Opinion ID: 2974278
Heading Depth: 3
Heading Rank: 1

Heading: Financial Benefits

Text: From 1992 through 1999, the Kelleys received significantly more than $100,000 in financial benefits from American International and its owner, Vallecorsa. The first such instance occurred in December 1992, when Kelley told Vallecorsa that his home had suffered roof damage and asked whether he could “recommend” someone to fix it. Vallecorsa, apparently appreciating Kelley’s notso-subtle hint, hired one of his subcontractors, Elio Giavonne (“Giavonne”), to repair the roof. Unfortunately for Vallecorsa, the roof was beyond repair and an entirely new roof was needed. Giavonne, after getting Vallecorsa’s approval for the expenses, had a new roof and gutters installed, costing approximately $14,000. As part of this quid pro quo arrangement, on May 17, 1993, Kelley granted American International a one-year Wayne County contract valued at $1 million. Shortly thereafter, the Kelleys requested Vallecorsa to make approximately $40,000 in renovations to their kitchen. Giavonne, after getting approval from Vallecorsa, replaced the kitchen cabinets, counters, and tile flooring, and added new appliances. The Kelleys’ home improvements continued: a new basement floor, water heater, refinishing all the wooden floors, brick cleaning, renovations to the garage, and a finished basement. In total, Giavonne billed Vallecorsa nearly $63,000. Nos. 05-1361/1435 United States v. Kelley, et al. Page 3 In the summer of 1994, Kelley approved another contract for American International worth approximately $11 million. He sent a letter to Vallecorsa, dated August 11, 1994, officially awarding him the airport lighting and sign contract. Thereafter, Kelley asked Vallecorsa where he bought his oriental rugs. Vallecorsa recommended Nigosian’s Oriental Rug Company (“Nigosian”). The Kelleys went to Nigosian and picked out rugs costing $28,000, which Vallecorsa agreed to purchase. In order to fulfill their agreement, Vallecorsa would write a check payable to himself from the American International bank account. He would then have one of his employees cash the check and would give Kelley the cash to pay the Nigosian bill. For example, at trial the government presented evidence that showed American International writing a check to Vallecorsa for $4,500, dated November 10, 1994. Five days later, the Kelleys paid Nigosian $4,300. On December 9, 1994, American International wrote a check to Vallecorsa for $4,300 and on the following day the Kelleys paid Nigosian $4,300. On January 26, 1995, American International wrote a check to Vallecorsa for $4,440. On February 13, 1995, the Kelleys paid Nigosian $4,400. On March 9, 1995, American International wrote a check to Vallecorsa for $4,400 and, four days later, the Kelleys paid Nigosian $4,000. In addition to cash payments for the oriental rugs, Kelley would routinely request large amounts of cash, ranging from $2,000 to $4,000. American International employees testified that before Kelley would visit the office, Vallecorsa would write a large check to himself, have an employee cash it, and then, after a private meeting with Kelley, the cash was never seen again. There were fifty-nine instances where large-sum checks were written to Vallecorsa and then cashed. There were 23 unexplained large cash deposits in the Kelleys’ joint checking account near the dates when Vallecorsa cashed these large-sum checks written to himself. Vallecorsa also made large donations to the Kelleys’ favorite charities. In 1995, he wrote checks totaling $2,000 to the Eastern Michigan University Black Alumni Association. Vallecorsa is a white male, who never attended college, and has no ties to Eastern Michigan University. He testified at trial that the Kelleys requested that he make several charitable donations to their selected charities totaling $16,000, including a church, where Kelley was an officer, and a community center, where Barbara Kelley was an officer. From 1995 through 1998, the Kelleys also received free automobile repairs and service from American International. Some of these repairs were performed at American International’s service garage. Other times, these repairs were made by professional mechanics, paid by American International. The repairs and service included: body work, a paint job, new tires, tune-ups, oil changes, and similar routine maintenance. The Kelleys also requested lavish trips in exchange for airport contracts. In 1995, the Kelleys learned that Vallecorsa was planning a trip to Italy, and they wanted to join him on this excursion. Barbara Kelley asked Vallecorsa to finance their travel, and he agreed. To cover airfare, Vallecorsa gave Kelley $8,000 in cash and charged the Kelleys’ hotel room, totaling $2,437.84, to an American International account. Four months later, Kelley returned the favor by approving another $1 million airport contract for American International. Vallecorsa also helped the Kelleys keep up with the Joneses. For example, the Kelleys were invited to attend the second inauguration of President Clinton in Washington D.C., and Barbara Kelley apparently had nothing appropriate for the occasion. Accordingly, she asked Vallecorsa to purchase a gown for her. On January 9, 1997, eleven days before the inauguration, Vallecorsa paid $2,050 to Barbara Kelley for a dress. Nine days later, Kelley signed a document to begin the renewal process for American International’s one-year airport maintenance contract worth $1 million. He approved the contract two months later. Nos. 05-1361/1435 United States v. Kelley, et al. Page 4 In April 1997, American International submitted a bid on the runway paving project at the Detroit Metro Airport. The airport’s project managers and Wayne County field engineers