'Extorted' businessman snags Detroit hotel after being extorted at hotel

Hotel St. Regis

Bobby Ferguson and extorted businessman Avinash Rachmale met for lunch at the Hotel St. Regis to smooth over an insult.

According to testimony Friday, Ferguson was extorting the Detroit businessman and his partner Tom Hardiman out of  almost $800,000 for no-show work on a water main project when Hardiman lashed out.

Hardiman called a Ferguson associate a “parasite.”

Avinash Rachmale

Ferguson, a close friend of ex-Mayor Kwame Kilpatrick who is accused of capitalizing on that friendship and shaking down contractors, complained to Rachmale about the insult during a meeting at the landmark hotel along W. Grand Boulevard.

“Bobby Ferguson did not like that,” Rachmale said. “(Ferguson) said ‘Hardiman is not doing the right job, is not being fair and it is going to hurt your company,'” Rachmale said.

“What did you perceive Mr. Ferguson to mean when he told you Hardiman was going to hurt your company?” Assistant U.S. Attorney Mark Chutkow asked.

“The way I took it was that if we didn’t continue paying, he might shut down our project or something,” Rachmale said.

So Rachmale kept paying, and his business empire kept growing.

Last year, a Rachmale-related firm won an auction to buy the Hotel St. Regis.

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