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Topic: corruption must end in Genesee County too!
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untanglingwebs
El Supremo

Still relevant discussion on the cost of greed and corruption



June 01, 2011 NEWS & VIEWS » POLITICS & PREJUDICES



Cost of corruption
Tackling the taboo topic: Graft must end in Detroit
By Jack Lessenberry
Detroit has a lot of problems, the biggest of which is that the city doesn't have nearly enough jobs or money. There's a lot else wrong too. But the city has one huge problem it badly needs to address, the very mention of which is widely regarded as taboo, especially from a white, middle-aged suburban dweller like me. But it needs to be said anyway.

Detroit is riddled with a culture of corruption.


I'm not talking about Mayor Dave Bing, who seems to be as honest as they come. And I am not talking about the mythical welfare queens, or some junkie who grabs a purse.

I am talking instead about so-called public servants; people with good elected or public service jobs who think this gives them some kind of entitlement to steal. Last week, for example, Mayor Bing fired Yvonne Anthony, director of the Department of Health and Wellness Promotion. Once allegations surfaced of misspending at the department, she began muttering about quitting, and the mayor prudently fired her and had her escorted from the building. Yes, nobody has charged her with anything. And it could be that she was only thinking about resigning to take care of her maiden aunt.

But I doubt it. Less than a week before that, the mayor suspended Shenetta Coleman, a Kwame Kilpatrick appointee who served as director of the Human Services Department. This came after the Detroit Free Press (hey, even the devil deserves praise for good works) revealed that the department spent more than $200,000 on fancy furniture last year, money that should have been spent helping a few of Detroit's thousands of desperately poor people.

Mayor Bing was so outraged he said he plans to recommend that Coleman and a number of her staffers get fired after the city finishes its investigation into what is assumed to be vast mismanagement of federal grant money.

Let's assume for a moment that the legal system works as it should, separates the guilty from the innocent and provides proper punishment for the bad guys. Regardless of that, the real question is: What were they thinking?

Why do so many Detroit officials, including the Monica Conyerses, Alonzo Bateses and, yes, Kwame Kilpatricks think selfish and corrupt behavior is OK?

Now I know that somebody is reading this and thinking, "Here's more thinly veiled racism from another phony white liberal in the suburbs." Some may say that even though some of these people were crooks, white folks outside Detroit have no right and no business criticizing them.

To all of which I say, bullshit. There have been many other cities and states that have had a culture of corruption, most notably perhaps Illinois, which has had three governors go to jail since the 1970s, plus Rod Blagojevich, who may wind up there yet. They also had a secretary of state named Paul Powell, who dropped dead in 1970, and whose house was found packed with vast sums of cash from a scam so effective that to this day, nobody is sure quite how he did it.

Every one of those criminals was white.

Yet in Detroit they are black, just like the vast majority of people. What's worse is that corrupt public officials in Detroit are primarily stealing from poor black people who can desperately not afford to lose the little they have.

Some sociologists have attributed this behavior to overcompensating for a legacy of slavery and repression. Well, even if true, nobody should accept that as an excuse. Unless, that is, you admire overcompensators like Lonnie Bates.

While on the school board, Lonnie was caught taking lavish trips at taxpayer expense to conferences in other countries, and then going to the beach. When asked how he could justify this, he said he thought it was inspiring for poor kids to see that one of their own could be a big man. Later, after being elected to City Council, he was convicted of putting nonexistent "ghost" employees on the city payroll, and was trundled off to prison.

All this might have been appallingly amusing if Detroit were flush with cash, but it is broke, and full of hungry children. Kilpatrick directly robbed the poor of the city of millions, thanks to his illegal attempt to cover up his tawdry sex life. How much more he cost Detroit indirectly because of his antics is impossible to measure. Yet there are those who admire that creature, now in a cell waiting for the feds to spend more taxpayers' money on further prosecution.

Detroit needs an attitude adjustment. Stealing from poor people is not heroic or classy. Taking money meant to feed people and buying fancy furniture for your office isn't striking back at the man. It is low-class, scumbag behavior.

Parasites like these may manage to do what generations of white racists failed to do: cost poor black Detroiters their rights. Every Kwame, every Lonnie, every Shenetta Coleman and Yvonne Anthony makes giving all power to an Emergency Financial Manager that much more certain and easy to do.

