Detroit bans BBEK Environmental, associated companies from city work

Detroit’s Inspector General debarred three environmental companies from working with the city after a years-long investigation into improper business practices.

Warren-based BBEK Environmental, an abatement company, along with its owner Kevin Woods, is prohibited from working with the City of Detroit until 2039. Green Way Environmental and HC Consultants, which helped BBEK with air monitoring, are also prohibited until 2039. The effective date stems back to Aug. 5, 2019, when the three companies were suspended from doing work in the city while the office investigated their ownership ties.

More:Three companies suspended from Detroit’s demolition program

The three companies were subcontracted for asbestos abatement services for the Detroit Land Bank Authority and City of Detroit. The inspector general received a complaint from the Detroit Land Bank in July 2019 that BBEK was not in compliance with demolition agreements and other contracts. Officials at the Land Bank questioned the relationships among the three companies and said the post-abatement air monitoring was to be completed by an independent third-party contractor.

During the investigation, Detroit’s inspector general found records that suggested the companies and owners “engaged in improper and possible criminal activity” that violated the Asbestos Abatement Contractors Licensing Act, the office said. The inspector general’s office referred the issue to the Office of the Special Inspector General for the Troubled Asset Relief Program and issued interim suspensions.

Because the matter was referred, and underwent a criminal investigation through the Michigan Attorney General’s Office, the inspector general had to pause from debarring the companies until that investigation was completed.

Woods was arranged last year on multiple felony charges. Attorney General Dana Nessel announced in April that Woods pleaded guilty to one count of false pretenses between $1,000 and $20,000, a five-year felony, under the Asbestos Abatement Contractors Licensing Act.

He was accused of “misrepresenting project costs to avoid paying more money to the state, bribing a contractor to secure work for his company and violating state laws that require post-abatement air monitoring to be done by an independent entity,” according to a news release from the attorney general.

In June, Woods was sentenced to two years of probation, restitution for underreported fees for the Michigan Department of Licensing and Regulatory Affairs and 100 community service, according to the inspector general’s debarment report.

The inspector general’s report found that Green Way was not a neutral party to BBEK, which violated the Asbestos Contractors Licensing Act. The Act requires an abatement company to hire a third party to conduct monitoring. Once Woods was aware that their relationship was being investigated, he “created a fraudulent lease agreement between the two companies” where Woods attempted to conceal the relationship between BBEK and Green Way by laundering money between accounts to convince others that Green Way was paying BBEK rent and fees for the use of BBEK employees, according to the report.

It was found that Woods laundered money between his BBEK, personal and Green Way Flagstar bank accounts to conceal his activities, the report says.

The report also states that Harvey’s HC Consulting, which was used as a third-party air monitor, was also not a neutral party independent of BBEK Environmental. Harvey was a silent investor in BBEK, which Woods founded in 2014, the year HC Consulting formed, and he had oversight of BBEK’s finances the entire time his company acted as the air monitor, the report says.

“Mr. Woods defrauded the Blight Elimination Program and put residents of Michigan at risk by violating asbestos abatement air monitoring regulations,” said Melissa Bruce, acting special inspector general for the Troubled Asset Relief Program, in a news release.

Greenway Environmental owner William Scully and HC Consultants owner James Harvey will be disbarred until 2024, according to the inspector general’s report.

“Conducting business with the City of Detroit can be lucrative for the contractors, but the contractors must understand that the agreed upon engagement is for the benefit of the public. They must understand that we trusted them to abide by the law and to the terms of the contract. As such, we will hold them accountable if they violate that trust. This is how we ensure honesty and integrity in our government,” Inspector General Ellen Ha said in a statement.

More:Suspended Detroit demolition contractor seeks hearing amid investigation

Ha’s office is also investigating a recently suspended demolition contractor for questionable business practices in the city.

Inner City Contracting, which has been awarded more than $10 million in demolition contracts, is seeking an internal hearing this month with the inspector general to point out possible inaccuracies of an ongoing investigation claiming questionable business conduct.

The inspector general alleges that the company submitted fraudulent documentation to the city that requires a company to have an office in Detroit that functions as an administrative center where top management staff perform at least 51% of functions. This resulted in the contractor being awarded Detroit Based Business, Detroit Small Business, and Detroit Headquartered Business certifications. The city gives preference to local bidders for demolition contracts and officials could not verify Inner City’s certifications.

which would require the company to have an office in the city that functions as an administrative center where the highest-level management staff perform at least 51% of functions.

Dana Afana is the Detroit city hall reporter for the Free Press. Contact Dana: [email protected] or 313-635-3491. Follow her on Twitter: @DanaAfana.

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