Hall of Shame: Detroit Children's Hospital charity cheated by Bay Area 'big shot'

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A Detroit charity paid $58,000 to a California business, but it later vanished.

The business' CEO Greg Richey didn't disappear and Rob Wolchek went to the west coast to track him down.

I guess $58,000 is nothing to Greg Richey.  He's a big shot. He lives in the San Francisco bay area, drives a BMW, eats out at fancy French restaurants and even plays in a band.

Greg's the CEO for a company that makes interactive hospital video walls. But it seems Mr. Video Wall has walled himself off from the people that matter.

This is Children's Hospital in Detroit, where sick children get chemotherapy, dialysis and surgery.  It's a place where scared parents bring their children, hoping for the best and sometimes hearing the worst.

So when Children's made plans to open a new satellite hospital in the suburb of Troy, they wanted it to be special.  A building designed to look like LEGO blocks with a video screen entryway that would thrill and distract the most nervous little patient.

"The hospital asked if the foundation could fund these interactive walls so kids could get their minds off of why they're coming here," said Matt Friedman.

Matt Friedman runs the Children's Hospital of Michigan Foundation, a charity he managed to get $60,000 in donations for the interactive video wall, which is kind of like a giant iPad.

"A company called Kenesis out of San Francisco was hired to complete the work," Friedman said. "Kinesis had built walls like this for other leading children's hospitals around the country."

Kinesis was run by Greg Richey.  And what an impressive resume Richey has.  He's a Yale graduate and a doctor of law.  He's been a CEO, a COO and CFO for a bunch of important sounding companies.

Children's Hospital of Michigan President Luanne Thomas-Ewald thought they were in good hands.

"As far as we knew, the project was proceeding," Ewald said. "We had seen designs, they had shown us concepts and we were assuming they were working on those concepts and designs."

The charity funding the project was mailing checks to San Francisco regularly as phases were progressing in early 2015.  They were promised by Greg
Richey, Kinesis would be out there by November, 2015 to install the video wall -- in time for the grand opening of the new hospital a few months later.  

The charity sent their final check to Kinesis in August of 2015.

"Kinesis was no longer responsive," Friedman said.

"We had no idea what happened to them, what happened to the money or what happened to our project more importantly," said Ewald.

"This is a company that literally disappeared in the middle of the night," Friedman said.

And that's pretty much what Kinesis' landlord says as well.

"They just walked out," Mark Sackett said.

Sackett owns the building where Kinesis rented space in San Francisco.  In July of 2015 he says Kinesis was on the rocks.

"I said 'Look, make the payment,' he said 'We're not going to make the August payment so I said you have to leave. You're being evicted."

Wolchek: "And you said this to Richey?"

"Yes. To Greg Richey," Sackett said.

Mark says Richey and his crew grabbed everything of value and bailed out, owing him $80,000.

Wolchek: "He's never said I'm sorry or anything?"

"I never heard from him again," Sackett said. "The only time I've ever heard from him after he walked out the door and basically had a garage sale with all his employees, was when he wanted to get these two checks that came."

Richey did show up to the closed business to get checks. One of them being the $18,000 check from Children's Hospital of Michigan.

No one from Kinesis had ever bothered to call the hospital; they didn't know what had happened.

What was Greg Richey doing at the time? Greg started a little band and can be found jamming with his crew looking for YouTube followers.

And online Greg Richey was out on the town in San Francisco.  He posted: "Nice evening out at a rare restaurant that actually knows how to make cassoulet.  The very voluble, very French proprietor took this photo for us."

"This is a person who literally stole money that was supposed to benefit the health of the children of Michigan," Friedman said.

In February, the Troy Children's Hospital opened on time.  The foundation got more donations and managed to put together a smaller video wall using a local company.   

But they never got over losing $58,000 to Greg Richey's company.

Richey is two thousand miles away in San Francisco.  He's not worried about anybody from Detroit coming after him.

Bad news Greg.  We've got a TV station in the Bay Area as well and they were happy to lend me a crew.

Wolchek: "Some of the people in Detroit want to know from Children's Hospital how come you didn't tell them you guys were shutting down?”

Richey: "I believe things were communicated to clients so that's all I'm going to say about that."

Wolchek: "No.  They weren't communicated at all."

Richey: "Well I'm sorry I don't have any more to say on this subject."

Wolchek: "Well why don't you talk to me for a minute.  Look I came all the way out here from Detroit because you took $58,000 to do those projects and you didn't do them - and you didn't even tell them."

Richey: "I'm afraid that's all I can tell you right now, I'm sorry."

Greg rushes back to his condo in the San Francisco suburb of San Rafael.  I wait outside but he never comes back out.

The next morning I return.

"I just sent you a long email," Richey said. "That should answer all your questions thank you."

So, I stand in the parking lot and check my email.

"Well, I don't see any emails from him," Wolchek said.

Back to the door.

Wolchek: "I don't have any email from you."

Richey: "This is the email I just sent you. I'm getting dressed to leave to try to get a job because I'm unemployed. "

Wolchek: "I'm just showing here, I don't have an email."

Richey: "I don't know why you don't have it. I'll print it out and give it to you. I'm getting dressed to leave because I'm trying to get a job."

Wolchek: "Why don't you just explain to me why."

Richey: "I did explain everything right here."

Door slam.

Wolchek: "So if you get the job today are you going to pay back some of the money?"

Richey: "I'm not reliable for that. I'm broke and I'm in thousands of dollars in debt."

Wolchek: "I thought you were a big, hot shot CEO and everything."

Richey: "There are thousands of companies, small tech companies that go out of business all the time.  Most of them, 80 percent.  It's a tragedy for everybody involved. I've lost everything, my house, I'm unemployed."

Wolchek: "You filed for bankruptcy even before you went to Kinesis."

"That was before ..."

Wolchek: "So you didn't really have any business running that company taking money from charities like that."

I found out  Greg Richey filed for Chapter 7 personal bankruptcy in 2012, and wrote off more than $400,000 in personal debt - right before taking over as CEO of Kinesis and running that company into the ground.

Wolchek: "You picked up a check in August of last year after you knew your business was going under.  A check from the Children's Hospital of Detroit foundation for $18,000 and you guys were already out of business.  You knew it."

Richey: "We thought we were about to close a deal that was going to save us.  I'm sorry."

With that, the poor guy drives off in his BMW to find a job or perhaps, out to a restaurant that serves up a mean cassoulet.

Hey Greg Richey. I got a San Francisco treat for you and it's not Rice-A-Rona.  You're in the Hhhhall of Shame.

In the email, Richey thought I was a scam bill collector and claims his company went under due to a lack of business. He says he tried to sell the company but nobody would buy it or finish the projects. He claims he finished some projects and those clients were happy.

The people at Children's Hospital never got anything from Richey and they got no explanation where the money to buy equipment, went.