Power Bandits

Brazen thieves across the state steal millions of dollars of electricity and natural gas each year. And the problem is getting worse
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Photographs by Nick Martines

In overgrown, trash-lined alleys all over Detroit — even in upscale West Bloomfield Township, and as far away as the Upper Peninsula — a potentially lethal and expensive cat-and-mouse game is playing out every day at a steep cost to residents and businesses.

The battle, so far, is a mismatch. A team of 80 investigators and technicians from DTE Energy are up against hundreds of state property owners and landlords — and desperately poor Detroiters — who are stealing more than $100 million worth of electrical power and natural gas each year, according to company officials.

Everyone who pays their utility bill is a victim, as DTE Energy passes on the losses to ratepayers. “The incidents of theft are much higher in Detroit,” says DTE spokesman Scott Simons. “Ninety percent of the theft cases are in the city of Detroit. It’s [happening] all throughout the city, in pockets of poverty.”

The racket is shockingly crude and simple. Coat hangers, referred to as fish hooks by investigators, are attached to extension cords and thrown over power lines humming with as much as 13,200 volts of electricity. The cords are strung across back yards, sometimes dangling from tree branches, carrying the hijacked electricity into homes and buildings.

The heist of electricity also is made at the meter box. Typically, a glass cover is smashed, the metering device removed, and pieces of metal that can conduct electricity — often spoons, knives, or forks — are wedged between contact points to complete the bypass. The end result: Unmetered power flows unabated.

Natural gas is another resource targeted by criminals. In many cases, thieves dig man-sized holes in front of vacant homes or buildings to tap an incoming gas line. Once the line is found, a bypass is fashioned using a car’s radiator hose or PVC pipe. A more sophisticated approach, often seen in commercial buildings, happens when meters are rigged to record a fraction of the energy consumed.

Across the country, utility companies are reporting rising incidents of energy theft that, they say, reflect the nation’s economic downturn.

According to Electric Light & Power magazine, the theft of power by customers costs utilities 1 percent to 3 percent of revenue annually, or about $6 billion industrywide each year.

“We get 2,000-plus new leads every week,” says Mark Johnson, DTE’s general manager for energy theft investigations. “The main way we find them, though, is through our meter readers who go to every house once a month. If they see something abnormal, they flag it and send it to us.”

As the epidemic of energy theft has soared in recent years, DTE has stepped up its response team. Of 80 people involved, a third serve as investigators; the rest disconnect illegal hookups.

“Last year we turned off 62,000 (rigged meters), and we investigated over 100,000,” Johnson says. “The year before, we turned off over 40,000.”

He concedes the increase in disconnections is partly due to DTE’s larger investigative team.

Probably the most surprising aspect of energy theft is that more people aren’t being electrocuted.  “Kids could touch the lines hanging off the poles and get hurt,” Johnson says. And once the cold weather sets in, temperature fluctuations increase the likelihood of a natural gas explosion.

Since 2005, half a dozen people have been found electrocuted at the base of utility poles, although it’s not clear whether they were killed stealing electricity or stripping copper from transformers. Copper theft, which hit epidemic proportions a couple of years ago, creates another major loss for DTE.

Natural gas explosions, although rare, do occur. On July 8, a vacant house in southwest Detroit blew up after neighbors had complained of strong odors of natural gas permeating the area. Months earlier, DTE had disconnected the service at the request of an occupant. The house exploded because natural gas built up inside, says DTE spokesman John Austerberry. “It was clear that someone had tampered with the service.

Fortunately, no one was hurt or injured [because] the house was empty,” he says.
In May, another natural gas explosion rocked a vacant duplex on Detroit’s east side. Someone had stolen the one remaining hot water heater from the basement and left a gas line valve open, allowing gas to build up.

 

Takin’ it to the Streets

In addition to doubling the manpower of its investigative team in recent months, DTE has deployed surveillance cameras on utility poles in select areas of the city, hoping to catch thieves in the act. Johnson says the Detroit Police Department and the Wayne County prosecutor’s office have been cooperative in arresting and prosecuting energy thieves.

