Posted: 12:28 p.m. Sept. 8, 2010 | Updated: 2:21 p.m. today

http://www.freep.com/article/20100908/NEWS01/100908031/1001/NEWS/Kilpatrick-pal-Bobby-Ferguson-indicted-for-fraud-money-laundering

Bobby Ferguson, longtime pal of fallen Mayor Kwame Kilpatrick, was indicted this afternoon on charges of conspiracy, money laundering, mail fraud and other criminal offenses.

Ferguson, 41, whom Kilpatrick once tapped as the city’s cleanup czar, also was charged with improperly dumping tens of thousands of cubic yards of construction debris, soil and excavated materials at a public housing project. Moreover, Ferguson not only dumped hazardous waste on the project, the indictment alleges, but he also got paid $720,000 in public funds to move it from the housing site to an approved landfill.

The eight-count indictment, unsealed in federal court in Detroit, also named three Ferguson business associates and three of his alleged companies.

Named in the indictment were Ferguson, 41, of Detroit; Shakib Deria, 42, of Troy, Michael Woodhouse, 52, of West Bloomfield and Calvin L. Hall, 42, of Detroit.

The corporate defendants named are Ferguson Enterprises Inc., also known as Ferguson’s Enterprises Inc., XCEL Construction Services Inc., and A & F Environmental/Johnson Construction Services, all located in Detroit and allegedly owned by Ferguson.

According to the indictment, Ferguson obtained millions of dollars in public works contracts through fraud, false statements and bid collusion. The offenses took place as part of the Garden View Estates project, a multi-unit public housing development at the site of the former Herman Gardens in Detroit.

The indictment alleges that after XCEL Construction Services, Inc., obtained an $11.7-million contract to act as construction manager for the infrastructure phase of Garden View Estates, Ferguson illegally steered the primary contract to perform more than $9 million in demolition, earthwork and utilities work to another one of his companies called Ferguson Enterprises Inc.

In that deal, the indictment alleges that Ferguson made it look like the Garden View Estates contract was the result of a competitive bidding process, when in fact both companies were controlled by Ferguson.

Ferguson also is charged with recruiting and directing the owners of two other Michigan companies to submit false and fraudulently inflated bids to ensure that the bid submitted by Ferguson Enterprises Inc., which was itself inflated, would appear to be the low bid for the demolition work at the Garden View Estates project.

Ferguson, Woodhouse, Hall and XCEL Construction Services Inc. are also charged with conspiracy to launder millions of dollars in criminal proceeds through bank accounts of XCEL Construction Services Inc., which included the withdrawal of hundreds of thousands of dollars from accounts at First Independence Bank in Detroit.

Ferguson and Deria also are charged with conspiracy to violate the Bank Secrecy Act, which requires banks to file currency transaction reports any time a customer withdraws more than $10,000 in cash. To avoid that requirement, the indictment alleges, Ferguson and Deria made 19 sequential withdraws of $9,500 each to obtain $17,000 in cash from the bank account of another one of Ferguson’s companies, A&F Environmental/Johnson Construction Services.

The illegal dumping charges involve construction materials that Ferguson Enterprises generated while performing other jobs for the Detroit Water and Sewage Departments. Instead of disposing those materials, Ferguson and his company Ferguson Enterprises allegedly avoided hundreds of thousands of dollars in disposal feels by instead dumping truckloads of debris at the Garden View Estates.

It will cost the Department of Housing and Urban Development more than $1.2 million to remove and clean up the contamination, according to McQuade’s office.

Ferguson also is charged with a firearms possession after two semiautomatic pistols were found during a search of the offices at Ferguson Enterprises on Wyoming in Detroit.

Ferguson and Deria also are charged with providing false information to federal agents following the discovery of one of the firearms, a loaded Bryco .380-caliber pistol, that was found in a safe next to Ferguson’s desk in his office.

“The unsealing of this indictment marks a decisive step to end the era of fraud and corruption in publicly funded projects in the city of Detroit. Misuse of funds meant to provide safe and affordable public housing is simply intolerable,” McQuade said today in announcing the charges. She added, “We will use all available legal means to ensure that these defendants, and not the taxpayers, pay to correct and clean up the Garden View Estates project.”

Ferguson faces up to 20 years in prison if convicted on the most serious charges, and fines of over $2.5 million. His three companies each face corporate fines ranging between $1 million and more than $10 million.