Kwame Kilpatrick, former Detroit Mayor, as well as former city Treasurer Jeffrey Beasley and MayfieldGentry Realty Advisors LLC, have been charged by the U.S. Securities and Exchange Commission with crimes linked to the mishandling of pension funds. Also included in the round-up was Mayfield CEO Chauncey Mayfield.
According to Lansing State Journal, the group allegedly solicited and received $125,000 worth of perks and benefits that were paid for by MayfieldGentry. Under Chauncey Mayfield's recommendation, trustees invested nearly $117 million in a real estate investment trust that would be controlled by MGRA Genesis REIT. Shortly thereafter, things started to get interesting.
Overall, The Detroit Police and Fire Retirement System and its General Retirement System invested a staggering $115 million into the trust, monies that were later spent on various trips and events that directly benefited Kwame Kilpatrick and Jeffrey Beasley. In addition to taking a private jet to Las Vegas that totalled nearly $60,000, MayfieldGentry also paid for Kilpatrick's trip to Tallahassee, Florida with Beasley's son. None of these
Upon learning that pension funds that been used to purchase property in California, the police and fire board promptly fired MayfieldGentry. The board is currently looking into legal action.
The SEC states that everyone involved violated a host of laws that dictate how such investments are made and how these transactions are to be performed.
Additionally, the SEC is seeking the following:
[The] disgorgement of ill-gotten gains, penalties, and permanent injunctions, including an injunction against Kilpatrick and Beasley to prohibit them from participating in any decisions involving investments in securities by public pensions
Unfortunately for Kilpatrick and Beasley, these aren't the only problems currently roosting in their nests. Kilpatrick is currently facing charges for a bid-rigging scheme, while Beasley is under investigation for accepting bribes to influence pension fund votes.