The stepped-up surveillance, along with increased cooperation with law enforcement officials, paid off with 70 arrests of people caught in the act of stealing power in the first half of the year. But the arrests came with a price. “Our guys travel alone. They do this work day in, day out, by themselves,” Johnson says. “If there’s a threat, we will send help. We have armed security, and we go out there as supervisors to assist.”

Through June, DTE recorded more than 40 incidents where investigators and utility crews had been assaulted or threatened. “We’ve had gunfire directed at our employees this year, we’ve had guns pulled on them, and they’ve been kicked and punched,” Johnson says.

As a result, DTE helped push a package of bills in the Michigan Legislature to protect workers, criminalize the act of stealing energy, and make property owners or residents monetarily liable for the stolen power.

In July, Gov. Jennifer Granholm signed a series of bills that, in part, will make energy customers responsible for illegal connections. Property owners would have to provide proof of ownership or residency, and must pay fees and damages before service can be restored.

One bill in the package makes it a felony to illegally sell or transfer utility service. The penalty is a stiff one — up to five years in prison and a maximum $5,000 fine for a first offense.

Another bill spells out a minimum penalty for assaulting a utility worker on duty as a misdemeanor punishable by a year in jail and a $1,000 fine.

The penalties become more severe if the worker has to be treated in a hospital.

The legislation will require utilities to take action to cut off illicit electric power or gas connections at locations where it was shut off at least twice in the previous 24 months for unauthorized use.

The Danger Zone

Gregory Butts has spent 27 years with DTE, and as the company’s lead investigator, he’s in the field every day. “We send a crew out to shut off these dangerous situations and make people safe, but at the same time, the people we’re trying to protect become ticked off and try to intimidate our people,” Butts says.

On the property of a DTE facility at Warren and Livernois, Butts showed off a wall displaying broken meters, shunts used to divert electricity, and devices called top boxes that DTE technicians install above broken meters to prevent repeat thefts. “We are constantly working with our vendors to find new ways to lock them out, but (the thieves) will come up with something to defeat that. It’s a cat-and-mouse game,” he says.

On a recent tour around the northeast side of Detroit, Butts led a reporter and photographer through some of the most poor, dilapidated, and forgotten areas of the city. On some blocks — like St. Patrick, Gunston, and Houston Whittier — house after house had illegal hookups. Dozens of DTE top boxes also were on display. “Some of these places, we have to come back time and time again to shut them off,” Butts notes.

This is the battleground — back yard after back yard — where rusty, junked-out cars, tires, mattresses, debris, and waist-high weeds bear witness to illegal hot wires dangling off light poles. This is also the turf where Butts and his crew are battling the “fixers,” the street term for people who climb poles to install fishhooks or tamper with meters. The standard fee for a single electrical hookup is $50, and fixers advertise their services not only by word of mouth, but also by brazenly posting them in neighborhood markets and liquor stores. “Some of these guys will charge someone $50 for an (electrical) hookup, and then call us to report it. We come out and shut if off, and they go back and charge another $50 to hook up the house again,” Butts says.

With large identity cards dangling over their blue company shirts, Butts and Johnson spend their days patrolling alleys for jerry-rigged hookups. In some cases, people appear out of nowhere to see what they’re up to before quickly melting away.

Those who stick around invariably profess they had no idea a utility feed was illegally provided. Though skeptical, Johnson agrees with some of the residents. “All they know is they moved in and paid their rent,” he explains. “The landlord is the one who hooked it up.”

Often caught in the middle of disputes, DTE investigators take the narrow line. “The (landlords) will advertise units for rent with utilities included, knowing full well they’re stealing [power]. The tenant is in a hard place, because the landlord will turn around and say it must be the tenant’s fault, as they try to absolve themselves of all responsibility,” Johnson says.

 

The Green Mile

Elizabeth Sammut, a 43-year-old landlord who controlled more than 100 rental properties in Detroit, was fond of rigging gas and electricity lines until she was caught last year. According to court records, Sammut’s maintenance man, Jeffery Johnson, 49, was her fixer, rigging meters at every property she acquired. He proved to be quite adept, stealing incremental amounts of gas and electricity to avoid raising the suspicion of DTE. The crime wave was spread out over 10 years.

