Detroit temporarily bans 3 abatement firms involved in demolitions

Sarah Rahal
The Detroit News

Detroit — The City of Detroit temporarily barred three environmental companies and their head associates Thursday from doing work for the city after an investigation turned up criminal activity and conflicts of interest while they were contracted to perform demolition site abatements.

The Detroit Office of Inspector General issued a final report determining a debarment was necessary for BBEK Environmental LLC and its owner Kevin Woods; HC Consultants and its owner James Harvey; and Green Way Environmental and its owner William Scully.

The debarment means the companies may conduct no work for the city for the next 20 years. Associates Harvey and Scully are debarred for the next five years and Woods for the next 20 years.

Fresh piled dirt is seen near a vacant home on Faust near Constance in Detroit after a demolition on May 18, 2016.

Before demolishing a building, contractors bring in asbestos abatement companies to perform the work. After that, another company comes in to perform an air quality test.

BBEK provided asbestos abatement services as a subcontractor for demolition companies that contract with the Detroit Land Bank Authority and are part of a federal Hardest Hit Fund Demolition program, with BBEK's contract amount being $741,000.

Complaints by the Land Bank Authority against the Warren-based companies were filed in July 2019, alleging the three companies were not in compliance with requirements and suspected of conflict of interests between the three. The Asbestos Contractors Licensing Act requires abatement companies to hire a neutral party to conduct a post-abatement air monitoring check, according to the report.

The city issued a suspension and conducted an investigation with the Michigan Attorney General's Office. At the time, each owner contended that each had no ownership ties to the other businesses.

Woods founded BBEK Environmental in 2014, the same year HC Consulting was incorporated to conduct post-abatement air monitoring. Harvey, who was listed as an owner of HC Consulting, was also found to be a private investor in BBEK until 2014.

Green Way also conducts post-abatement air monitoring. It was incorporated in 2017 and is owned by Scully, who is also the chief financial officer of BBEK, according to the report.

Inspector General Ellen Ha stated that Woods' actions on behalf of the three companies "lacked business integrity and business honesty." She further stated that Harvey and Scully allowed Woods to use their names as owners of the air monitoring companies.

"Based on our investigation, the facts as found and supported by the entire record of information and a preponderance of the evidence as detailed above, the OIG finds that BBEK, HC Consulting, Green Way, Kevin Woods, James Harvey, and William Scully are not responsible contractors," Ha wrote. 

Woods played a key role in Detroit's federal demolition program. He was arraigned in February 2021 on multiple felony charges stemming from allegations that he misrepresented project costs and bribed a contractor.

Last month, the 51-year-old of Harrison Township man pleaded guilty to one count of false pretenses for a violation of the Asbestos Abatement Contractors Licensing Act. He was sentenced to two years of probation, restitution for under-reported Michigan Department of Licensing and Regulatory Affairs fees and 100 hours of community service.

Woods, who remains listed as president of BBEK on its website, could no longer be reached as the company was bought out by Detroit Environmental last year, a representative said Thursday.

Woods, Harvey and Scully had until June 29 to request an administrative hearing or until Monday to appeal the inspector general's findings. Individual attorneys for all three issued statements to the OIG stating they would not be contesting the debarment. 

Separate complaints involving BBEK were filed in June 2018 by DLBA asserting multiple properties abated by BBEK failed the post-abatement verification. 

"The allegation included documentation that showed BBEK submitted paperwork indicating all asbestos containing material was removed when subsequent testing indicated that this was false," according to the report.

Money laundering was also found to be an issue. Woods claimed to the Office of Inspector General that Green Way was paying BBEK for rent and services, but the OIG report indicated he was trying to hide the true relationship.

"Mr. Woods took $75,000 on two separate occasions from the BBEK account and moved that money to his personal Flagstar account," according to the report.

"Once those funds posted he then took the money from his personal account and moved it to the Green Way account. Then once they posted in the Green Way account he moved the money back to the BBEK account and claimed the money was for payment of rent and for reimbursement of employee labor."

Ha stated that conducting business within Detroit can be lucrative for contractors, but the contractors must understand that the agreement is for the benefit of the public.

"They must understand that we trusted them to abide by the law and to the terms of the contract. As such, we will hold them accountable if they violate that trust. This is how we ensure honesty and integrity in our government.”

Melissa Bruce, acting special inspector general for the Troubled Asset Relief Program, commended the work of Detroit's OIG.

“Mr. Woods defrauded the Blight Elimination Program and put residents of Michigan at risk by violating asbestos abatement air monitoring regulations.”

srahal@detroitnews.com

Twitter: @SarahRahal_