Former Airport Official Convicted in Record Setting Bribe and Kickback Scheme
A jury convicted a former Wayne County Airport official on ten counts of conspiracy, federal program bribery, federal program theft, money laundering and obstruction of justice, in connection with maintenance and repair contracts for runways and parking structures at Detroit Metropolitan Airport, United States Attorney Matthew Schneider announced today.
Schneider was joined in the announcement by Timothy R. Slater, Special Agent-in-Charge of the Detroit Field Office of the Federal Bureau of Investigation, and Andrea M. Kropf, DOT-OIG Regional Special Agent-In-Charge of the Midwestern Region of the United States Department of Transportation, Office of Inspector General.
Convicted was James Warner, 52, of Commerce Township.
The jury deliberated approximately three hours concluding the three-week trial before United States District Judge Victoria Roberts.
According to the evidence provided during trial, from May of 2010, through August of 2014, while employed as a field inspector at the Wayne County Airport Authority (WCAA), Warner engaged in multiple schemes to defraud the WCAA out of millions of dollars. In one scheme, Warner drafted and submitted fraudulently-inflated invoices for work which co-defendant William Pritula, 69, of Romulus, was contracted to perform at the airport. Upon payment by the WCAA to Pritula, Pritula would kickback roughly half of the profits to Warner—a total of over $5 million over four years—the largest bribe prosecuted to date in the Eastern District of Michigan.
In another scheme, Warner drafted and submitted fraudulent invoices on behalf of co-defendant Douglas Earles, 60, of White Late, the owner and operator of North Star Plumbing. In the invoices Warner wrote, he billed the airport for industrial-sized plumbing fixtures which Earles never installed. In exchange, Earles would kickback roughly 40 percent of the profits to Warner--over $100,000 between June of 2010, and August of 2013.
In yet a third conspiracy, Warner demanded money from co-defendant Gary Tenaglia, 65, of Oakland Township. Tenaglia held maintenance and repair contracts for Detroit Metropolitan Airport’s parking structures. Warner both inspected and supervised Tenaglia’s work and concealed any mistakes from the WCAA. In exchange, Warner demanded approximately 10 per cent of each invoice from Tenaglia. In total, Warner paid Tenaglia hundreds of thousands of dollars between May of 2011, and June of 2014. Thus far in the investigation, law enforcement has seized $11.4 million in criminal proceeds including $7.5 million from Pritula and $3.9 million from Warner.
Pritula, Earles, and Tenaglia have been convicted of conspiracy to commit bribery and theft.
Warner left the WCAA in August of 2014. In January of 2017, he began working for the Water and Sewer Department in West Bloomfield Township. Within months, Warner proposed to Tenaglia a continuation of the same scheme the two had at the airport—a demand for 10 percent of each invoice West Bloomfield Township paid Tenaglia.
In addition to the theft, bribery and money laundering offenses, the jury convicted Warner with obstructing justice by altering a document he provided to the FBI during their investigation of this matter.
In total, based on his convictions, Warner is facing a sentencing guidelines range of 292 to 365 months in prison.
United States Attorney Schneider stated, “Today’s conviction reinforces our dedication to prosecuting corrupt public officials who put their own greed over the best interests of the public. This is certainly true here, where the defendant showed little concern for the infrastructure of our very own airport.”
Special Agent-in-Charge Slater stated, "The broad scope of Mr. Warner's crimes demonstrates a profound misappropriation of the public trust. Citizens of the Eastern District deserve integrity and accountability from the officials charged with the operation of all public facilities, including Detroit Metropolitan International Airport. Today's verdict underscores our commitment to holding these officials accountable. I am proud of our investigators and our partners at the Chicago Field Office of the U.S. Department of Transportation, Office of Inspector General, whose collective efforts helped achieve it."
“Today’s conviction of James Warner, whose blatant disregard for his fiduciary responsibility to properly steward taxpayer dollars, sends a clear signal that such gross violations of public trust will not be tolerated,” stated Andrea M. Kropf, DOT-OIG Regional Special Agent-In-Charge. “The professionalism and dedication of the collective law enforcement and prosecutorial team involved in this case is a testament to an effective criminal justice system working tirelessly to protect the taxpayers’ investment in our nation’s infrastructure from fraud and abuse.”
Each theft and bribery charge carries a maximum sentence of 10 years’ imprisonment and a fine of $250,000. Each of the money laundering conspiracy counts carries a maximum sentence of 10 years’ imprisonment and a fine of $250,000. The bribery and theft conspiracy counts carry a maximum sentence of 5 years’ imprisonment and a fine of $250,000. The obstruction of justice count carries a maximum sentence of 20 years’ imprisonment and a fine of $250,000.
A sentencing date has been set for October 8, 2019.
The investigation of this case was conducted by the Federal Bureau of Investigation and the Department of Transportation. The case is being prosecuted by Assistant U.S. Attorneys Eaton P. Brown and Mark Chutkow.