The first government witnesses, IRS Special Agent Ron Sauer and former bank employee Jerome Robinson, testified Monday morning in the City Hall corruption trial as prosecutors focused on former Detroit Mayor Kwame Kilpatrick’s alleged hidden finances.
They were followed by former Kilpatrick bodyguards who testified about lavish flights on a Grosse Pointe Farms businessman’s private jet to Bermuda and New York. The businessman, Anthony Soave, claims he was extorted.
Testimony resumes at 9 a.m. Tuesday.
On Friday, Assistant U.S. Attorney Mark Chutkow called Kilpatrick a luxury loving big shot who cashed in on the mayor’s office. He allegedly pocketed more than $541,000 in cash from his contractor pal and co-defendant, Bobby Ferguson, the prosecutor said during opening statements.
Here’s what Chutkow has told jurors about Kilpatrick’s finances:
Kilpatrick spent more than $61,000 on suits and used more than $282,000 to pay off his credit card bills in addition to making cash deposits totaling more than $200,000.
“As mayor, Kwame Kilpatrick no longer lived like the regular citizens he governed,” Chutkow said.
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Grosse Pointe Farms businessman Tony Soave flew Kwame Kilpatrick and others to Bermuda and on a lavish New York City shopping trip, the former mayor’s bodyguard testified Monday.
Detroit Police Commander Duane Love testified about the trips as prosecutors tried to illustrate bribes given to Kilpatrick.
Love testified about a 2006 trip he took with Kilpatrick to Bermuda.
The trip was a “thank you” present to people who helped with Kilpatrick’s re-election.
A group that included Bobby Ferguson flew on Soave’s private jet, Love testified.
In Christmas 2006, Kilpatrick, his mistress and chief of staff Christine Beatty and Soave flew to New York City on a shopping spree, Love testified.
In an earlier court filing, Kilpatrick’s co-defendant, former Detroit water boss Victor Mercado, said Soave bribed Kilpatrick with private flights, $10,000 worth of courtside Detroit Pistons tickets and helped Beatty lease a Land Rover.
Soave, however, has said he was extorted.
“Did you ever see Mr. Kilpatrick with large amounts of money,” defense lawyer James C. Thomas asked Love.
“No,” he answered.
Kilpatrick also made his police-department bodyguards fetch his dry cleaning and ferry cash to Detroit banks to pay bills, according to testimony Monday. Love said he delivered cash to a bank for Kilpatrick at least three times.
“He was in charge,” Love testified. “He would tell me he needs me to make a bank run for him.”
Love was recruited to join the mayor’s bodyguard team in 2003 following negative media reports about other bodyguards abusing overtime and misusing city property.
Kwame Kilpatrick ditched his police bodyguard several times to meet privately with contractor Bobby Ferguson, a Detroit police sergeant testified Monday.
On at least two occasions, Kilpatrick met privately with Ferguson at the contractor’s home and business in the Guardian Building, Sgt. Jefferson Travis testified.
Prosecutors have said Kilpatrick was given more than $541,000 in cash came from Ferguson, a contractor who got $60 million in city-related business because of the mayor — sometimes for doing no work at all.
“You didni’t know what was going on with Mr. Ferguson and the former mayor?” Assistant U.S. Attorney Eric Doeh asked Travis.
“That’s correct,” Travis answered.
Defense lawyer James C. Thomas asked the sergeant if he believed the mayor was involved in something nefarious with Ferguson.
“I didn’t think anything of it at the time,” Travis said.
“Did you ever see Bobby Ferguson with large amounts of cash,” Thomas asked.
“No,” Travis replied
“Ever see him hand Kwame Kilpatrick money?” Thomas asked.
“No,” the sergeant answered.
Travis also testified about trips he took with Kilpatrick to the 2007 Super Bowl in Miami and a private jet flight to Florida, where Kilpatrick had a home.
“Who did the jet belong to,” Doeh asked.
“Tony Soave,” Travis answered.
