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Former Director of Cobo Conference/Exhibition Center in Downtown Detroit Pleads Guilty to
 Accepting a $100,000 Kickback from a Convention Center Contractor
By David Ashenfelter and Jim Schaefer, Detroit Free PressMcClatchy-Tribune Regional News

Aug. 8, 2008 --The former director of Cobo Center pleaded guilty Thursday in federal court to accepting a $100,000 kickback from a convention center contractor, the first guilty plea in a widening city government corruption probe.

"I had a responsibility not to do that," Efstathios Louis (Lou) Pavledes, 54, told U.S. District Judge Marianne Battani of the money he said he accepted from Karl Kado, 67, of West Bloomfield. "I made an error in judgment."

Pavledes pleaded guilty to one count of making structured financial transactions -- making 10 bank deposits of less than $10,000 each -- to avoid federal currency reporting requirements. The charge carries a maximum penalty of 5 years in prison and a $250,000 fine.

Asked by the judge whether the money represented a kickback, Pavledes said, "Yes."

Under the terms of his plea agreement with the U.S. Attorney's Office, Pavledes faces the prospect of 18 to 24 months in prison and a fine of up to $40,000. Assistant U.S. Attorney Mark Chutkow told the judge that the government could recommend 11 months depending upon Pavledes' cooperation with federal agents.

There was no immediate comment from Kado's lawyer. Kado was charged Wednesday with filing false income tax returns in 2003 and 2004. No court date has been set.

Pavledes' plea agreement said he accepted the money from Kado, owner of Metro Services Organization, from Jan. 13-28, 2003. He is believed to have accepted about $200,000 from Kado.

Pavledes ran Cobo for nine years until Detroit Mayor Kwame Kilpatrick fired him in April 2004 for reasons never fully explained.

Pavledes said he deposited the cash into a bank account in installments ranging from $9,600 to $9,900.

The FBI and the Internal Revenue Service began investigating Pavledes after receiving complaints from conference organizers who were upset about increased prices for Kado's services at Cobo.

Battani set a Dec. 4 sentencing date, although Chutkow said that date could be postponed based on Pavledes' cooperation. Pavledes is free on a personal bond.

"To this point, he had been a completely law-abiding citizen," Pavledes' lawyer, Craig Tank of Clinton Township said after the hearing.

Tank said Pavledes gave in to temptation to readily available money. Asked about the federal corruption probe, Tank said: "It's larger than any other corruption case that I've been aware of in the past 10 years of practicing law in eastern Michigan."

Contact DAVID ASHENFELTER at dashenfelter@freepress.com.

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