Don't like the thought of having an emergency manager for schools? Well, don't elect a school board president who can't really read or write, but who can and does masturbate in front of the superintendent. Demand accountability.

Kwame Kilpatrick had amply demonstrated he was unfit to be mayor by 2005. Yet Detroiters re-elected him over the decent, hard-working and grown-up Freman Hendrix.

Those who love this city need to develop a culture of swiftly condemning any stealing from the public purse, or any behavior guaranteed to put the city in a bad light.

Being responsible and grown-up is occasionally a good thing. Sadly, Detroit has had a run of public officials in recent years who behave as if the public exists mainly to provide them with sex, loot and a playground for both.

Detroiters can reject these clowns, angrily and utterly. Or they can look forward to being governed by Gov. Rick Snyder.

There's still a chance to make a choice.


Meanwhile, back at the bridge: Last week, I had a long conversation with Roy Norton, a high-ranking Canadian diplomat who recently became consul general in Detroit. He is primarily responsible for trade and immigration issues between Canada and Michigan, Ohio, Kentucky and Indiana. He made it clear in elegant and diplomatic language how essential a new bridge over the Detroit River is for our prosperity — and, also, how false are the claims made by Ambassador Bridge owner Matty Moroun and his latest mouthpiece, toe-suckin' Dick Morris.

Worst-case scenario, what are the risks to Michigan if the new bridge is built? "Nothing. Not a penny," said Norton.

I had intended to tell you more about what he said, but instead I want to share a letter from a truck driver who crosses the bridge daily: "Mr. Moroun is notorious in the trucking world as a cheap, penny-pinching owner who only wants to build his empire and wealth while paying wages far below industry standards and for busting unions ... it is hard for me to believe his bridge is still standing. The lanes were built for ... trailers common in 1929, but (trucks) are nowadays much wider ... imagine trying to squeeze a modern rig through the curves on those bridge approach ramps — not easy ...

"WE NEED A NEW BRIDGE."

Amen to that. Now, let's hope that a majority of the Legislature isn't too stupid or too corrupt to do the right thing.
Post Sun May 06, 2018 4:59 pm 
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untanglingwebs
El Supremo

FLINT NEEDS A DEFENDER! What has our city and county government kept hidden from us?

DEFENDERS
Defenders uncover documents state fought to keep secret in Detroit demolition corruption case
Documents are part of FBI investigation into possible corruption
By Kevin Dietz - Reporter, Derick Hutchinson
Posted: 11:24 PM, May 01, 2018
Updated: 11:24 PM, May 01, 2018
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DETROIT - The Local 4 Defenders have obtained never-before-seen emails, letters and depositions that are now part of the FBI investigation into possible corruption in Detroit's demolition program.

The state of Michigan spent millions of dollars on an audit that suggests bid rigging and collusion was taking place in Detroit. State officials turned it over to the FBI, but went to court to keep it from the public.

Documents that the state fought hard to keep secret have now been ordered released by a judge. The documents offer inside confirmation of a major criminal investigation and who knew what and when.

Michigan officials spent $2.5 million to audit the city of Detroit's demolition program in 2016. Rather than release the findings, the state agency monitoring the program's funding fought hard in court to keep them a secret, but the secret is out now that the FBI is interviewing cooperating witnesses such as demolition contractor Tim Drakeford.

Drakeford, who has been suspended from doing demolition work due to questionable practices, met with federal agents three separate times in the corruption probe.

READ: Secret witness for FBI speaks for first time about Detroit's demolition scandal

"Whatever you do in the darkness shall come to the light, and that is what is happening," Drakeford said. "It is all coming to fruition, full turn."

City and state officials said they are cooperating, but what they didn't do is make public the full audit that comes to the conclusion that evidence suggests bid rigging and collusion between the Detroit Land Bank and the Detroit Business Authority.

Activist Robert Davis first requested the audit in February 2017.


"I sent FOIA requests to the state, the city, the Land Bank and the Building Authority," Davis said. "All of them said no such document exists."

Davis sued, with taxpayers footing the bill for the state to fight turning over records. In December 2017, a judge ordered the release of meeting minutes that showed Mary Townley, who ran the state program monitoring federal money, met with Detroit Mayor Mike Duggan about the audit findings, and that the mayor then went to Chicago to meet with the treasury department.

