July 9, 2009

LANSING -Attorney General Mike Cox today announced the filing of a civil suit on behalf of the Michigan Emergency Financial Assistance Loan Board (ELB) to recover $264,000 in unauthorized payments Arthur Blackwell II made to himself when he served as the City of Highland Park's Emergency Financial Manager.

  "Public officials are entrusted to serve their community, not take advantage of it," said Cox.  "But in this case, the public trust was completely violated."

The suit alleges that from April 2008 to December 2008, Blackwell, without approval of the ELB, made $308,000 in unauthorized payments to himself from the City of Highland Park.  Blackwell later repaid $44,000.  However, despite demands from the ELB to return the remaining funds, Blackwell has failed to do so.

In seeking a return of the $264,000, the civil law suit contains four counts against Blackwell, including: breach of contract for not seeking approval before paying himself; violation of statutory conversion law for making payments to himself, under which the state seeks a judgment of three times the amount found by the jury? up to $792,000; committing common law conversion for converting funds to personal use; and, breach of fiduciary duty for making unauthorized payments to himself.  Funds would be returned to the City of Highland Park.

The suit was filed in the Wayne County Circuit Court.  The Attorney General's office is currently seeking to serve Blackwell with the law suit. 

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