News and Press Releases

Former Wayne County Assistant County Executive
Indicted for Receiving Kickbacks and Extortion

March 7, 2012

Former Wayne County Assistant County Executive Michael Demetrus Grundy, of Detroit, was charged in an Indictment with receiving kickbacks and extortion in connection with his position as Executive Director of HealthChoice of Michigan, United States Attorney Barbara L. McQuade announced today.

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

According to the 25-count Indictment, Michael Grundy conspired to personally enrich himself and his longtime friend, Keith Griffin, by bilking HealthChoice, also called Wayne County HealthChoice.

In March of 2009, Griffin incorporated Advertise Me LLC in Michigan. Thereafter, from April 2009 until October 2011, Griffin invoiced HealthChoice for more than $1,000,000.00, purportedly for advertising and services rendered by Advertise Me, when in fact the invoices were inflated and Grundy received a kickback from HealthChoice's payments to Advertise Me.

In April 2010, Griffin incorporated Medtrix LLC in Michigan. On October 19, 2011, Grundy caused the accountant of HealthChoice to wire transfer $400,000.00 to Medtrix, falsely representing that the payment was pursuant to a contract between HealthChoice and Medtrix executed on March 1, 2011 for Medtrix to develop and implement an electronic medical records ("EMR") system for HealthChoice medical providers.

However, the contract was not actually executed until October of 2011, and it was not approved by the HealthChoice Board of Trustees. Further, an EMR system that was developed by another company was already being offered to HealthChoice networks and medical providers.

The indictment also charges that Grundy used his positions with the County and HealthChoice to enrich himself and Griffin by using deception and fear to extort a company that had contracts with HealthChoice. The company sent more than $150,000.00 to Advertise Me in 2010 and 2011 at the instruction of Grundy, who told the company's principal to pay for HealthChoice advertising. In actuality, Griffin used
the funds sent by the company to write checks to payees of Grundy's choosing.

In 2011, Grundy instructed the principal of the company to pay $560,000.00 to Medtrix, allegedly for EMR programming that the company could use to improve its chances of earning a contract to provide medical services to jail inmates. In compliance with Grundy's instructions, the company sent a total of $350,000 to Medtrix for an EMR program. However, Medtrix never created or obtained any EMR programming, and the payments that the company made to Medtrix were used for Grundy's and Griffin's
personal use and benefit.

The final count of the indictment alleges that Grundy conspired to obstruct justice by attempting to mislead federal investigators after subpoenas were served on Wayne County on October 19, 2011.

If convicted, Grundy faces a maximum of twenty years in prison and a fine of up to $250,000 on each count. The Indictment also seeks forfeiture of the unlawful payments received by Grundy.

United States Attorney McQuade said, "This case is another example that those who obstruct justice will be charged not only for their acts of corruption, but also for the cover-up. I hope that these charges encourage others to cooperate with the FBI in this investigation."

FBI Special Agent in Charge Andrew Arena said, "We will aggressively pursue public officials like Michael Grundy who are charged with promoting the health and welfare of our citizens, but who instead corruptly use their positions of power for self-gain."

The case was investigated by agents of the FBI. This case is being prosecuted by Assistant United States Attorneys Elizabeth A. Stafford, Kathryn McCarthy and Gjon Juncaj.









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