recommended that American International not receive the contract because of its weak capabilities and personnel problems. Kelley decided against this recommendation and awarded the contract to American International on May 5, 1997. While American International’s contract was pending, Kelley suggested to his son, Wilbourne A. Kelley, IV (“Butch Kelley”), that he meet with Vallecorsa. Butch Kelley was the personal representative and attorney for the estate of Rosabell Bush. He was removed from the estate when he mismanaged its funds. After borrowing $12,000 from his father and step-father to pay the fees he owed to the estate, Butch Kelley still had to come up with $15,000, which represented the estate’s resources that he controlled. On May 2, 1997, three days before Kelley awarded American International its newest contract, Vallecorsa, through his lawyer, paid Butch Kelley’s $15,000 debt. Kelley’s son cashed in on Vallecorsa’s “generosity” in other ways too. In 1998, Kelley talked with Vallecorsa about hiring his son, who was unemployed at the time. Butch Kelley was hired by Vallecorsa, but needed a valid driver’s license for the job. Vallecorsa provided Butch Kelley with free legal services to resolve several outstanding traffic offenses, which had resulted in the suspension of his license. With a valid license, Butch Kelley received a regular salary from American International. In the fall of 1997, Kelley was involved in American International’s $3.7 million dollar claim for extra payments under the lighting and sign contact. The airport project managers believed that American International’s claim was vastly overstated. Kelley negotiated directly with Vallecorsa and settled the claim for $1.2 million. One week before the settlement, American International had written a check for $5,100 to Vallercorsa. Kelley made a $2,000 deposit one day after Vallecorsa cashed the check. Eleven days after Kelley negotiated the settlement, he deposited the remaining $3,600 into his joint checking account. One month later, the Kelleys made another $4,500 cash deposit. On November 4, 1997, Kelley interviewed American International along with other companies for renewal of a two-year $2.4 million maintenance contract. Three days later, Kelley made a $3,600 cash deposit into his joint checking account. On November 24, 1997, Kelley approved the proposed American International two-year airport maintenance contract. On December 8, 1997, Vallecorsa cashed a $3,500 check from American International and two days later, Kelley made a $2,300 cash deposit into his joint checking account. One week later, Kelley recommended to the Wayne County Commission that the two-year maintenance contract be awarded to American International. On January 27, 1998, the Kelleys’ joint checking account received a $1,000 deposit. On the same day, the Wayne County Commission approved Kelley’s recommendation to grant American International the $2.4 million airport maintenance contract. While this large airport contract was still pending, Kelley asked Vallecorsa to host a dinner party to celebrate Barbara Kelley’s 50th birthday. He obliged, and on January 17, 1998, the Kelleys hosted an ornate birthday celebration at the Ritz-Carlton Hotel with approximately 100 people in attendance. American International was directly billed $21,949.35 for the party by the hotel. When Barbara Kelley gave Vallecorsa the bill for the birthday party, he initially refused to pay it. Eventually, he and Barbara Kelley came up with a plan. First, Barbara Kelley requested that the hotel reissue the bill in her name with no mention of American International or Vallecorsa. Barbara Kelley was a full-time employee at Blue Cross Blue Shield of Michigan, a health care provider. She presented an invoice for “health care consulting” to American International for the full amount of the birthday party plus an extra amount for the taxes she would have to pay. Vallecorsa wrote a $23,125 check payable to Barbara J. Kelley Health Care Consultant for the illusory health care services. Barbara Kelley cashed the check and had her bank issue a cashier’s check payable to the Ritz-Carlton Hotel. Nos. 05-1361/1435 United States v. Kelley, et al. Page 5 From April 1998 to August 1998, the Kelleys received $6,500 in cash from Vallecorsa. In exchange for Vallecorsa’s generosity, Kelley approved a $553,000 airport contract for restroom renovations on August 18, 1998. Over the next year, the constant cash payments continued. In early 1999, Kelley indicated to Vallecorsa that he wanted to leave Wayne County and work for one of his companies. Jeffery Fanot, Vallecorsa’s attorney, conducted job negotiations with Kelley in violation of Wayne County’s Ethics Ordinance, which prohibited employees from such negotiations with Wayne County contractors. Kelley was eventually hired by Vallecorsa to start work in June 1999. Before Kelley could begin his employment with Vallecorsa, he decided to take a temporary job with the Detroit Public School System. Kelley, again with a “wink and a nod,” suggested that his employment with the school system would be beneficial to Vallecorsa and his companies. It only took Kelley 90 days to deliver. American International, which had done very little business with the Detroit Public Schools, received $800,000 in new business. In exchange, Vallecorsa bought Kelley a new Jeep Cherokee SUV. Additionally, Kelley received $4,900 in cash payments over the last few months of his employment with the public school system. On January 6, 2000, Kelley started work at American International, earning a salary with benefits of $200,000. Kelley was finally fired for poor performance by Vallecorsa in 2002. Within a month, Wayne County terminated American International’s largest airport contract.