Dowagiac theater developer given probation
Published 1:31 pm Friday, February 5, 2016
Update: Corrected Allen’s age.
The curtain has finally fallen on Dowagiac’s doomed downtown movie theater project, as the man responsible for defrauding the city out of nearly $100,000 worth of grant funding saw his day in court Friday.
Judge Michael Dodge sentenced 73-year-old Ken Allen, of Dowagiac, to five years worth of probation for a single charge of larceny in a building during his sentencing hearing in Cass County Court that morning. The judge also ordered the developer to pay $80,000 worth of restitution to the City of Dowagiac.
Allen pleaded guilty to the larceny charge during an earlier appearance in court, on Dec. 7.
The sentencing brings to a close a criminal case that has been ongoing for nearly a year — and a project that many in the city had been looking forward to since construction work began inside the former Mr. K’s building in 2013.
Allen, the head of development firm Forest Finn LLC, had been heading up efforts for the last several years to transform the former downtown storefront, located on Front Street, into a single screen movie theater. The developer worked with city officials to secure grant money from the state of Michigan for $71,000 for the project. When a grant request for an additional $120,000 was not approved by the state, the city provided the funding to Allen instead, with the expectation that the developer would spend $3 of his own money for every $1 in grant money issued to him, Dodge said.
In January of 2015, Dowagiac City Manager Kevin Anderson asked police detectives to begin investigating the finances behind the project due to concerns about the lack of progress made. The investigation uncovered that Allen had been invoicing the city to be reimbursed for equipment and construction materials that he hadn’t actually purchased, including a new high efficiency furnace for the building.
“There were several other examples of fraudulent conduct, such as checks being issued by your firm in order to give the appearance that actual funds for this theater project were changing hands and that work was being provided as agreed to with the city, when the work was not being performed and the materials not actually being provided,” Dodge said.
Dowagiac police officers turned over the results of their investigation to the county prosecutor’s office, which brought charges against Allen in June.
In total, the city estimated that Allen had defrauded it for around $160,000, though a plea deal struck between Allen and prosecutors lowered the amount of restitution he will be required to pay, Dodge said.
With only a single misdemeanor on his prior record, the judge did not feel Allen should serve jail time for his crime, Dodge said.
“Under the circumstances, I do recognize the primary concern of the city was to punish you for this fraudulent conduct, and that’s resulted in a conviction at age 73, your first felony conviction,” Dodge said. “I think the primary focus should be on securing restitution from you.”