News
May 22 2008
FBI probes possible misuse of federal money in Saginaw
Money was used to knock down abandoned homes
SAGINAW (WJRT) -- The FBI is investigating the possible misuse of federal money used by the city of Saginaw [Michigan] to knock down abandoned homes.
The city admits that contracting firms were overpaid for the demolition of some homes. But was it just a case of bad math, or was there criminal intent?
That's what the FBI is trying to figure out.
The details of the overspending on the demolition of abandoned homes lies in a city memorandum. But is this the whole story, or just the tip of the iceberg?
Abandoned homes. They may just be Saginaw's biggest problem: finding the money to knock down the 800 eyesores that prevent the city from redeveloping its image.
Some of the money to knock down homes comes from Housing and Urban Development, and some of that money was misspent.
"We did notice that some of the homes were miscalculated," said Saginaw City Manager Darnell Earley.
Earley says the city found the discrepancies in an audit, and that contracting firms like Owens Contracting received more money than they should have on certain jobs.
Earley says the city inspector who approved payment overestimated the size of the abandoned homes. A sample of the mistakes was laid out in a memorandum.
For example, one particular home demolished in 2006 should have cost the city nearly $4,000. Instead, the city paid out more than $8,000.
Another case involves a house demolition project on a home that cost more than $10,000. It should have cost a little more than $5,000.
"I know I haven't done anything wrong," said Jim Owens of Owens Contracting.
Owens operates Owens Contracting and it's estimated his firm was overpaid $95,000 for its work on demolished homes. He says two city workers approved the payouts.
"(They) told me how much to bill them and that's what I billed them," he said. "And each one of them checked it. If they don't know what they are doing, that's their problem."
One of those city workers has been reassigned.
"We removed one inspector from that position and we've put in place new measures where the supervisor -- the chief inspector -- must certify each demolition before we sign off on it," Earley said.
The story may not end there, as the FBI is now involved.
Earley and City attorney Tom Fancher both said they were not aware the FBI was investigating the misspent money.
(Copyright ©2008 WJRT-TV/DT. All Rights Reserved.)
The city admits that contracting firms were overpaid for the demolition of some homes. But was it just a case of bad math, or was there criminal intent?
That's what the FBI is trying to figure out.
The details of the overspending on the demolition of abandoned homes lies in a city memorandum. But is this the whole story, or just the tip of the iceberg?
Abandoned homes. They may just be Saginaw's biggest problem: finding the money to knock down the 800 eyesores that prevent the city from redeveloping its image.
Some of the money to knock down homes comes from Housing and Urban Development, and some of that money was misspent.
"We did notice that some of the homes were miscalculated," said Saginaw City Manager Darnell Earley.
Earley says the city found the discrepancies in an audit, and that contracting firms like Owens Contracting received more money than they should have on certain jobs.
Earley says the city inspector who approved payment overestimated the size of the abandoned homes. A sample of the mistakes was laid out in a memorandum.
For example, one particular home demolished in 2006 should have cost the city nearly $4,000. Instead, the city paid out more than $8,000.
Another case involves a house demolition project on a home that cost more than $10,000. It should have cost a little more than $5,000.
"I know I haven't done anything wrong," said Jim Owens of Owens Contracting.
Owens operates Owens Contracting and it's estimated his firm was overpaid $95,000 for its work on demolished homes. He says two city workers approved the payouts.
"(They) told me how much to bill them and that's what I billed them," he said. "And each one of them checked it. If they don't know what they are doing, that's their problem."
One of those city workers has been reassigned.
"We removed one inspector from that position and we've put in place new measures where the supervisor -- the chief inspector -- must certify each demolition before we sign off on it," Earley said.
The story may not end there, as the FBI is now involved.
Earley and City attorney Tom Fancher both said they were not aware the FBI was investigating the misspent money.
(Copyright ©2008 WJRT-TV/DT. All Rights Reserved.)
