Macomb County corruption figure convicted in bribery scandal

Robert Snell
The Detroit News

Jurors Friday convicted a Macomb County businessman caught on an undercover FBI video giving a politician a $10,000 bribe hidden in a fat yellow envelope.

Engineering firm owner Fazullah Khan, 58, of Troy was convicted of four bribery counts and taken into custody after jurors deliberated for about 90 minutes following a five-day trial in front of U.S. District Judge Robert Cleland in federal court in Port Huron.

Khan stood trial in a long-running public corruption scandal in Macomb County after rejecting a plea deal that called for up to 2 1/2 years in prison. He could be sentenced in November to more than 12 years behind bars.

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

“Our office is continuing our battle against bribery and corruption every day, and the jury’s guilty verdict shows the people of Michigan won’t stand for this corruption, either,” U.S. Attorney Matthew Schneider said in a statement.

Corruption defendants who have stood trial in federal court in recent years have paid a stiff price after rejecting plea deals. Former Detroit Mayor Kwame Kilpatrick is serving a 28-year sentence, Reynolds was sentenced in February to 17 years in prison and Detroit Metropolitan Airport manager James Warner faces more than 30 years behind bars for pocketing $6 million in kickbacks from contractors.

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“The great risk in going to trial is if you are convicted, you are probably looking at a much more substantial prison term,” said Peter Henning, a Wayne State University law professor and former federal prosecutor. “It is generally referred to as the trial penalty, and it is going to cost you.”

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.

Anthony Marrocco

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

What Khan didn't know was township 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.

Steven Hohensee

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.

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