"What stuck out was the fact that the mayor was intimately involved once the MHA and the state authorities revealed there was criminal activity taking place in the Detroit demolition program," Davis said.

The Davis lawsuit also turned over a letter from Townley to the U.S. Treasury. It's dated Sept. 30, 2016, and says there is an ongoing criminal investigation being conducted by the U.S. Attorney's Office and the FBI, and that the investigation thus far has focused on the Detroit Land Bank and Detroit Building Authority, rather than the contractors.

In February 2018, the judge ordered depositions. Townley testified she met with the FBI on 10 occasions. Finally, the state gave up, still insisting the document was not a completed audit and not subject to release through the Freedom of Information Act, but turning it over to Davis.

"The audit report, which they said didn't exist, now exists," Davis said.

Here are some of the items included in the report:

Dozens of examples of highly questionable billings.
Invitation-only meetings for contractors to discuss pricing.
Evidence of no-bid contracts.
Admissions of concealing price manipulations.
Inflating of invoices.
Evidence of bid rigging and collusion.
Davis said he thinks the court battle to keep the audit secret was a conspiracy.

"They didn't want to release the audit report during the election in Detroit because they didn't want to hurt the mayor of the city of Detroit," Davis said. "That's what this whole thing is all about."

City officials said that's ridiculous. They said they didn't release the audit because they didn't have it, insisting they have been transparent about mistakes they've made -- the reimbursement of $6.37 million, plus $2.5 million in investigative costs and how new procedures are now in place.

They pointed out that the federal program has awarded more than $100 million since the corrections were made.

"It is what it is," Drakeford said. "I'm cooperating. You can't hide it."

Drakeford, a demolition contractor, said after three meetings with the FBI, he knows the criminal investigation is serious. He said he's happy to cooperate as a witness to make sure the demolition program is run fair and square in Detroit.

"You're not hiding anything from the FBI?" Local 4 Defender Kevin Dietz asked.

"No," Drakeford said. "If they want to come in here and get everything, they're more than welcome."

Although neither city nor state officials would go on camera for an interview, both provided lengthy written statements.

Here is a statement from Detroit city spokesperson John Roach:

"The City has been completely transparent with its demolition program and has fully cooperated with every state and federal inquiry into the program.

"All of the issues raised in the MHA audit were addressed and resolved a year ago and detailed in two press conferences conducted by Mayor Duggan. The Land Bank and the State agreed on a financial settlement over disputed billings to the State and there was no finding of wrongdoing on the part of the City or the Land Bank. Since these issues were settled, the US Treasury Department has released another $132 million to Detroit’s demolition program to allow it to continue its work.

"The City could not release the MHA audit after it was completed because it was never provided with a copy until just recently, after the MHA released it in response to a FOIA request. Once the City received a copy of the audit we released it upon request."

*NOTE: The city of Detroit says Tim Drakeford is an unreliable witness because he's now banned from the demolition program for questionable practices.

Here is a Q&A response from Katie Bach, spokeswoman for the Michigan Homeowner Assistance Nonprofit Housing Corporation:

How much did the audit cost?

"The independent investigation cost $2.5 million and was reimbursed to the Michigan Homeowner Assistance Nonprofit Housing Corporation (MHA) by the Detroit Land Bank Authority as part of a settlement reached in June 2017."

Why did you not make public the full audit when you received it in August 2016 or when it was requested under FOIA in February 2017?

"There was no final 'audit report' completed. The MHA retained outside counsel to conduct an investigation into the expenditures by the Detroit Land Bank. In meeting minutes, and other discussions the investigation was sometimes referred to colloquially as an 'audit' but there was never an 'audit report' created. MHA received two updates on the investigation: one was a claims summary sheet and the other was a point-in-time Power Point presentation. The information was shared with federal agencies, and discussions began with the Detroit Land Bank to address the issues that were identified in the investigation. There was no final 'audit report' and/or 'forensic audit report' created. Also, we consistently maintained an exemption to the FOIA request while our investigation was ongoing."

Why did you go to trial to fight Robert Davis’s request for its release?

