Evans, commission chair call for reviews of treasurer's family land purchases

Christine MacDonald
The Detroit News
Wayne County Treasurer Eric R. Sabree.

Detroit — Wayne County Executive Warren Evans and the chair of the Wayne County Commission both called for separate reviews Wednesday of auction purchases by the family of Treasurer Eric Sabree. 

Evans said he sent a letter to the county's ethics board Wednesday urging them to review the real estate transactions detailed Tuesday in a Detroit News investigation, which he called "extremely troubling."

He said he also reached out to the Wayne County Prosecutor's Office. 

County Commission Chairwoman Alisha Bell on Wednesday said she was concerned enough that she requested the commission's Auditor General start its regular audit of Sabree's office several months early to look into the real estate deals. 

Evans told The News on Wednesday that more needs to be known about what happened.

"You don't have a policy that prohibits something and then knowingly violate the policy," Evans said. "People need to have faith in the process.

"The county has worked hard on improving transparency for years, and this does not help that."

The Wayne County Prosecutor's Office said Wednesday night that it was informed that Evans had sent the matter to the Ethics Board.

The News' investigation found, through multiple Freedom of Information Act requests, real estate transactions involving Sabree's family that overlap his public role, including county sales involving his wife, son and nephew, along with family properties purchased at auction that later racked up enough tax debt that they could have been seized but weren't.

Treasurer's office rules ban the office's employees and their families from participating in the auction, which seizes properties from homeowners with late taxes and sells them to the highest bidder.

Sabree issued a written statement late Tuesday expressing remorse.

"I truly regret that I didn't get more involved in my family's long-standing real estate business by directing them away from auction properties," he wrote. "I assure you there was no special treatment and the facts bear out the auctions are open bidding."

Wayne County Executive Warren Evans

Calls to a Sabree spokesman weren't returned late Wednesday. 

Earlier, Sabree also said in written statements that he's only had minimal interest in U.S. Development Services — his former real estate company in question with the transactions — since his wife took over in 2006. He said he had no role in his relatives' auction purchases. But Sabree acknowledged his family's tax debt, comparing it to what many working families face today.  

Chairman Carron Pinkins said Wednesday that the seven-member county ethics board would review Evans' request.

Bell said the commission's audit will begin soon. 

"When something like this happens, we have to do our due diligence ... to look into it formally," Bell said. "I don't think the treasurer would be opposed to that."

Evans wrote in the letter to the ethics board that "it appears a serious breach of ethics has occurred and warrants further examination."

Experts told The News, including Peter Henning, a Wayne State University Law professor, that because the public has access to the auction, the purchases don't appear to be an obvious ethical violation. Current auction rules ban treasurer employees and their immediate families from participating  "directly or indirectly, in the bidding and purchasing by any means, including and not limited to, joint ventures ..." The rules don't include possible penalties for violations.

Among The News' findings:

  • U.S. Development Services, a company Sabree formed in 2002, bought three foreclosed Harper Woods homes in the 2011 auction while he was a deputy treasurer coordinating the sale. The company would later violate a requirement on two of the homes to stay current on property taxes for two years, an auction policy instituted that year to curb speculators. 
  • Ten properties either owned by Sabree, his wife or U.S. Development Services owed nearly $29,000 in delinquent county taxes as of November 2018, most of it three years late. It was paid 10 days after The News first inquired. 
  • One of those properties, a vacant west side lot on Wyoming near Marygrove College owned by his wife, escaped foreclosure this year even though it should have been sold at the annual auction, according to state law. Sabree said that was an error by his staff.
  • Sabree's son, Adam, an attorney, was listed as a successful auction bidder in 2017, pledging $9,600 for an east side brick home on Gallagher near Eight Mile and Ryan roads, according to county records. Adam Sabree said it was a mistake and he did not bid and Eric Sabree said he wasn't aware his son was listed as a bidder. 

Eric Sabree, who has been treasurer since 2016 and makes $115,891 a year, said he is a "limited member" of U.S. Development Services but his role only has been to "sign and file papers and to provide legal advice" since his wife took over.

"I was not involved with these transactions, and they were done at arm’s length ... Anyone who completed the proper forms and paid the appropriate fees could participate in the public auction of these properties."

Sabree suggests it is unclear if the rule banning family purchases would have applied in 2011 when his wife bought the three Harper Woods homes. Initially, Sabree told The News the rule was "in effect" that year, but he later responded that because the auction was run by a third-party contractor in 2011, it didn't apply. It currently is the office's policy.

Sabree previously told The News that the rule should be changed to "encourage everyone" to purchase at the auction. 

Evans said changing that ban would reduce public confidence in the process. 

But Evans told WJR-AM's Paul W. Smith earlier on Wednesday that he’s not calling for Sabree to step down from the post.

“If the findings are substantiated or added to, maybe at some later date I would weigh in differently, but right now, I think it’s too early for me to say anything other than it’s troubling and we need to know more.”

Evans added that "we have to learn to learn more about it, and I expect the treasurer will do what’s right, whatever that happens to be."

"Most people, their home is the biggest investment they will ever have in life, so clearly people who have lost their homes would be troubled by some of the things in the report," he said.

Mayor Mike Duggan said Wednesday he had not read the reporting and had no comment. 

As chief tax collector, Sabree leads one of the largest government foreclosure auctions in the nation. It has transferred ownership of more than a quarter of Detroit properties since Sabree started as deputy treasurer in 2011.

Detroit News Staff Writers Christine Ferretti and Mark Hicks contributed.