West Bloomfield house raided after Wayne County roads employees sell 596 generators for personal gain

Kevin Gunn, John Gibson used $1.7 million in taxpayer funds for scheme, authorities say

A house on Hidden Oaks Lane in West Bloomfield that was raided May 3, 2022, in connection with a Wayne County Roads Division corruption investigation. (WDIV)

WEST BLOOMFIELD, Mich. – A West Bloomfield house was raided Tuesday after Wayne County Roads Division workers used $1.7 million in taxpayer money to fraudulently purchase 596 generators and sell them for personal profit, officials said.

A criminal complaint names Kevin Gunn, 64, of West Bloomfield, and John Gibson, 54, of Detroit, as two Wayne County Roads Division employees who, along with others, engaged in the scheme.

A West Bloomfield house was raided Tuesday after Wayne County Roads Division workers used $1.7 million in taxpayer money to fraudulently purchase 596 generators and sell them for personal profit, officials said. READ: https://www.clickondetroit.com/news/local/2022/05/03/west-bloomfield-house-raided-after-wayne-county-roads-employees-sell-596-generators-for-personal-gain/

Scheme overview

Between January 2019 and August 2021, Gunn told Wayne County vendors to buy generators and other power equipment -- lawnmowers, chainsaws, and backpack blowers -- from retailers on behalf of the county, court records show.

The vendors would submit invoices for the items to Wayne County, but Gunn told them to falsify those invoices to hide the fact that he was buying generators, according to authorities. Instead of charging the Road Division for generators, Gunn told the vendors to list items that those vendors were authorized to sell the county, the criminal complaint says.

This means the generators and equipment Gunn was instructing the vendors to purchase never showed up on those invoices, officials said.

Employees at the Road Division would then approve the purchases with taxpayer funds, authorities said.

After those purchases were made and approved, Gibson and Gunn took possession of the equipment and resold it over the internet and social media for personal profit, according to the criminal complaint.

Between Jan. 16, 2019, and Aug. 3, 2021, Wayne County vendors purchased 596 generators and a variety of other power equipment worth a total of $1.7 million on behalf of the county, court records show.

“That equipment was never supplied to or used by any department within Wayne County,” the criminal complaint says.

Wayne County Roads Division background

The Wayne County Roads Division is the largest division within the county’s Department of Public Services. It’s responsible for repairing and maintaining the county’s roads and receives about $20 million per year in federal funding to do so, officials said.

Gunn manages the bridge unit of the Roads Division, and Gibson is a foreman within that unit, according to court records. Gunn has been with the county for 34 years and worked as a manager for 12 years, officials said. Gibson has been employed by Wayne County for 20 years, including 11 as a foreman, according to authorities.

Vendors have to be verified and approved to purchase and supply products and services for Wayne County.

March generator purchase

The Wayne County Sheriff’s Office received a tip March 2, 2021, about an unusual increase in generator purchases by a vendor acting on behalf of the county, the criminal complaint says.

That same day, Gunn, acting on behalf of the Wayne County Roads Division, called a generator retail supplier and placed an order for 14 Honda generators, officials said. They were paid for by a county vendor, but that vendor’s contract with the county didn’t include the authorization to buy generators, agents said.

In the invoice for the generators submitted to the county, the vendor listed items that it was authorized to purchase on behalf of the county, court records show. This was done at the direction of Gunn, officials said.

Gunn sent two men in a black Dodge pickup truck with an attached U-Haul trailer to pick up the generators, court records say. Police surveillance revealed the pickup truck was registered to another person in Southeast Michigan.

After picking up the generators, that person drove his truck home, according to authorities.

Search warrant

Deputies with the Special Operations Unit executed a search warrant on March 2 at the pickup truck owner’s home, the criminal complaint says.

Officials said they recovered the 14 generators that had been purchased earlier that day, as well as $40,300 in cash from a safe.

Law enforcement officers interviewed the owner of the pickup truck, who was a former employee of the Wayne County Roads Division, they said. He outlined the fraud scheme, revealing that vendors would buy generators and other power equipment on behalf of the county, only for that equipment to be resold by Gunn for his own profit, court records show.

The former employee said he began acquiring the Honda generators directly from the supplier at Gunn’s direction, but only after they had been paid for by vendors, according to authorities.

“Gunn coordinated the transactions by phone with (the supplier) and (the former employee),” the complaint reads. “At Gunn’s direction, (the former employee) resold the generators on the internet via Facebook Marketplace and shared the profits with Gunn.”

