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untanglingwebs
El Supremo
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Defendant Pleads Guilty to Submitting False Claims to the Federal Government
Date Published:
January 30, 2014
Press Releases
USAO Western District of Michigan Press Release
FOR IMMEDIATE RELEASE
TUESDAY, JANUARY 28, 2014
Maple Rapids Resident James Ortman Admits to Fraud in Conjunction with Federal Grants for Buildings he Formerly Owned in St. Johns, Michigan
GRAND RAPIDS, MICHIGAN — U.S. Attorney Patrick A. Miles, Jr., announced today that James Francis Ortman, 58, of Maple Rapids, Michigan, pled guilty to a felony information filed on January 8, 2014, that charged him with submitting false claims to the U.S. Department of Housing and Urban Development (HUD) in conjunction with grants awarded to him in 2008 and 2009. The grants were administered by the City of St. Johns and the Michigan State Housing Development Authority (MSHDA).
“When used appropriately, HUD grants encourage development and new job opportunities in our local communities,” said U.S. Attorney Miles. “This office will vigorously pursue those who seek to line their own pockets by diverting from their intended purpose scarce grant monies that are funded by the hard-working taxpayers of this district.”
Ortman admitted at his change of plea hearing before United States Magistrate Judge Ellen S. Carmody that in 2008 the City of St. Johns awarded him a federal grant as part of a Downtown Façade Project for his building located at the corner of North Clinton and East Walker streets. In order to receive the grant, Ortman represented to the City that the façade improvements would cost $416,999, and that the project would ultimately create four permanent jobs for low and moderate-income persons. The grant provided that if the project truly cost that amount, and if Ortman invested $216,999 of his own funds into the project, HUD would fund the remaining cost of $200,000. Ortman admitted at the hearing that he did not invest his own funds as represented and that he submitted false documents to the federal government to make it appear as if his actual costs equaled the projected amount. As a result, he received the full amount of the grant ($200,000), when he should have received less than half of this amount.
Ortman further admitted that he committed fraud in conjunction with a Rental Rehabilitation Grant that the City awarded to him in 2009. The terms of that grant required Ortman to construct apartments for income-qualified individuals in various buildings that he owned in St. Johns. Ortman admitted that he submitted claims for grant payments to the federal government for work that he did not actually complete and that he diverted those grant payments to other business ventures that were in financial trouble. As a result, many of the income-based apartments were never completed. Ortman caused a combined loss of over $200,000 to the federal government in conjunction with the façade and rental rehabilitation grants.
“HUD’s Office of Inspector General, working with the U.S. Attorney’s Office, will relentlessly hunt for predators who, despite their best efforts to conceal their theft, have swindled the taxpayer and hurt Michigan’s neediest families,” said Barry McLaughlin, Special Agent in Charge, HUD-OIG Region V. “Theft of HUD grant funding amounts to stealing from hard-working taxpayers,” added Paul M. Abbate, Special Agent in Charge of the FBI Detroit Field Office. “The FBI, in concert with our law enforcement partners, remains dedicated to pursuing those who selfishly misappropriate public funds intended for the public good.”
Ortman is awaiting his sentencing hearing, at which time Ortman will face a maximum term of imprisonment of five years, a fine of up to $250,000, and will be ordered to pay restitution to HUD. The Detroit office of the U.S. Department of Housing and Urban Development-Office of Inspector General, along with the Lansing office of the FBI, investigated the case. The prosecution of the case is being handled by Assistant U.S. Attorney Ronald M. Stella.
CONTACT: KAYE HOOKER
www.justice.gov/usao/miw/index.html
PHONE: 616-456-2404
FAX: 616-456-2517 |
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Wed Feb 26, 2014 8:38 pm |
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untanglingwebs
El Supremo
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| In my opinion there should be cases that are prosecuted in Flint and Genesee County. The lawsuit of the city against Charles Young and Operation Unification is a prime example of what I view s fraud and IRS violations. |
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Wed Feb 26, 2014 8:42 pm |
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untanglingwebs
El Supremo
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St. Johns man admits to making false claims to land HUD grants
Jan. 30, 2014 |
Written by
Sue Lounds
GRAND RAPIDS — A businessman who has redeveloped several vacant buildings in downtown St. Johns could be sentenced to federal prison after admitting he submitted false claims to the U.S. Department of Housing and Urban Development involving two projects.
James Ortman, 58, pleaded guilty earlier this month to defrauding HUD of a $200,000 grant in 2008 for a facade project in downtown St. Johns. He also admitted defrauding the government on another grant for an apartment complex in St. Johns that was never completed. Officials did not disclose the amount of that grant.
The Maple Rapids resident could be sentenced to up to five years in prison and ordered to pay a $250,000 fine. He also could be ordered to pay restitution to HUD. Sentencing is set for May 20.
According to documents filed in U.S. District Court in Grand Rapids, Ortman was awarded a grant for facade improvements in 2008 for a building at Clinton and Walker streets in downtown St. Johns.
At the time, Ortman claimed the facade improvements would cost $416,999 and the project would create four permanent jobs for low- and moderate-income persons.
The grant was contingent on Ortman investing $216,999 of his own money in the project, with HUD funding the remaining $200,000. Ortman said he submitted false documents to make it appear as if his actual costs were more than $200,000, when they weren’t.
As a result, he received the full $200,000 from HUD when he should have received less than half that amount, prosecutors said.
In 2009, Ortman received a federal Rental Rehabilitation Grant to build apartments for income-qualified tenants in various buildings he owned in St. Johns. Ortman admitted submitting grant claims for work he did not complete and diverting that money to other business ventures that were in financial trouble. The apartments never were completed.
Both grants were administered by the city of St. Johns and the Michigan State Housing Development Authority.
St. Johns officials cooperated with federal authorities, providing documents and files pertaining to the investigation, City Attorney John Salemi said.
City officials declined further comment.
Ortman’s attorney, Jeffrey O’Hara, does not grant media interview requests, said a woman who answered the phone at his Grand Rapids office.
Ortman’s redevelopment projects have included the St. Johns Mint restaurant, a conference center at a former City Hall site and a vehicle storage facility in a former lumber storage building. He also revamped another former lumber yard building as a wellness center.
State Journal reporter Ken Palmer contributed to this report. |
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Wed Feb 26, 2014 9:49 pm |
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