"There has been no trial. Mr. Davis filed a five-count complaint in November 2017; one count was related to whether Article 9, Section 23 of the Michigan Constitution required public inspection of a 'forensic audit report.' It is MHA’s position that no 'forensic audit report' was created, thus it could not be provided. During the course of the lawsuit, Mr. Davis was provided the claims summary sheet, and the Power Point presentation. It is my understanding that he was also provided the claims summary sheet in June 2017 in response to a FOIA request. Despite having been provided the information that he purportedly sought, Mr. Davis still has not dismissed the claim related to the 'forensic audit report.' The parties agreed to dismiss another count in the lawsuit, and the four other counts are the subject of a motion for summary disposition, which is still pending. The substantive positions of MHA with respect to the claim related to the 'forensic audit report' are set forth in the briefing filed in the Michigan Court of Claims."

What approximately did that cost taxpayers?

"This is covered as part of MHA’s routine Memorandum of Understanding (MOU) with the Attorney General’s office. The MOU is $150,538, and extends from Oct. 1, 2017, through Sept. 30, 2018. It covers court appearances and any other legal services, including the case with Mr. Davis."

What is your position on transparency in Government as it relates to fighting the release of the audit?

"While MHA is not subject to the Open Meetings Act, it has been subject to the FOIA since it was created by MSHDA to oversee the distribution of the Hardest Hit Funds in 2010. It follows the letter of the law when it comes to all FOIA requests.

"You have been quoted in the press that you do not believe there ever was any criminal activity in the Detroit demolition program yet your written communications clearly say you met with the FBI multiple times on this issue and that a criminal investigation is in progress – Can you explain the discrepancy and What is your current assessment of the investigation?

"MHA provides fiduciary oversight over all blight partners (like DLBA) using federal resources under the Hardest Hit Fund (HHF). MHA’s independent investigation of DLB was commissioned to find ineligible spending related to DLB’s administration of the HHF. Such investigation and findings require disclosure to federal enforcement agencies. We take that responsibility seriously and shared our findings as required. MHA is not responsible for making determinations and/or prosecuting any criminal wrongdoing."

How much money has the city paid back in total to date?

"As I mentioned previously, the Detroit Land Bank Authority has reimbursed MHA $6.37 million and paid an additional $2.5 million in investigation costs."
Post Sun May 06, 2018 6:33 pm 
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untanglingwebs
El Supremo

Detroit HUD officials usually monitor Flint in March and give a report in April. Not much has been revealed and HUD has been complicit in denying transparency by demanding exceptionally high costs for reports ($1200) Even the city fights disclosure. This administration is the worst in the lack of transparency.
Post Sun May 06, 2018 6:38 pm 
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untanglingwebs
El Supremo

Ryan LoRee is asking or a forensic audit of the Genesee County funds, especially senior millage, animal control and others. States the FBI is investigating some funds.

Bruce Stiers Everyone has had time to put the ducks here in a row. Well almost.
This issue begins with the Genesee Register of Deeds office being bilked of its budget to upgrade and update its equipment .
6 million dollars worth of misuse of funds missing prompted the original audit request that has yet to be authorized by those in charge of overseeing use of funds.
Post Wed May 09, 2018 8:12 am 
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untanglingwebs
El Supremo

