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Press Release

Former Wayne County Assistant County Executive Pleads Guilty To Honest Services Fraud

For Immediate Release
U.S. Attorney's Office, Eastern District of Michigan

Former Wayne County Assistant County Executive Michael Demetrus Grundy, of Detroit, Michigan, pleaded guilty today to Conspiracy to Commit Honest Services Wire Fraud 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 were Special Agent in Charge Robert D. Foley, III, Federal Bureau of Investigation and Special Agent in Charge Erick Martinez, Internal Revenue Service, Criminal Investigation.

According to court records, on October 19, 2011, Grundy caused the accountant of HealthChoice to wire transfer $400,000.00 to a company called 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 actually not executed until October of 2011, and it was not approved by the HealthChoice Board of Trustees.  Further, Medtrix never created or obtained any EMR programming, and an EMR system that was developed by another company was already being offered to HealthChoice networks and medical providers. 

Co-conspirator Keith Griffin pleaded guilty on May 10, 2012 to the wire fraud scheme.  He admitted that Grundy used his position as Executive Director of HealthChoice to authorize fraudulent payments to Medtrix and Advertise Me (also owned by Griffin), and that Griffin kicked back substantial portions of those payments to Grundy. In his plea agreement, Grundy admits that he was receiving kickbacks of funds that were supposed to be used for the benefit of the participants of HealthChoice insurance programs.

Grundy faces a maximum of twenty years in prison, a fine of up to $250,000, and forfeiture of the unlawful payments he received.

United States Attorney McQuade said, "The citizens of Wayne County deserve honest services from their public officials.  It is particularly offensive when corruption comes from officials entrusted to promote health and welfare.  We will continue to prosecute public officials who enrich themselves instead of serve the people.”

FBI Special Agent in Charge Robert D. Foley III 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."

"Grundy abused his powers by utilizing his positions to discreetly conduct illegal activities and receive kickbacks," said IRS-CI Special Agent in Charge Erick Martinez. "IRS-CI is committed to following the money trail to ensure that public officials who use their office to line their own pockets are brought to justice and deprived of their ill-gotten gains."

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

Updated March 19, 2015