Kilpatrick’s co-defendant, former Detroit water Boss Victor Mercado, has said Soave bribed Kilpatrick with private flights, $10,000 worth of courtside Detroit Pistons tickets and New York City shopping sprees and helped his mistress lease a Land Rover.
Soave’s lawyer says the Grosse Pointe Farms businessman was extorted.
Thomas asked Travis about the long-rumored Manoogian Mansion party. The lawyer asked if the party ever occurred.
“Not that I’m aware of,” Travis said.
“Move on,” U.S. District Judge Nancy Edmunds snapped.
“Was he a partier?” Thomas asked.
“No sir,” Travis said.
“Was he a drinker,” the lawyer asked.
“No sir,” Travis said.
A former bank employee testified Kwame Kilpatrick and a city employee made cash payments on the former mayor’s $15,000 personal loan, often with $100 bills.
J. Diane Dixon, a former First Independence Bank employee, testified Kilpatrick obtained a $15,000 loan in 2007. He made regular payments in cash at the bank’s main branch in Detroit, Dixon testified.
Prosecutors are trying to show Kilpatrick had access to large amounts of cash that didn’t come from his paycheck as mayor of Detroit.
Prosecutors have more than $541,000 in cash came from Bobby Ferguson, a contractor who got $60 million in city-related business because of the mayor — sometimes for doing no work at all.
In September 2008, Kilpatrick made three cash payments on a single day.
The payments ranged from $492 to $2,000, all in $100 bills, Dixon testified.
“It didn’t look like he was hiding anything when making these payments,” defense lawyer James C. Thomas asked.
“No,” Dixon said.
Once or twice a month when he was mayor, Kwame Kilpatrick would enter First Independence Bank in downtown Detroit with $3,000 stuffed in his pocket, a former bank employee testified Monday.
Kilpatrick visited the bank to make credit card payments, said Jerome Robinson, a former bank employee.
Robinson was the second witness to testify during the City Hall corruption trial, during, which prosecutors focused on the former mayor’s finances and banking activity.
Testimony Monday showed Kilpatrick had access to large amounts of unaccounted for cash.
“Would he hand the money to you from his pocket, or was the money in an envelope?” Assistant U.S. Attorney Eric Doeh asked bank employee Jerome Robinson.
“He’d hand it to me from his pocket,” Robinson testified, adding the money was usually in $100 bills.
One time, Kilpatrick had his bodyguard — an on-duty police officer — bring in the credit card payment, Robinson testified.
Kilpatrick sat impassively at the defense table while Robinson testified, resting his head on his right fist.
Under cross examination by Kilpatrick lawyer James C. Thomas, the bank employee said he didn’t consider the cash payments unusual.
Kwame Kilpatrick never deposited any money into his credit union account before being elected mayor of Detroit in 2002, an IRS agent testified Monday.
“Not a dollar? Not a dime,” a prosecutor asked IRS Special Agent Ron Sauer.
“No cash deposits at all,” Sauer said.
That all changed in 2002.
Kilpatrick deposited more than $531,000 in cash into a web of bank accounts stretching from Detroit to Florida, the agent testified.
The money was on top of Kilpatrick’s salary as mayor.
The agent noticed another change after Kilpatrick was elected mayor.
“Once Mr. Kilpatrick became mayor, the frequent cash withdrawals changed,” Sauer said. “It stopped.”
Investigators also learned about cash stashed in a shoe at the Kilpatricks’ house.
Under cross examination, Kilpatrick lawyer James C. Thomas asked if the cash deposits could have come from income earned by the former mayor’s wife, Carlita Kilpatrick, and saved over time.
“I don’t believe she was operating a cash business,” Sauer said.
“That’s not what I asked,” Thomas snapped.
Thomas also suggested the mysterious income could have been given over time to Kilpatrick as a gift.
For instance, Kilpatrick’s staff collected money and bought the mayor a Rolex watch, according to courtroom testimony.
Kilpatrick’s lawyer asked if it was possible for someone to accumulate money over time and store it in a shoe box.
“It depends on how big the shoes are,” Sauer said.
