Lawsuit alleges Dearborn mayor directed officials to harass developer

A man who was one of Dearborn's most prominent developers is accusing the city of conspiring to harass and drive him out of business, a claim the mayor dismissed as inaccurate.

In a federal lawsuit filed this week, developer Hakim Fakhoury alleges that Dearborn Mayor Jack O'Reilly Jr. directed police and legal department officials to target Fakhoury, who used to own several major commercial properties in west Dearborn's business district. Fakhoury, who had plans to redevelop west Dearborn into a destination spot, said he got rid of most of his west Dearborn properties in 2014, losing millions of dollars in assets because of government pressure.

The lawsuit, filed Tuesday in U.S. District Court in Detroit by attorney Shereef Akeel on behalf of Fakhoury and three of his family members, claims that Fakhoury family members were arrested and charged several times by police on charges such as trespassing but were acquitted in all cases. The goal of the city, the lawsuit alleges, was to push Fakhoury out in favor of another developer, Mike Hamame, a former business partner of the Fakhourys.

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Dearborn officials and Hamame told the Free Press they haven't seen the lawsuit yet, but said Fakhoury's accusations weren't true and questioned his business ethics.

The lawsuit names O'Reilly, Dearborn Police Sgt. Andreas Barnette, and a city prosecuting attorney, William Debiasi, as defendants.

"It's tragic what happened to the Fakhoury family," said Akeel. "No family should be subjected to such treatment. It's been a total nightmare. ... Maybe it happens in Third World countries, but not in the United States. Thankfully, we have the Constitution to hold people accountable.

"This man built so much of the west district of Dearborn. The police were after him, the prosecutors were after him. He was subjected to so many criminal proceedings. It's frightening to know this can happen in this day and age."

The lawsuit reveals tensions in Dearborn over the development of an area that officials and some residents have thought could be the next hot spot in metro Detroit. They hope to pattern it after downtown Royal Oak or Birmingham, a place for people to hang out in a walkable space with restaurants, condos and shops. But over the years, properties along or near Michigan Avenue remained vacant, and the city, at times, blamed Fakhoury.

The lawsuit claims the constitutional rights of the Fakhoury family were violated, specifically the 14th Amendment's Equal Protection Clause and the 4th Amendment's prohibition of unreasonable searches and seizures.

The lawsuit alleges that Fakhoury's wife, April Fakhoury, was threatened in person by Hamame in Dearborn in March 2013 with the remark  “I have a bullet with your name on it.”

She said she then filed a police complaint, but her complaint did not lead to charges and instead, the city brought charges against April Fakhoury for filing a false police report. She later was acquitted, and Hamame was never charged.

In a Dearborn police report contained in the lawsuit, "Hamame adamantly denied any encounter with Fakhoury" on the day of the alleged threat.

The lawsuit also contains a copy of a Dearborn Police bulletin in April 2013 that warns about the Fakhourys, asking police to be on the lookout for any potential problems.

The lawsuit alleges that other family members, including Fakhoury's children, were targeted by police for arrests on charges such as trespassing on properties they owned.

Speaking to the Free Press, O'Reilly criticized Fakhoury, saying he acts like "he's a victim all the time. Everyone has victimized him — that's how he sees things."

O'Reilly said he hasn't seen the lawsuit, but said of Fakhoury's complaints: "None of it will be accurate and true."

"All of the facts will come out. ... I have no concerns," O'Reilly said. "I saved all his e-mails."

The e-mails that Fakhoury wrote were "reckless and ridiculous, and mine were thoughtful."

Dearborn Police Chief Ron Haddad told the Free Press he supports the police officer named in the lawsuit: "I stand behind Sgt. Barnette's investigations. We'll wait to see the lawsuit before I make any further comments."

Debra Walling, city attorney, did not comment.

Hamame, who now is in control of property that Fakhoury used to control, told the Free Press: "It's comical to me to think that the city could take away property from Hakim Fakhoury and give it to me. Hakim Fakhoury has no one to blame but himself. It's a result of his unscrupulous behavior and his ethics. ... His business practices led him to the position he's in today."

The lawsuit claims that "the mayor met with Mike Hamame and other Hamame family member(s) in private meetings with the goal of divesting the Fakhoury family of its properties."

One of those meetings, the lawsuit claims, "took place at a lunch meeting at Habib’s Restaurant on or about Feb. 15, 2013, which included" O'Reilly, his chief of staff, Mark Guido, city attorney Walling and Hamame family members.

"O’Reilly advised Mike Hamame and the Hamame family member(s) that if Mike Hamame and his family wants to do business in the city, they needed to dissolve their business partnership alliance with the Fakhoury family," the lawsuit claims.

The Fakhourys say they asked the city for years to end paid parking in west Dearborn to attract more business, but the city refused, they said, until the Fakhourys left.

The lawsuit alleges that in June 2014, when the Fakhoury family ended their dispute with the Hamame family, Hamame telephoned O'Reilly to tell him that a deal had been reached and asked about "the removal of the paid parking meters" in west Dearborn.

Four months later, the City Council moved to phase out paid parking, the lawsuit said.

"There was a total annihilation (of me and my development)", Fakhoury told the Free Press.

The case has been assigned to U.S. District Judge Gershwin Drain.

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Contact Niraj Warikoo: nwarikoo@freepress.com or 313-223-4792. Follow him on Twitter @nwarikoo.