May 29, 2014

Former Detroit Chief Administrative Officer Sentenced for Corruption and Tax Offenses

Derrick Miller, former chief administrative officer of the city of Detroit, was sentenced today to 12 months in a halfway house for corruption and tax offenses, U.S. Attorney Barbara L. McQuade announced.

McQuade was joined in the announcement by Paul Abbate, Special Agent in Charge of the Detroit Field Office of the Federal Bureau of Investigation; Carolyn Weber, Special Agent in Charge of the Internal Revenue Service, Criminal Investigations; Randall Ashe, Special Agent in Charge of the Environmental Protection Agency, Criminal Investigation Division; and Giovanni Tiano, Special Agent in Charge of the U.S. Department of Homeland Security, Office of Inspector General.

U.S. District Judge Nancy G. Edmunds also ordered that Miller, 44, of Vienna, Virginia, pay restitution and back taxes with penalties to the IRS.

According to court records, from 2005 to 2007, Miller served as chief administrative officer and chief information officer for the city of Detroit. In these capacities, Miller had authority over the lease and sale of properties owned by the city of Detroit. During that period, Miller accepted $115,000 as corrupt rewards from a real estate broker who received commissions in connection with the lease or sale of city properties.

In October 2008, Miller filed an individual income tax return for the 2007 tax year in which he willfully made statements that he knew were false regarding the amount of income he received from two of his companies, Atrium Financial LLC and Citivest LLC, with the intent of concealing that income from the IRS. Miller intentionally failed to report on his return the $46,725 bribe he received that year from the real estate broker. Miller also intentionally failed to report on his tax return a total of $568,000 he received in 2007 for his assistance to a real estate company that entered into a purchase and leaseback of a portfolio of properties. The total amount of additional tax due and owing for tax year 2007 was $240,858.

The court departed from the advisory guidelines range of 70-87 months in prison because of Miller’s extraordinary assistance in the prosecution of a public corruption case of historic importance to this region. As a member of former Detroit Mayor Kwame Kilpatrick’s inner circle, Miller gave the jury a firsthand perspective of the illicit objectives and motivations of Kilpatrick, contractor Bobby Ferguson, and their associates.

McQuade said, “The court recognized that Miller’s cooperation was extraordinary and essential to bringing to justice other more serious wrongdoers. As a member of the inner circle of Kilpatrick’s criminal enterprise, Miller provided detailed and corroborated testimony about Kilpatrick’s fraud, bribery and extortion. Public officials should take note that early and extraordinary cooperation will yield a substantially lower sentence.”

United States Attorney McQuade thanked the agents of the Federal Bureau of Investigation, the Internal Revenue Service-Criminal Investigations, the Environmental Protection Agency Criminal Investigations Division, and the U.S. Department of Homeland Security Office of Inspector General for their assistance in the successful investigation of the case.

The case was prosecuted by Assistant U.S. Attorneys Mark Chutkow, R. Michael Bullotta, Jennifer Blackwell, and Eric Doeh.