“Well, this guy’s got big feet,” Thomas said.
The IRS launched the City Hall corruption investigation in March 2006 to probe bribery allegations against Kwame Kilpatrick.
IRS Special Agent Ron Sauer took the stand Monday and pinpointed the start of an investigation that ultimately led to a grand jury indictment in June 2010.
Sauer subpoenaed bank records, questioned Kilpatrick’s bodyguards and reviewed tax returns to figure out which banks Kilpatrick used.
The IRS obtained also subpoenas for Kilpatrick’s account at First Independence Bank. Sauer said Kilpatrick made $282,000 in cash payments on a credit card between 2002 and 2008.
“What were you looking for?” Assistant U.S. Attorney Michael Bullotta asked the agent.
“Indications of unusual financial activity to get an understanding of the financial activity of Mayor Kilpatrick and others,” Sauer testified.
The IRS learned Kilpatrick’s payroll check was direct deposited into accounts at JPMorgan Chase. There also were mysterious, and regular, cash deposits, Sauer testified. The deposits ranged from $500 to $8,600 and totaled $194,000 — additional cash not from his paycheck.
“The city was not paying him in cash, correct?” the prosecutor asked.
“Correct,” Sauer said. “Mr. Kilpatrick did not have a source of cash we could identify.”
“And when did these payments stop,” Bullotta asked the agent.
“Late 2008,” said the agent, which is when Kilpatrick resigned as mayor.
A lawyer claimed Derrick Miller, a key government witness in the City Hall corruption case against ex-Mayor Kwame Kilpatrick, was being protected by federal officials in an undisclosed location — and then promptly withdrew the allegation in a court filing.
Jerome Watson, an attorney at Detroit law firm Miller Canfield, yanked the allegation Sunday hours after being contacted by The Detroit News.
Watson wrote in a federal court filing Friday that Miller was being protected at a distant location because he is a witness in a “high profile criminal prosecution.” Miller’s lawyer denied the allegation.
The conflicting reports raised questions about Miller’s safety after reaching an agreement to testify against Kilpatrick, his childhood friend and former boss.
Speculation about Miller’s whereabouts emerged in connection with a civil lawsuit involving Miller, Kilpatrick and others. The city of Detroit has tried unsuccessfully to serve Miller with a court summons since May but has been unable to find him.
“An investigation … concluded that defendant Miller is under some form of federal protection – whether formal or informal – in a distant location, as he is a key witness in a high-profile criminal prosecution,” wrote Watson, who is representing the city of Detroit in a sewer lawsuit against Kilpatrick, Miller and others.
Miller, who moved from Detroit to Falls Church, Va., after leaving the Kilpatrick administration, is not under federal protection, his lawyer said.
“That’s not true at all,” defense attorney Byron Pitts said. “Whoever said that doesn’t know what they’re talking about.”
The U.S. Marshals Service is responsible for protecting government witnesses. The U.S. Marshals Service provides 24-hour protection to witnesses before and during trials.
“The United States Marshals Service does not comment on the matter of witness security nor identify anyone who may or may not be a participant,” Marshals Service spokesman Matt Batcheller said Sunday.
Miller, 42, is expected to testify against Kilpatrick in federal court as the first witnesses take the stand in the corruption trial. He was an original member of the alleged Kilpatrick Enterprise, and allegedly gave Kilpatrick a $10,000 powder-room payoff, but later pleaded guilty and agreed to cooperate with the feds.
His cooperation is expected to help prosecutors secure potentially damaging testimony from a former member of Kilpatrick’s inner circle.
Co-defendant Bernard Kilpatrick’s lawyer John Shea was unaware of any threats against Miller.
“No, absolutely not,” Shea said Sunday. “This is the first I’ve heard of any sort of federal protection or that anyone is concerned about threats or anything like that with respect to Derrick. The last thing anybody in this case needs is stuff like that. Is Derrick Miller an important witness? Yeah. But is he the most important witness? Is he the witness the whole case is going to turn on? I don’t think of any witness like that.”