Sally Haywood

I filed an (OIG) Office of Inspector General complaint about Operation Unification and in 2010 there was a whistleblower lawsuit filed against the City of Flint and Gregory Eason.(10-94994-CD -Yuille). Not only were the complaints filed about the Department of Energy Grant (later lost) but "starting in December, 2009, Plaintiff began complaining about certain irregularities in the administration of federal grant programs and contracts by the City of Flint"
Hud and the OIG regularly write on how to detect fraud and emphasize that there must be an annual risk assessment that went beyond a simple check off list.
In a report initiated in part by John Conyers , it stated that in the years 2009 to 2013, Flint "saw the most drastic workforce reduction". A 44% staffing cut was said cost the grants office a loss of critical staff created "gap sin institutional knowledge" and "contributed to compliance problems".However the Whistleblowers were four experienced Program Managers.
The OIG deserves some of the blame for the resulting lawsuits and, Smith Village issues. They sent new OIG person and a FBI agent that did not understand HUD. While I can understand the poor FBI guy as HUD speak can be difficult, I will not excuse the action of the OIG. She spent her time trying the technique that is meant to defuse a complaint. Funny how if I had lied to the FBI I would have committed a crime, but she didn't understand that lying on a federal application is also a crime.
Charles Young Jr. bragged about his companies, the SDE Entities. A simple computer search brought up a lawsuit in the Oakland county Court that was transferred to the U. S. District Court Eastern District of Michigan Southern Division. The case filed on March 11, 2010 (prior to Smith Village) was entitled (Steinberg v. Young) .Earle Steinberg , Plaintiff, v. Charles Young Et Al.. Defendants.
Young owned all or in part the three entities that comprised the SDE Entities. He defaulted on an employment contract with Steinberg and Steinberg went to arbitration where he wo a $1,049,57.45 judgement. Upon winning the arbitration,Steinberg filed a motion in the Oakland Court to confirm the judgement on 2-11,2009. and was successful on 2-18,2009.
Allegations arose that Young transferred funds and real property among and between the SDE entities, of which Operation Unification became part of the SDE entities to which Young admitted calling it "robbing Peter to pay Paul" At one hearing a list of 49 properties in the Flint area were shown,a number of which were LLCs. Allegedly this was to conceal assets and prevent collection.
The case was moved to Federal Court by the intervention of JP Morgan Chase Bank who was still owed $2.6 million and had liens against all of the Operation Unification properties.
Flint still awarded contracts to Operation Unification. Had the looked at OU Homes and OU Village, they would have seen that these two were for profits and the OU entities had an interlocking directorate. Efforts were made to legitimize Operation Unification , but by 2013 (after 2 Smith Village lawsuits) the City of flint filed a lawsuit against the non-profit. The allegations included using the federal NSP money for projects other that the 12 houses under contract, failure to rehabilitate the homes per the contract terms and failure tomake an accounting.
Genesee County also filed a lawsuit ..
Post Tue May 15, 2018 3:50 pm 
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untanglingwebs
El Supremo

Also Operation Unification owed property taxes from 2008.

HUd allows for profits to loan employees to a nonprofit if they have a written agreement however the for profit cannot be a housing or housing rental organization. Young was the CEO of all 3 Operation Unification entities. Housing was not the original application but was added by resolution. . In addition the community service attributed to Operation Unification was actually performed by the for profits.
Manage

Young never showed a 990 IRS form but the City could have gotten it through Guidestar or Foundation Finder. Both the city and the county used a letter from an accountant who was a former employee of SDE-BPand a former Board member. The letter was not notarized as required and stated he performed only documents for tax purposes.
Post Tue May 15, 2018 4:18 pm 
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untanglingwebs
El Supremo

Consumers Energy sued the Operation Unification entities Young, Lela McGee Johnson and Joann Barnes over huge unpaid bills and the stealing of power and fought th 2013 bankruptcy of Young. The Genesee County Treasurer and the City both fought the dismissal of monies owed them.. Young paidhis attorney with some entity called Young's Properties. No clue as to what this entity is, but OU Homes once claimed 160 storage units.

Before declaring bankruptcy in 2013, Young revised all of the OU entities and eliminated some. Consumers untangled many of the pieces. When the state revised their LARA corporate lookup, much of the older OU data was lost. (glad I made copies of the originals.) Operation Unification reinvented itself in 2009.

Yet entities like Vernon Chapel Church held press conferences for him a and placed him on their economic development board. He was also on the board of North Flint Economic Board.
Post Wed May 16, 2018 11:07 am 
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untanglingwebs
El Supremo

Because there was little or no media attention that detailed the problems of Operation Unification, a honest and spiritual business woman attempted to rent a location from Young and Johnson, She was never given the keys to th building and was refused a refund. It too a long time to win the law suit, but she hasn't seen any money yet. The loss of that money as well as a loss of a business opportunity have sorely impacted her life.
Post Wed May 16, 2018 11:14 am 
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untanglingwebs
El Supremo

Poor oversight of the NSP HUD program and both Flint and Genesee County were on the hook for over $500,000 each with Operation Unification.
Post Wed May 16, 2018 12:26 pm 
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untanglingwebs
El Supremo

Consumers Energy filed a lawsuit against Operation Unification Inc., Charles Young Jr., Village Food Services, Lela Johnson, and Joanne Burks.on 3-1-2013. (13-100007 C- Yuille) Charles Young filed Chapter 11 Bankruptcy on himself only.

