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Of 62 UNITED STATES DISTRICT COURT WESTERN DISTRICT of MICHIGAN SOUTHERN DIVISION CHRISTOPHER JEROME, an Individual

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Of 62 UNITED STATES DISTRICT COURT WESTERN DISTRICT of MICHIGAN SOUTHERN DIVISION CHRISTOPHER JEROME, an Individual Case 1:16-cv-01116 ECF No. 1 filed 09/09/16 PageID.1 Page 1 of 62 UNITED STATES DISTRICT COURT WESTERN DISTRICT OF MICHIGAN SOUTHERN DIVISION CHRISTOPHER JEROME, an individual, LEO JEROME, an individual, and STORY COMPANIES, LLC, a Michigan limited liability company, Plaintiffs, v. Case No.: Hon. PLAINTIFFS DEMAND A TRIAL BY JURY JOEL FERGUSON, an individual, VIRGIL BERNERO, the Mayor of the City of Lansing, in his individual capacity, LANSING ECONOMIC AREA PARTNERSHIP, INC., a Michigan non-profit corporation, ROBERT L. TREZISE, JR., an individual, CLARK CONSTRUCTION SERVICES, LLC, A Michigan limited liability company, CHARLES CLARK, an individual, FRANK KASS, an individual, CONTINENTAL DEVELOPMENT, INC., an Ohio corporation, HALLMARK CAMPUS COMMUNITIES, an Ohio partnership, FERGUSON DEVELOPMENT, LLC, A Michigan limited liability company, CHRISTOPHER STRALKOWSKI, an individual, FERGUSON/CONTINENTAL LANSING, LLC, A Delaware limited liability company, and RED CEDAR INVESTOR, LLC, a Michigan limited liability company, Defendants. COMPLAINT Plaintiffs, Christopher Jerome, Leo Jerome, and Story Companies, LLC, by and though their attorneys, the Mike Cox Law Firm PLLC, for their Complaint against Defendants, Joel Ferguson, Virgil Bernero, the Lansing Economic Area Partnership, Inc., Robert L. Trezise, Jr., Page 1 of 62 Case 1:16-cv-01116 ECF No. 1 filed 09/09/16 PageID.2 Page 2 of 62 Clark Construction Services, LLC, Charles Clark, Frank Kass, Continental Development, Inc., Hallmark Campus Communities, Ferguson Development LLC, Christopher Stralkowski, Ferguson/Continental Lansing, LLC, and Red Cedar Investor, LLC, state as follows: INTRODUCTION 1. Defendant Joel Ferguson (“Ferguson”) has been running and continues to run a racketeering enterprise (“Ferguson Enterprise”)1 with his son David Ferguson and son-in-law, Christopher Stralkowski (“Stralkowski”) through their company, Ferguson Development LLC (“Ferguson Development”). Operating through Ferguson Development, Ferguson, David Ferguson, and Stralkowski misuse Ferguson’s political influence to create a “pay-to-play” system for municipal and state contract approvals, political favors, and access to public tax dollars related to public contracts for highly profitable land development projects focused primarily in and around the City of Lansing, but extending throughout the State of Michigan. 2. Here, Ferguson and his cohorts have conspired with the Mayor of Lansing, Virgil Bernero, (“Mayor Bernero” or “Bernero”) his staff, the Lansing Economic Area Partnership (“LEAP”), LEAP CEO Trezise, and other local economic development officials controlled by Mayor Bernero to rig the bidding process for public contracts, exchange gifts and bribes for political favors, and extort Plaintiffs in a successful effort to steal a development called the Red 1 The Ferguson Enterprise consists of Joel Ferguson, Christopher Stralkowski, and Ferguson’s company, Ferguson Development, which has been Ferguson’s instrument of corruption and improper political influence for personal financial gain for over two decades. Indeed, Ferguson lists Ferguson Development LLC on his Michigan State University business cards and Ferguson Development’s contact information is also listed on Ferguson’s trustee webpage. Stralkowski has been involved in the enterprise as project manager and officer of Ferguson Development, the conduit for Ferguson’s messages to the Plaintiffs, as well as the various political officials, and has also been involved in the political aspect of the Enterprise by serving as Ferguson’s campaign manager. Page 2 of 62 Case 1:16-cv-01116 ECF No. 1 filed 09/09/16 PageID.3 Page 3 of 62 Cedar Renaissance Project (formerly known as the Capital Gateway Project), (the “Project), which the Defendants call a “game changer” and worth up to $380 million. In stealing the Project from the Plaintiffs, Ferguson and his co-conspirators not only threatened economic harm to Plaintiffs, but have used and continue to use their political access and influence to gain governmental approvals, funnel public money to themselves, and maximize their private profits with the assistance of governmental and quasi-governmental organizations such as the Michigan State Housing Development Authority (“MSHDA”), the Lansing Economic Development Corporation (“LEDC”), Defendant LEAP, the Ingham County Drain Commissioner’s Office, the Lansing City Council, and the Michigan State University Board of Trustees. 3. Such is the measure of Ferguson’s power that he routinely dispatched Mayor Bernero and LEAP CEO Bob Trezise as messengers to deliver financial demands to Chris and Leo Jerome (collectively, “the Jeromes.”) So brazen was and is Ferguson’s enterprise that he even wrote a demand letter in December of 2013 to the Mayor Bernero setting forth his demands for equity shares of the Project from the Jeromes. Ferguson was clear that this putatively City of Lansing-run project would be taken from the Jeromes by Bernero if Ferguson’s demands were not met. Indeed, Ferguson’s demands continued to escalate, and he made good on his threats; ordering Mayor Bernero and LEAP CEO to take the project RFQP award from the Jeromes—and in violation of Lansing contracting ordinances—award the Project on a no-bid basis to Ferguson’s company. 