Undercover surveillance of money exchange

Officials got the former employee’s permission to conduct surveillance while he paid Gunn $4,500 in cash -- his share of the profits from the generator sales, according to the criminal complaint.

On March 26, Gunn pulled up in a white Ford F-250 truck with Wayne County Roads Division markings, officials said.

Agents used remote monitoring devices to listen to and record the conversation between Gunn and the former employee, they said. Agents also watched Gunn receive the money, they said.

June generator purchases

Agents watched Gibson arrive at the same supplier on June 16 in a Roads Division truck and load five Honda 7,000-watt generators and five Honda 2,200-watt generators into the bed of the truck, court records show.

The generators were ordered by Gunn but paid for by a vendor, officials said.

Gibson drove the truck to a private home and unloaded the generators into a large metal shipping container in the backyard, according to agents.

On June 30, Gibson returned to the supplier in a marked Roads Division truck to pick up another order of generators placed by the vendor, authorities said.

He picked up the generators and met with someone to exchange one Honda 7,000-watt generator and four Honda 2,200-watt generators, the criminal complaint says. This buyer later told officials that he had met with Gibson to buy generators on multiple occasions, agents said.

That man said Gibson charged significantly less than retail value for the generators he sold, the complaint says.

Gibson then drove to the same residence he’d visited after the June 16 purchase and backed the truck into the driveway, officials said. With the help of another man who exited the residence, Gibson unloaded the generators into the metal shipping container in the backyard, according to authorities.

Generators sold to Wisconsin man

On Aug. 3, Gibson returned to the supplier in a marked Roads Division truck to meet with someone from Wisconsin in the parking lot, court records show. The Wisconsin man paid Gibson cash for five Honda 2,200-watt generators, two Honda 3,000-watt generators, and one Honda 7,000-watt generator, the criminal complaint says.

All eight of those generators had been purchased with Roads Division funds, officials said.

Authorities said they interviewed the Wisconsin man and he told them that he had driven to Michigan six times to meet with Gibson and buy Honda generators and other power equipment. He told officials that Gibson charged significantly less than retail value for the generators and other equipment, court records show.

Vendor interview

During an interview with authorities, the vendor involved in this scheme admitted to falsely invoicing Wayne County for traffic safety items and attenuators when the actual equipment purchased was generators and other items for Gunn, according to officials.

The vendor said a 50% markup was added to the items, the complaint says. In total, the vendor admitted to invoicing Wayne County for about $1.1 million in traffic safety equipment and attenuators that had never been provided, court records show.

Officials said interviews with other vendors revealed “a similar pattern of fraud, in which Gunn would contact the vendor to request the purchase of unapproved generators for Wayne County,” the criminal complaint reads.

Each of these purchases was made outside the terms of vendor contracts with the county, authorities said.

The total value of equipment purchased as part of the scheme was about $1.7 million in taxpayer funds, court records show.

“The alleged actions of these individuals are nothing short of disgraceful,” Wayne County Sheriff Raphael Washington said. “To brazenly steal from hardworking taxpayers and fraudulently line their own pockets while holding positions of public trust make these crimes all the more deplorable.”

Charges and raid

The criminal complaint concludes Gunn, Gibson, and others conspired to commit and committed federal program theft, money laundering, and wire fraud.

Federal program theft carries a maximum sentence of 10 years in prison and a fine of $250,000. Wire fraud carries a maximum sentence of up to 20 years in prison and a fine of up to $250,000. Money laundering carries a sentence of up to 20 years in prison and a fine of up to $500,000.

On Tuesday morning (May 3), FBI agents raided a house on Hidden Oaks Lane in West Bloomfield in connection with this case.

Gunn and Gibson were both arrested Tuesday morning, officials said.

“Today’s arrests reinforce our dedication to prosecuting corrupt public officials who elevate their own greed over the best interests of the public who rely on the safe administration and maintenance of public infrastructures like roads,” United States Attorney Dawn Ison said. “We thank Wayne County Prosecutor Kym Worthy, and Wayne County Executive Warren C. Evans who have been instrumental in starting and moving this investigation forward.”

Here is a statement from Wayne County Executive Warren Evans:


About the Author:

Derick is the Lead Digital Editor for ClickOnDetroit and has been with Local 4 News since April 2013. Derick specializes in breaking news, crime and local sports.