In a plea bargain with Wayne County prosecutors involving 10 properties, the pair pleaded guilty to two, four-year felonies for utility fraud and malicious destruction of utility property. They also pleaded guilty to conducting a criminal enterprise, a 20-year felony.

On May 4, Judge Daniel J. Ryan sentenced the pair to five years probation and ordered them to wear tethers for 60 days. Sammut also was ordered to pay DTE a minimum restitution of $100,000. She may have to pay more if the court determines the six-figure fine is too low.

In another recent case, a 50-year-old fixer named Donald Anthony Brant was arrested and charged with four counts of utility fraud over $500, and four counts of malicious destruction of property involving the rigging of meters on commercial buildings. That was only part of his story.

Johnson says Brant was responsible for rigging meters at 16 Coney Islands across the city. In all, 50 downtown businesses saw their gas and electric bills cut by 30 percent to 50 percent, thanks to Brant — cheating DTE out of more than $1 million over several years.

For Brant, this was his second time around. He was arrested and charged in 2008 with two counts of meter-rigging. The record shows he pleaded guilty to utility fraud over $500, while a charge of malicious destruction of property was dropped as part of a plea bargain.

Wayne County Circuit Court Judge Edward Ewell Jr. sentenced Brant to two years probation and $4,000 in restitution. Brant was still on probation when he was arrested the second time in the case involving the Coney Islands.

Court records indicate prosecutors added the felony charge of habitual offender after the second arrest, which could have earned Brant a long prison term. However, Brant was released on a personal bond of $15,000. What’s more, the case was dismissed in mid-June at the request of a Wayne County prosecutor. There was no explanation on the docket specifying why the case was dropped. Four days later, Brant made a payment of $400 toward his $4,000 restitution from the first case. Records from July 12 show he still owes $940.

Johnson says as part of DTE’s stepped-up response to energy theft, every incident now triggers a search for a property owner or taxpayer to bill for the thefts. But finding a responsible person can prove difficult, as property taxes are sometimes years in arrears. “We have $40 million of theft billed to less than half the illegal sites we find,” Johnson says. “We try to be aggressive in recovering theft monies that would be charged to other ratepayers.”

In his role as an investigator, Butts is part social worker and part confidant to people he is trying to dissuade from stealing power. Recently, while he was investigating an incident where someone had dug a hole to intercept a gas line in a stripped-out home, a man in a rental van drove up with furniture to move into the house.

“Literally, he was moving into a shell. This place was so bad. I asked him if he had just bought this house and had intended to fix it up,” Butts recalls. “I could understand if you bought it and it was in this bad a shape and you wanted to fix it up.

“There were no pipes in the place, the wires were cut. This place was terrible, and he was ready to move his furniture in there,” Butts says. “You talk about desperation; boy, this was it.”

Butts convinced the man to try to get a refund for the rent he had paid and find another place to live.

At another stop behind an apartment building at Nottingham and Whittier, Butts found himself surrounded by two women and a man who demanded to know if he was going to shut off the power. After assuring them he would not, one of the women hugged him. A few minutes later, she showed him a shut-off notice and relayed that she was doing all she could to work with the recalcitrant landlord and DTE to keep the power flowing legally into the building. Butts responded that he would make sure the power stayed on. “I don’t have to pay his bill, do I?” she pleaded.

Following his inspection, Butts determined that 10 of the 16 apartments in the building had hijacked meters. “This one is like a weekly project. We’ve been coming back out here, over and over, for a year,” he says. Across the street, another 11-unit building showed the same evidence of meter-tampering, with only three units legally hooked up for electric power.

Former Detroit Public School employee Anton V. Carter owns both buildings. Carter pleaded guilty earlier this year to conspiring with Toni D. Gilbert, a school district payroll manager, to issue $378,765 in payroll checks to him, even though Carter was on a disability retirement from the district and was already receiving disability checks. Carter, 56, was to face an August sentencing. Both are facing sentences of up to 10 years in federal prison, and fines of up to $250,000.

“We do everything we can to help people get properly hooked up,” Johnson says. “We’re active in churches, in outreach programs, and we spend $119 million (partly from ratepayer donations) in aid to those needing help with energy costs. Anyone stealing is not trying to get help.” db

To report suspected energy theft, call DTE Energy at 800-441-6698.

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