4. Such strong-arm racketeering tactics are a matter of course and the way of doing business for Ferguson. During his almost fifty-plus years in politics, Ferguson and companies associated with him have obtained tens-of-millions in public dollars and tens-of-millions in private Page 3 of 62 Case 1:16-cv-01116 ECF No. 1 filed 09/09/16 PageID.4 Page 4 of 62 profits from extortion schemes, bid-rigging, and political bribery in public-sector contracting, which include an empire of public housing projects and state government buildings (including the controversial Triangle Project Michigan State Police Headquarters). 5. This illegal racketeering, violations of 42 U.S.C. § 1983, and tortious interference with the Plaintiffs’ business expectancies continue as Ferguson and his co-conspirators’ currently attempt to misuse this same political power to push the Ingham County Board of Commissioners to put up $35 million in public bond money for Ferguson’s and the other defendants’ private gain. 6. This lawsuit seeks damages from Defendants pursuant to the civil Racketeer Influenced and Corrupt Organizations Act (“RICO”) 18 USC § 1961 et seq., 42 U.S.C. §1983 for deprivation of Plaintiffs’ property without due process of the law, and state law claims of tortious interference with business expectancies. Plaintiffs respectfully request this Court award them, inter alia, compensatory and punitive damages caused by Defendants’ wrongful and tortious conduct related to Defendants’ fraudulent and extortionate racketeering scheme, specifically the scheme to steal the Project. JURISDICTION AND VENUE 7. This Court has subject matter jurisdiction over this action pursuant to 28 U.S.C. § 1331 because Plaintiffs’ claims arise under the United States Constitution and laws of the United States. 8. Among other things, Defendants have violated the Racketeering Influenced and Corrupt Organizations Act (“RICO”), and this Court has jurisdiction over this matter pursuant to 18 U.S.C. § 1964(a). Page 4 of 62 Case 1:16-cv-01116 ECF No. 1 filed 09/09/16 PageID.5 Page 5 of 62 9. Further, Defendants have violated Plaintiffs’ constitutional rights and this Court has jurisdiction under 42 U.S.C. § 1983 and § 1988. 10. This Court has supplemental jurisdiction over the state law claims pursuant to 28 U.S.C. § 1367(a) because they form part of the same case or controversy as the federal claims. 11. This Court has personal jurisdiction over all Defendants. 12. Venue is proper in this judicial district pursuant to 8 U.S.C. § 1965 and 28 U.S.C. § 1391 because one or more Defendants is subject to personal jurisdiction in this judicial district and resides in this district. PARTIES 11. Plaintiff, Christopher “Chris” Jerome resides in Chicago, Illinois and is a citizen of the State of Illinois. 12. Plaintiff Leo Jerome resides in Holland, Michigan and is a citizen of the State of Michigan. 13. Plaintiff Story Companies LLC, is a Michigan limited liability company with its principal place of business in Michigan with an address of 1919 S. Creyts Road, Lansing, MI 48917. 14. Defendant, Joel Ferguson, is a principal and member of Ferguson Development LLC. Ferguson is also the chairman of the Board of Trustees at Michigan State University (“MSU”). Ferguson is a citizen of the State of Michigan. 15. Defendant, Virgil “Virg” Bernero is the mayor of the City of Lansing, a citizen of the State of Michigan, and is being sued in his individual capacity only. Defendant Bernero is not entitled to governmental immunity because he has deprived Plaintiffs of their federal constitutional Page 5 of 62 Case 1:16-cv-01116 ECF No. 1 filed 09/09/16 PageID.6 Page 6 of 62 rights in violation of 42 U.S.C. § 1983. None of Bernero’s actions to deprive Plaintiffs of their rights are otherwise protected by governmental immunity. 16. Defendant, Lansing Economic Area Partnership, “LEAP”, is an Internal Revenue Service 501(c)(6), Michigan not-for-profit corporation with an address of 500 E. Michigan Avenue, Ste. 202, Lansing, Michigan with its principal place of business located in Lansing, Michigan. Through a contract between the Lansing Economic Development Corporation—a 9- member board appointed by Mayor Bernero—and LEAP, the City of Lansing uses LEAP to act as its agent to lead, manage, control, and handle all economic development in the City. LEAP is funded by Lansing area businesses, and prominently promotes these contributors as “investors” and “preferred vendors” on its website. 17. Defendant, Robert (“Bob”) L. Trezise (“Trezise”), is the Chief Executive Officer of LEAP. Trezise is a citizen of the State of Michigan. 18. Defendant, Clark Construction Services, LLC, (“Clark Construction”), is a Michigan limited liability company with an address of 3535 Moores Drive, Lansing, Michigan, with its principal place of business located in Lansing, Michigan.
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