both men were not identified in court records. Adamo's attorney, Christian Hauser, wasn't immediately available for comment.
DaGuanno is expected to appear at 10 a.m. Tuesday in Detroit federal court. Haskins is expected to appear later in the day.
Haskins initially worked for Adamo, a Detroit company that provided demolition work throughout the U.S. and Canada, helping submit bids to the city in hopes of securing demolition contracts.
Haskins also invited subcontractors to bid. One of those firms, identified in court records as Contractor A, paid Haskins money for disclosing confidential information about bids from rival companies, prosecutors said.
The confidential information “allowed Contractor A to submit an even lower bid, ensuring that Contractor A was awarded lucrative contracts,” prosecutors alleged.
Haskins received payments at least eight times, according to the government.
He left Adamo in April 2015 and was hired by the Detroit Building Authority as a field operations manager in the demolition program. The building authority and the Detroit Land Bank oversee the demolition program.
Haskins was the primary contact for demolition contractors and was responsible for opening and reading bids, prosecutors said.
“Contractor A, knowing that Haskins was still in a position to influence the demolition contract bidding process, continued to knowingly and corruptly pay Haskins…,” prosecutors wrote.
Haskins was charged with one count of conspiracy to commit bribery and honest services fraud, a felony punishable by up to five years in federal prison.
“Mr. Haskins was terminated by the DBA three years ago. The DBA expects all of its employees to uphold the highest ethical standards," authority Director Tyrone Clifton said in a statement to The Detroit News. "Anyone who committed any illegal activity in any aspect of the demolition program should be held accountable, and we will continue to cooperate fully.”
Allegations have swirled around Haskins since fall 2016.
That's when at least one contractor in the city's demolition program signed an affidavit saying Haskins asked him to "rebalance the bid sheets" for a contract involving 38 houses.
Timothy Drakeford, a senior member of Direct Construction Services LLC, in a Sept. 28, 2016, affidavit wrote he was asked months earlier by Haskins to revise bid sheets.
Drakeford's affidavit surfaced a week after the land bank released an audit that revealed excessive demolition costs were hidden by spreading them over hundreds of properties to appear they didn't exceed limits set by the state.
DaGuanno, meanwhile, worked as an estimator at Adamo from 2010 until January. He solicited bids from subcontractors and assembled bid packages for demolition projects awarded by Detroit, prosecutors said.
He also gave Contractor A confidential information about bids from rival companies, according to the government.
In exchange, DaGuanno received more than $372,000 worth of bribes and kickbacks, prosecutors said.
DaGuanno was charged with conspiracy to commit honest services fraud, a five-year felony.
The city's program, a centerpiece of the Duggan administration, came under scrutiny in fall 2015 amid concerns over bidding practices and spiraling costs. It's since been under the scrutiny of state and local probes as well as a federal grand jury.
The program was suspended by the U.S. Treasury Department in the summer of 2016 to address concerns involving paperwork, billing and misallocation of funds. It was reinstated two months later.
Duggan recently defended the "vigorous" practices of the city's program after concerns were also raised over whether some of the dirt used to fill holes following demolitions might have been contaminated.