Hangar42 developer arraigned over fraud

GRAND RAPIDS, Mich. (WOOD) - Jack Buchanan Jr., the man behind the Hangar42 movie studio project in Walker, was arraigned Wednesday on two new felony charges filed by the Michigan Attorney General's office.

He is now charged with attempted felony fraud and conspiracy.

The state alleges Buchanan conspired to fraudulently get a $10 million tax credit for the state, based on a $40 million sale price for the Hangar42 building to local businessman Joe Peters.

But no such sale took place, the state said, adding Buchanan oversaw the creation of a phony land contract and orchestrated an inflated appraisal to puff up the property value to get the $10 million credit.

In an affadavit filed in court, the investigator for the Michigan Attorney General said he got hold of a contract between Buchanan and a Rhode Island company that buys tax credits.

If Buchanan Jr. and his alleged co-conspirator, Joe Peters, had succeeded in getting the $10 million credit, the Rhode Island company would have turned it into an immediate $8.7 million payment.

When Peters couldn't produce the proper documentation for the investment, the state film office denied the application.

Peters is also charged.

Buchanan turned himself in to authorities early Wednesday. He was released on a personal $5,000 bond. Peters is also free on bond.

They're scheduled for a preliminary hearing Feb. 3. If convicted, Buchanan and Peters each face five years in prison.