News and Press Releases

Former City of Detroit Treasurer Jeffrey Beasley Indicted
for Taking Bribes and Kickbacks in Return for Approving
Investments by the Two City Pension Funds

FOR IMMEDIATE RELEASE
February 28, 2012

Former City of Detroit Treasurer Jeffrey Beasley, of Chicago, Illinois, was charged in an Indictment, unsealed today, with taking bribes and kickbacks in return for approving more than $200 million in investments by the two City of Detroit pension funds, United States Attorney Barbara L. McQuade announced today.

Joining McQuade in the announcement was FBI Special Agent in Charge Andrew G. Arena.

The Indictment charges that Beasley conspired with others to personally enrich himself and his co-conspirators by accepting bribes in the form of cash, travel, meals, golf clubs, drinks, gambling money, hotel stays, entertainment, Las Vegas concert tickets, massages, limousine service, private plane flights, and other things of value. These bribes to Beasley and his co-conspirators came from individuals who had business before the General Retirement System and the Police and Fire Retirement System of the City of Detroit.

As City Treasurer, Beasley was a member of the Boards of Trustees of the two pension systems, and he had a fiduciary responsibility to make decisions on investments pending before the Boards in the best interests of the retirees and beneficiaries. The two Detroit pension funds suffered more than
$84 million in losses from investments associated with Beasley's bribery conspiracy. The charges were set forth in an Indictment issued by a Detroit federal Grand Jury on January 18, 2012 that was unsealed today.

According to the six-count Indictment, between January 2006 and September 2008, when Beasley served on the Boards of Trustees of the two pension funds, he conspired with other individuals to defraud current and retired City of Detroit employees who contributed to the two pension funds. The Indictment alleges that Beasley deprived the employees of their right to honest services, including their right to Beasley's service as a pension fund Trustee, free of bribery and corruption. The Indictment details the manner in which Beasley and his co-conspirators demanded and accepted bribes and kickbacks from individuals who were seeking investment monies from the two pension funds or who otherwise had business before them. The Indictment alleges that Beasley personally received more than $100,000 in cash from people having business before the two pension funds. Another part of the scheme included demands by Beasley and others that individuals having business before the pension funds contribute tens of thousands of dollars to the Kilpatrick Civic Fund in order to receive approval for their investment requests.

Beasley also is charged in the Indictment with five counts of extortion or attempted extortion. The Indictment alleges that Beasley extorted more than $10,000 in cash from persons doing business before the two pension funds at a "birthday party" in his honor. Beasley demanded $250,000 from the owner of an investment company in exchange for Beasley's support of $44 million in investment funds from the two pension funds. Beasley demanded and received $20,000 from Marc Andre Cunningham, an aid to former Mayor Kwame Kilpatrick, who acted as a consultant for a communications company that received $30 million in investment funds from the two pension funds. Beasley and his co-conspirators demanded and received trips, private plane flights, and lavish entertainment from an investment manager of the Police and Fire Retirement System who managed more than $150 million in properties owned by the system.

If convicted, Beasley faces a maximum of twenty years in prison and a fine of up to $250,000 on each of the six counts of extortion, attempted extortion, and conspiracy to commit honest services mail and wire fraud. The Indictment also seeks forfeiture of more than $225,000 in unlawful payments received by Beasley and his co-conspirators in connection with his extortion and the conspiracy.

United States Attorney McQuade said, "Employees of the City of Detroit are entitled to honest services from the trustees of their pension funds. We will prosecute public officials who abuse their positions of trust to personally enrich themselves at the expense of the people they were intended to serve."

FBI Special Agent in Charge Andrew Arena said, "This is another example of a once trusted public official abusing their power for personal gain. The FBI remains dedicated to rooting out this type of corruption and reminding public officials they serve the citizens not themselves."


The case was investigated by agents of the FBI and the Internal Revenue Service. This case is being prosecuted by Assistant United States Attorneys Robert Cares and David A. Gardey.

An indictment is only a charge and is not evidence of guilt. It will be the government's burden to prove guilt beyond a reasonable doubt.

 

 

 

 

 

 

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