How the Feds waste your tax dollars bilking you of more tax dollars
Note: This includes information gleaned from testimony in the trial, USA vs Higgins. It is not about the case. This story is about how the government spent a few million, to bilk tax payers with a scheme centered around a dishonorably discharged Army veteran and a fake business they set up.
Michael E. Marshall said “I’m a great businessman” on the stand when cross examined by the defendants attorney, Tamara Sack. The reality couldn’t be further from the truth. Mike Marshall had no problem telling people like a former Dayton Daily News reporter and friend of mine, that he was working as a Confidential Human Source for the FBI. Rule number one of being an informant, don’t tell anyone you are an informant. The Esrati report quickly identified Marshall as a CHS soon after the original public indictment on April 30, 2019, where the FBI, the DOJ and the Ohio Attorney General lined up to announce that 4 Black men were the first round of indictments in the “Culture of Corruption” investigation, later called “Operation Demolished Integrity.”
It turns out, the only integrity that was demolished would be the FBI, the Ohio Attorney Generals and the bumbling AUSA’s of the Department of Justice.
I filed a Freedom of Information Act (FOIA) request 2 weeks ago through the FBI’s absolutely horrible FOIA web portal. So far, I’ve not even received an acknowledgement or receipt. The Government seems to think it is ok to obfuscate the process by allowing every federal agency to make their own portal, with their own procedures, to make the public’s right to know their right to say no. My request was to find out how much the government spent paying their CHS’s. Well now, we know.
On the stand, the Feds asked Marshall if he was a CHS and told us that they’d paid him $33,000 over a few years for what Marshall defines as about 1500 hours work. What that work was, was a total and complete waste of our tax dollars.
It turns out that our “Great businessman” started a government fronted demolition company: “United Demolition and Site Management” on Oct 17, 2013, with offices that the FBI subsidized the rent for, in the 130 W. Second Street building, right next to the Federal Court House and the AUSA’s offices. This was probably because the AUSA’s were trying to manage this investigation without having to get in their cars to drive to their sting operations office. AUSA Brent Tabacchi- a rumple suited attorney was complaining of “trial fatigue” on his third day of court, which was the 4th day since a “court emergency” delayed it a day.
United Demo was set up, to somehow compete with Steve Rauch Inc, the local demolition czar of Dayton Ohio, and to somehow indict him/his business for paying politicians for the right to overcharge for the destruction of Dayton neighborhoods. So far, the Feds have failed to do anything except fine Rauch $15,000:
The demolition and trucking company owned by Steve Rauch, 65, of Germantown was sentenced Thursday in U.S. District Court to pay a fine of $15,000.
The company, Steve Rauch Inc. of Dayton, pleaded guilty last year to one felony count of conspiracy to engage in mail fraud in a deal that led federal prosecutors to dismiss charges against Rauch.
U.S. District Court Judge Thomas M. Rose did not sentence the company to probation or restitution but levied a $400 mandatory assessment in addition to the fine.
The maximum penalty the company faced was one to five years of probation and a fine of not more than $500,000.
Company attorney, Chad Ziepfel, argued against probation, saying the federal government had already put Steve Rauch Inc. on its suspension list for federally funded contracts and is expected to begin debarment proceedings now that the case has concluded.
Ziepfel said if the company were on probation during those proceedings it could be more likely that it would be debarred and prohibited from working on projects that get federal funding.
“Debarment would be virtually catastrophic,” Ziepfel said, and likely result in lost jobs at the company.
Source: Dayton area company fined $15,000 for conspiracy to engage in mail fraud
The original founder was Marshall, who recruited his former Rauch co-worker, Michael Scott Waters to also be a CHS. Waters was paid approximately, $13,000 for “hundreds of hours” of work for the Feds. When the defense asked Waters what kind of businessman Marshall was, his answer was “He has some peculiar business practices” which may have been the understatement of the case.
Marshall, had worked for Rauch in some capacity. He’d also had a company called “Drywall Wizard” that had horrible reviews and a bad reputation. He had absolute recall on every single piece of FBI evidence, but, couldn’t recall so much other stuff it would make you think he’s senile. He wrote a check to someone named Gary Clemmens, but had no idea who he was. He did really well at saying two things on the stand, “I recorded every interaction with Brian Higgins (except the very first meeting) and that he was willing to lie to the insurance company and the mortgage company non-stop in facilitating the investigation- ostensibly at the behest of his Federal handlers. After all, they were paying him and had set up this sham company to catch criminals.
The firm had five employees from what we heard, and oddly, five people were signatories on the 5/3rd bank account for the business. Tony Sullivan was an attorney, with offices in the same building, who was suspended from the practice of law in 2020 by the Ohio Supreme Court, Dan Fyte (Fite, sp?), Marshall and Waters. The fifth? Not sure.
What the grand plan was for United Demolition, which as of 5/4/2020 was still sort of in business, bilking folks out of money with shoddy workmanship:
Job incomplete, roof leaks and supplies and trash left everywhere and they were paid 100%. This is the 2nd company to take our money and not complete the job of our barn roof that was damaged in a storm. This company came and sat in our kitchen and apologized for the 1st company and promised us they would get the job done. A check was wrote on 12/28 for 1/2 the roof in the amount of $5,832.81 and they were going to start work it is now 5/2 and the roof is not complete, trash and old metal was left and blown everywhere and the roof leaks. My granddaughter is helping with this matter as we are elderly and not computer savvy. My granddaughter as called this company several times and been told they will be done for the last month and still nobody has shown up. She contacted the company last week and said since you haven’t showed up she was going to pick up all the metal and trash but they still needed to finish the job not to mention look at the roof because they did a horrible job on what has been completed. **** ******** apologized and thanked her and said he would be down to look at everything and it’s been a week and he still hasn’t showed up.