9. Charles Young was the principal shareholder and manager of OU Homes Inc.a dissolved Michigan Corporation. OU Homes Ic. owned and rented commercial properties.

10. OU Homes,Inc. incurred large utility bills for gas and electric service which have not been paid. In addition, Consumers Energy Co. investigators found theft of energy services at numerous properties owned by OU Homes, Inc.for which Operation Unification, Inc. is liable.

11. At the request of Defendant Charles Young, on April 2, 2010, Consumers Energy Co. provided an itemized statement showing money owed by OU Homes, Inc.
Post Thu May 17, 2018 3:38 pm 
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untanglingwebs
El Supremo

12. After discussions with Defendant Charles Young, and by agreement, certain bills owed by OU Homes, Inc., were transferred to Operation Unification, Inc..

13. Defendant Charles Young further requested that other service in the name of OU Homes, Inc., be transferred to Defendant's Village Shore Properties, Inc and Joanne Burks and also Village Food Services and lela Johnson.

14. Consumers Energy agreed to the transfers requested by the Defendant also represented that Consumers Energy Co. would receive payment of $10,000 a month until all outstanding bills were paid in full, when the transfer swere completed.despite repeated demands.

15. Defendants have failed to make payment as promised
Post Thu May 17, 2018 3:58 pm 
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untanglingwebs
El Supremo

16. The Michigan Public Services Commission Rules provide that when Consumers Energy metering equipment has been tampered with, or when fraudulent or unauthorized use of gas or electricity has occurred, a rebuttable presumption arises that the customer has benefitted by such fraudulent or unauthorized use or tampering. Therefore the customer is responsible for payment of the reasonable cost of service used during the period of such fraudulent or unauthorized use or tampering occurred,or is reasonably assumed to have occurred, and is responsible for the cost of field calls and making repairs.

17. A review of Consumers Energy records show that Defendants have received the benefit of at least $92,704.20 forgas and electric service which has not been paid for despite repeated demands.

18. Plaintiff has incurred at least $5,000.00 in investigative costs and is entitled to recover those costsunder the Michigan Public ServicesCommission Rules.
Post Thu May 17, 2018 4:11 pm 
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untanglingwebs
El Supremo

COUNT 1-BREACH OF CONTRACT

COUNT II- FRAUD IN THE INDUCEMENT AND FRAUD IN THE PERFORMANCE

26. Defendants Operation Unification, Inc,and Village Food Services, Inc. have the same members, officers and directors, and businesses as the defunct entities Operation Unification Homes,Ind. and village Shores Properties, Inc. and Defendants Charles Young, Lela johnson and Joanne burks have used these and other corporate entities to perpetrate a fraud upon Plaintiff in order to obtain utility services and avoid payment for such services.

27. The individual Defendant charles Young was involved in obtaining electric and gas service for the corporate entities and gave assurances that obligations incurred by these Defendants would be satisfied and paid in full.

28. The corporate Defendants and the dissolved corporations have a common management and business purposes, properties, operations, customers, supervision and ownership.
Post Thu May 17, 2018 4:28 pm 
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untanglingwebs
El Supremo

29. On information and belief, at the time of entering into the contract for utility service with Consumers, the corporate Defendants andd the dissolved corporation were undercapitalized, rendering them unable to meet their obligations.

30. Adherence to the fiction of separate corporation existence would sanction a fraud

COUNT III - CONVERSIONS UNDER MCL 600.2919a

38. Defendants requested the Plaintiff to turn on the electric and gas service at the meters provided and located on the premises owned and controlled by the Defendants. Defendants have received such services and have continuously and steadfastly refused to pay for the electric and gas services, constituting theft of energy services.

39. Defendants have repeatedly improperly and without authorization, restored utility service after service has been discontinued by Plaintiff because of non-payment and unauthorized use, constituting theft of energy services.
Post Thu May 17, 2018 4:45 pm 
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untanglingwebs
El Supremo

Under MCL 600.2919(a) Consumers requested 3 times the amount of actual damages plus costs and reasonable attorney fees of at least $298,112.60
Post Thu May 17, 2018 4:48 pm 
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