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Sterling Employment Law

A Detroit whistleblower reports an excavation company's fraud

The director of special projects for the Detroit Building Authority (DBA) issued a statement acknowledging that a worker with the Detroit-based Gayanga Co. stepped forward on March 12 to let them know of a potential case of fraud on their employers' part.

In speaking with city officials, the demolition company employee outlined six instances in which he suspects that his employer failed to fully excavate work sites as they were contracted to do. He said that he believes that they left behind masonry and concrete from the basement and then simply backfilled dirt into those sites.

If this were confirmed to be true, this would go against the contract that the company had signed with the city as it requires them to remove all excavation debris before attempting to fill the sites. The city is still investigating the matter. They haven't yet issued a stop-work order.

The DBA spokesperson noted that this isn't the first time that a worker with a demolition company has stepped forward to report alleged fraud though. Just last month, an employee with McDonagh Demolition, another excavation company hired by the city of Detroit, became a whistleblower when he came forward to report they had done the same thing as Gayanga Co.

He noted that his employer repeatedly failed to adequately remove debris from sites before filling them in with soil. In his employer's case, their alleged fraud resulted in a stop-work order being issued by the DBA. Ultimately their $17 million contract was terminated.

Another previous company, DMC Consultants, filled in its assigned work sites with an unapproved soil. City officials apparently only discovered that when they performed testing at one of the sites and found that the fill-in material wasn't what the contract had called for.

The DBA works closely with the Detroit Land Bank Authority in managing the city's demolition work. The federal government has spent an estimated $177 million to demolish over 11,000 buildings or homes in the past five years.

Whistleblowers play an important role of keeping companies honest, something that's important given how many try to take short cuts in an effort to grow their profits. Federal and Michigan state laws protect whistleblowers from being unlawfully discriminated against or terminated. If you've been retaliated against for reporting your employers' illegal activity, then an attorney can advise you of the steps you can take in your case.

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