Desired Outcome I would like for the roof to be repaired quickly the right way so there are no leaks and the wind can’t rip the entire roof off because it’s not properly installed or connected.
Source: United Demolition Excavation & Site Management Company, LLC | Complaints | Better Business Bureau® Profile
But, that’s only the latest report of problems at the FBI’s little demolition company, the City of Dayton awarded them contracts in 2015 and 2016, which they failed:
The company, United Demolition Excavation and Site Management, which is based in Dayton, was not paid the full $371,267 it was awarded in demolition contracts in 2015 and 2016, because the city terminated at least one contract citing “numerous breaches,” including incomplete work, illegal dumping at two sites, improper use of fill and damage caused to adjoining properties, according to a court affidavit from a city employee.
Source: Dayton corruption investigation: Business hired despite red flags
The article goes on to say:
The investigation found that the city selected United Demolition for contracts even though the company had “unfavorable” reference checks from local municipalities, landfills, equipment-rental companies and subcontractors, city of Dayton records show.
The city awarded United Demolition one contract even though city staff raised concerns about the company’s capacity and difficulty completing projects on time….
Numerous court judgments have been rendered against United Demolition and owner Michael Marshall from subcontractors, small business owners, lenders and equipment-rental companies and others who claim they are owed tens of thousands of dollars.
“The city paid United Demolition, but I didn’t get a penny,” said Arthur Partin, owner of Partin Trucking Inc. His company obtained a $52,869 judgment against United Demolition for unpaid work….
In a Jan. 15, 2015 memo, Michael Cromartie, who was then-acting director of Dayton’s building services department, wrote that the city did reference checks of United Demolition with area cities, landfills, equipment rental agencies and subcontractors, and “none of the references reported a favorable recommendation.”
Then on March 4, 2015, the city awarded a contract to a different firm, Bladecutters Inc., to demolish about a dozen residences even though United Demolition submitted the lowest bid for the project. United Demolition’s bid was about $493 cheaper than Bladecutters’, city records show….
On June 8, 2016, the city of Dayton also awarded United Demolition a $247,587 contract to tear down about 13 commercial buildings.
United Demolition won that contract even though a different company, associated with local demolition contractor Steve R. Rauch, had submitted a bid that was about $9,000 less, according to city records.
City staff recommended Steve R. Rauch not receive the contract because of “unfavorable past practices on multiple contracts,” according to a May 2016 memo from Aaron Sorrell, then-Dayton’s director of planning and community development.
The city terminated four contracts with Rauch for problems that included the allegation that the company’s workers used improper fill materials after demolition, this newspaper has previously reported…
United Demolition has also been the subject of a variety of lawsuits and legal complaints that alleged the company breached contracts and failed to pay subcontrators, rental companies and creditors. Most of the suits in Montgomery County led to financial judgments that were never or only partially paid.
Dayton pawn shop owner Mark Gordon claimed that after he helped arrange a $15,000 loan to Marshall and United Demolition in mid-2014 he had to wait more than four years to get about $7,500 back, court records show.
Marshall indicated that he borrowed the money so he could acquire dump trucks to complete a contract for his company, according to court documents.
Gordon’s legal complaint claimed that “Marshall for a long period of time has engaged in an intentional series of financial misdeeds which have had the operative effect of defrauding his suppliers, vendors and creditors.” The complaint says there have been multiple judgments against Marshall that he has no intention of paying.
Marshall and United Demolition obtained contracts, pocketed the money and did not pay subcontractors who performed work for the projects, said Larry Lasky, a real estate and collections attorney who represented Gordon.
“The guy has ruined and destroyed a lot of people — a lot of good people who are trying to make a living in Dayton, Ohio, which is a very tough place to make a living,” Lasky said.
Gordon was repaid after filing a financial attachment with the city for the money it held back from United Demolition for unfinished work.
Other companies say they have never been repaid.
Maybe, the real criminals in this case are the FBI and the DOJ, who set up a con-man, to run a con business, that bilked the corrupt city for a third of a million, and more than a few other taxpayers- for shoddy work and unpaid bills.
To cover up the Feds culpability in this major clusterduck of an investigation, the Court has made decisions to keep critical information from the jury so far. Defense lawyers haven’t asked the government’s witnesses about any of the above facts- other than that Marshall and Waters were paid and their rent was subsidized.
Unless a slew of new indictments are filed immediately following this cases closure, where the absolute loser Mike Marshall is the star witness, all of this taxpayer funded fishing expedition was a waste of tax dollars.
The taxpayers of the City of Dayton should be made whole for their money that was wasted contracting with the FBI, the other businesses like Gordon’s Pawn Shop and Partin Trucking should be paid. And even Bladecutters should have a claim- for lost revenue due to the imposition of this criminal enterprise backed by the FBI.
Never mind, Kent Development, a former client of mine, who was frozen out of the demolition contracts in the City of Dayton, despite having a firm that only hired x-cons, and tore down housing in a way that minimized landfill use and recycled as much of the material as possible.
The most heinous crime committed by the FBI, which has also been covered here at depth, was allowing Commissioner Joey Williams to stand for re-election when they had already turned him into a CHS- and had him recording conversations from 2015 forward. They had an agreement, that should he win, he’d step down, still not revealing his crimes, until the day his youngest son graduated from high school- Apr 30, 2019. That action cost Darryl Fairchild a lot of money (and all his donors a lot of money) paying to run again, just a few months after he came in third in a race, where the winner- Williams, should never have been in.
If you wonder why people no longer trust the government, now you know.