Detroit contractor details $1.7M payments to Kilpatrick pal for no-show work

Bobby Ferguson

A Bloomfield Hills businessman testified he paid companies tied to Bobby Ferguson approximately $1.7 million for no-show work.

The money was part of a series of extortion payments businessman Avinash Rachmale paid allegedly to keep ex-Mayor Kwame Kilpatrick’s close friend happy, protect city deals and help ensure future deals.

“Have you paid any other private contractor over a million dollars for no work?” Assistant U.S. Attorney Mark Chutkow asked.

“No,” Rachmale said.

Prosecutors showed Rachmale more than 10 checks issued between May 2006 and 2007 to firms including Johnson Consulting, a firm headed by Ferguson’s wife.

“Did Johnson consulting or any company associated with Mr. Ferguson provide building improvements to your company?” Chutkow asked.

“No,” Rachmale said.

Rachmale, chief executive of Lakeshore Engineering Services, paid the money through his real-estate company to avoid raising red flags within the engineering firm.

The payments included money to Ferguson to help ensure Lakeshore won city approval of a change order on an asbestos-removal project. Ferguson allegedly demanded five percent of the $1.5 million change order — or $75,000.

“If Mr. Ferguson didn’t do any consulting work for you, then why pay him the $75,000?” Chutkow asked.

“We did not want any of our work to be stopped or any of our contracts to be stopped for unfair reasons,” Rachmale said.

Robert Snell
Robert Snell is the Detroit News federal courts reporter. He can be reached at rsnell@detnews.com or (313) 222-2028.