Detroit Land Bank investigation expands
Federal investigation into Land Bank takes new turn
DETROIT – A federal investigation into the Detroit Land Bank and how it manages all those hundreds of millions of federal dollars just took a new turn.
FBI agents paid a visit to the offices Wednesday looking for records, and the probe is now expanding. It's no longer just about what they're doing with the money -- it's about how the program is being administered in the first place.
From the start, the attempt to revive Detroit's still usable housing stock to get people into houses they can own has been ambitious.
The problem is that since last year, the Land Bank and how it accounts for its cash and whether it's playing fast and loose with its costs has been under an increasingly federal microscope.
For two months during the summer, the feds halted any transfers of money to the Land Bank while the questionable accounting was delved into.
The money spigot had been turned back on now that there are more stringent practices in place, but the FBI out of Washington, D.C. is looking even closer now.
City employees get a hefty discount if they purchase a Land Bank property, and rumblings of employees buying houses and flipping them to real estate investors has been a constant since the program started. The FBI is looking at those records.
"This was a scheduled visit to provide records, not a raid," Land Bank spokesman Craig Fahle said. "We have said from the beginning that we are cooperating with federal authorities, and we will continue to do so."
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