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Fazullah Khan meets with Washington Twp. supervisor Dan O'Leary on Nov. 12, 2014 The Detroit News

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A secretly recorded FBI video shows a Macomb County businessman giving a politician what prosecutors call a $10,000 bribe hidden in a fat yellow envelope.

The video is among evidence amassed by federal investigators against Fazullah Khan, the latest person to stand trial in a long-running public corruption scandal in Macomb County.

The scandal has led to federal charges against 22 contractors and public officials and produced 17 convictions, including those of former Clinton Township Trustee Dean Reynolds, trash mogul Chuck Rizzo and towing titan Gasper Fiore. 

The investigation is ongoing and targeting former Macomb County Public Works Director Anthony Marrocco. His former deputy, ex-Macomb Township Trustee Dino Bucci, is cooperating with the investigation.

The trial of Khan, 58, an engineering executive from Troy who sought contracts with Macomb County communities, started Monday and is expected to finish Thursday in Port Huron. He rejected a plea deal that called for up to 2 1/2 years in prison but if convicted of four bribery charges, he could spend more than 12 years behind bars.

Khan is accused of paying $11,000 in bribes to Washington Township public officials and is fighting the criminal case by alleging he was entrapped by the government.

What Khan didn't know was Supervisor Dan O’Leary and the late Steven Hohensee, Washington Township’s superintendent of public works, were cooperating with federal agents.

The FBI investigation dates to late 2013. That's when O'Leary told FBI agents he was concerned about possible corruption involving Hohensee and a developer.

FBI agents approached the developer, who agreed to cooperate and record his interactions with Hohensee, according to court records. FBI agents later recorded the Washington Township public official receiving two bribes from the developer.

Prosecutors say Hohensee also received $1,000 in gambling money and went on a chartered fishing trip paid for by Khan.

Agents confronted Hohensee with the recordings and he started cooperating with investigators and recording meetings with Khan.

"He told agents that Khan admitted to bribing public officials in multiple municipalities," federal prosecutors Michael Bullotta and Steven Cares wrote in a court filing. "In addition, Hohensee said that Khan offered to bring him in on a land deal."

In an October 2014 meeting recorded by the FBI, Hohensee and Khan discussed a township engineering contract, according to the government. Hohensee told Khan to "help" the Washington Township supervisor, who was "looking for around ten grand," according to the government.

Khan said he would take care of O'Leary, the supervisor, according to a trial brief filed by prosecutors.

"It's a done deal," Khan said, according to the brief.

The next month, in November 2014, O'Leary recorded a meeting with Khan and requested a $10,000 cash bribe, according to the government.

"Here’s what we’re going to do," Khan said in one recorded conversation, according to the government. "I’ll come to your office. This is how — trust me I’m an expert at this okay? I’ll come to you."

A week later, Khan arrived at O'Leary's office. An FBI video camera recorded the meeting.

In the video, Khan is shown dropping a thick envelope on O'Leary's desk. Prosecutors say the envelope contained $10,000.

rsnell@detroitnews.com

(313) 222-2486

Twitter: @robertsnellnews

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