Detroit Contractor Admits to $1.2M Demolition Scam, Agrees to Repay Stolen Funds

A Warren contractor has pleaded no contest to a felony charge, entangled in a hefty scam that overbilled Detroit’s demolition program to the tune of $1.2 million and contaminated neighborhoods with hazardous dirt. David Holman, the 48-year-old owner of Den-Man Contractors, was accused of defrauding the federal Troubled Asset Relief Program and the City of Detroit, reports The Detroit News.

The scam, running from 2017 to 2019, involved Holman’s firm receiving over $12 million in contracts for demolition works, using money from the Hardest-Hit Fund. Den-Man falsely claimed expenses for clean dirt used as backfill at demolition sites, however, the “clean” dirt was neither bought nor clean, prosecutors allege. The real kicker, as Michigan Attorney General Dana Nessel highlighted, is the aftermath: dozens of Detroit lots left riddled with contamination “all to line the pockets of greedy criminal contractors”, as per the Michigan Department of Attorney General.

Holman’s plea deal includes 100 hours of community service, probation, and repayment of the stolen funds by April. He’s the second person to plead in the case after David MacDonald, another Den-Man employee, who confessed guilty to a parallel felony and accepted a similar sentencing agreement in January.

Both men are on the hook for a staggering $4 million in restitution. The fallout of their actions has been extensive, with the city forced to shell out over $3.5 million in cleanup costs. Of almost 200 sites assessed, 87 have failed testing standards, leaving 51 residential properties in a purgatory of contamination and anxiety.

This elaborate fraud was laid bare by a collective effort of the Attorney General’s office, the Detroit Office of Inspector General, and SIGTARP, a watchdog ensuring the proper use of federal funds. Their investigations unearthed the misuse and deceit in the Detroit demolition contracts. Contractors “are required to adhere to all contracts, State and Federal laws and regulations and must use safe and approved backfill materials and substantiate backfill costs which are critical to ensuring TARP funds are properly spent for the public’s safety and per program requirements,” explained Melissa Bruce, SIGTARP’s Principal Deputy Inspector General.

The sentences for MacDonald and Holman are due on March 15 and April 12, respectively, set by Judge Keifer Cox and Judge Mariam Bazzi of Wayne County Circuit Court. As the dust begins to settle on this case, the full extent of its repercussions on Detroit’s neighborhoods is still crystallizing.