Michigan Town Supervisor Sentenced to Three Years in Prison For Conspiring to Defraud HUD

William Morgan, the former supervisor of Royal Oak Township, a suburb of Detroit, was sentenced in federal court to three years in prison. Mr. Morgan had previously entered a guilty plea to charges that he conspired to defraud the U.S. Department of Housing and Urban Development (HUD), violate the Clean Air Act’s asbestos requirements, and commit bribery. Asbestos is a mineral fiber that has been used commonly in a variety of building construction materials. When asbestos-containing materials are damaged or disturbed by repair, remodeling or demolition activities, microscopic fibers become airborne and can be inhaled into the lungs, where they can cause serious health problems.

"It is reprehensible that a public official made asbestos abatement decisions based on a bribe, not on what was needed to protect the health of the community,” said Randall Ashe, special agent in charge of EPA’s criminal enforcement program in Michigan. “The sentence shows that government officials who attempt to line their pockets rather than carry out their responsibilities honestly will be prosecuted to the full extent to the law.”

“Any public official, in city or suburb, who works to enrich himself at the expense of the public will be detected and prosecuted,” U.S. Attorney Barbara L. McQuade said. “It is particularly disturbing when an official not only takes bribes but also endangers community health and the environment by allowing the bribes to influence abatement decisions.”

Morgan’s criminal conduct involved the awarding of a contract and distribution of federal funds that were intended to be used by communities for the improvement of blighted areas by removing dilapidated buildings. The funding was received through HUD’s Neighborhood Stabilization Program (NSP). Morgan, in addition to being Township supervisor, was also Royal Oak’s coordinator for NSP.

Prior to the awarding of the contract, Morgan had received a $10,000 bribe from Sureguard/PBM, one of the companies that submitted a bid for the demolition and asbestos removal of an abandoned theater on Eight Mile road. In return for the bribe, Morgan attempted to steer the contract to Sureguard/PBM. Despite Morgan’s efforts, Royal Oak’s Board of Supervisors awarded the contract to another company, which had submitted a lower bid.

During the demolition process, Morgan asked for and received cash payments of $500 and $1,000 from the owner of the company that had won the contract. Morgan received these payments under the belief that they were in return for his approval of a change order covering the asbestos abatement that fraudulently inflated the cost of the work.

One of Morgan’s co-conspirators, Terrance Parker, received a sentence of 21 months. Two other co-conspirators, Kendrick Covington and Marcus Brown have yet to be sentenced.

The case was investigated by special agents of the Federal Bureau of Investigation (FBI), HUD’s Office of the Inspector General and EPA’s Criminal Investigation Division.

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