Federal prosecutors continued probing $800,000 in state grants funneled by Kwame Kilpatrick to nonprofit groups linked to his pastor and close friend Bobby Ferguson.
Four witnesses talked about about how Ferguson’s group spent $250,000. The grant bankrolled an extreme makeover of Ferguson’s offices in Detroit and was used to buy a decrepit Detroit house, according to testimony Monday.
So far, there’s no telling if the testimony will top Week 1. Witnesses — including a celebrity jewelery salesman — talked about money socked away in a sack, in shoes and in a vacuum cleaner.
Ferguson, Kilpatrick, his father Bernard Kilpatrick and former Detroit water boss Victor Mercado face multiple charges including racketeering, extortion, bribery, tax evasion and obstruction of justice and face up to 20 years in prison.
Prosecutors believe the men conspired to squeeze city-related contracts for millions of dollars.
Testimony has ended for today. We’ll be back at 9 a.m. Tuesday.
Live Updates Ended
Please read below for an archived view of this event.
The first thing Bobby Ferguson’s nonprofit group did after getting a $250,000 state grant was give a $100,000 cut to Carlita Kilpatrick.
An IRS special agent testified Kilpatrick’s company U.N.I.T.E. received the $100,000 wire transfer in December 2000. That was two months after Ferguson’s group received the grant money, which was steered to it by then-state Rep. Kwame Kilpatrick.
Prosecutors allege Ferguson’s group Detroit Three Dimensional Community Development Corp. misspent state grant money meant to aid seniors and needy children.
In all, Carlita Kilpatrick received $137,500 in state grant cash, prosecutors allege. Her husband pressed state officials to award $800,000 in grant money to Ferguson’s nonprofit and a group run by his pastor, Bishop Edgar Vann.
Bobby Ferguson
A man who lived next door to a Detroit duplex purchased by Bobby Ferguson’s nonprofit group with money from a state grant testified Monday the house wasn’t a training facility or a shelter for seniors — it was a dump.
Government witness Martin Jolly refuted suggestions from Ferguson’s lawyer that state grant money was spent turning the duplex into a training facility or a shelter.
House at 19791 Meyers in Detroit.
Jolly lived next door to the unit at 19791 Meyers, which Ferguson’s nonprofit group purchased for $25,000 in approximately 2001. The house was purchased with money from a $250,000 grant steered to the nonprofit group by Kwame Kilpatrick.
Prosecutors have used the house to illustrate how Ferguson’s nonprofit group misspent state grant money intended to benefit seniors and children.
“The plumbing was plugged up, the roof was bad and somebody poured cement down the drain,” Jolly testified.
“Did you ever see senior citizens coming in and out,” of the home? Assistant U.S. Attorney Mark Chutkow asked Jolly.
“No,” Jolly testified.
“Did you ever see young people or runaways?” the prosecutor asked.
“No,” Jolly answered.
The unit largely was vacant and uninhabitable, Jolly testified.
Jolly bought the duplex from Ferguson’s nonprofit group in 2005 for $50,000 — double what Ferguson’s group paid years earlier with state funds.
IRS Special Agent Ron Sauer followed Jolly to the stand and testified the money from the sale was deposited into a bank account for Ferguson’s excavation company, not the nonprofit group.
A cashier’s check from the proceeds was later cashed by Ferguson, the agent testified.
Didn’t Ferguson have the right to make the decision about cashing the check, his lawyer Susan Van Dusen asked.
“It would be unusual for the president of a nonprofit to take funds out in his own name,” Sauer testified.
U.S. District Judge Nancy Edmunds
U.S. District Judge Nancy Edmunds appears concerned about a female juror who appeared to have fallen asleep Monday for the third consecutive day of testimony.
Lawyers had a quick sidebar with the judge at approximately 10:50 a.m. after the juror appeared to be sleeping. The juror also appeared to have fallen asleep on Thursday and Friday.
The juror nodded off Monday while a contractor hired by Bobby Ferguson testified about apparently bogus bills for work renovating Ferguson’s offices in Detroit.
It’s unclear whether the juror will be dismissed from the 12-member panel. If so, she could be replaced with one of six alternates.
Testimony is only in the second week of what is expected to be a four-month trial.
Update: The judge held another quick sidebar with lawyers but did not address the juror in open court when testimony resumed at 11:25 a.m.
Kwame Kilpatrick’s name is synonymous with Detroit, politics, text messages and scandal.
But back in 2001, before Kilpatrick was elected mayor, his name recognition was minimal.
“What’s a Kwame?” contractor Robert Murray remembers asking Bobby Ferguson.
Murray, president of a Royal Oak firm, was hired to perform an extreme office makeover at Ferguson’s digs in Detroit. Ferguson showed up one day with Kilpatrick campaign signs.
Murray was stumped. Ferguson told him who Kilpatrick was and said he hoped to land contracting work when Kilpatrick wins the 2001 mayoral election.
Contractor Bobby Ferguson, left, with lawyer Gerald Evelyn.
Bobby Ferguson bankrolled an extreme office makeover by using part of a $250,000 state grant steered to his nonprofit group by his pal Kwame Kilpatrick, prosecutors alleged Monday.
The $71,500 makeover at Ferguson Enterprises Inc. included hardwood floors, marble moldings, a spiral staircase leading to a custom-designed loft inside a presidential office, a new lobby, furniture, carpet and more.
Robert Murray testified about performing the makeover at Ferguson’s offices in Detroit in 2001. He is president of Royal Oak-based Contract Design Group, a flooring and interiors contractor.
Prosecutors are trying to show jurors how Ferguson’s nonprofit group misspent state money that was supposed to benefit teens and seniors.
Defense lawyers suggested the money was spent creating a training center and shelter for runaways.
Murray did not recognize a subcontract sent by Ferguson to the state claiming the money was spent building a training center — not an office makeover.
“Did you give authorization to Mr. Ferguson to submit a subcontract describing a training center?” Chutkow asked.
“No sir,” Murray testified.
Prosecutors are showing photos inside Ferguson’s private, secure office. That’s the same office in which federal agents found a handgun during a bid-rigging investigation. The bid-rigging case ended in a mistrial and Ferguson will be retried in April — after the City Hall corruption trial.
Prosecutors flashed a series of apparently bogus bills sent by Bobby Ferguson’s nonprofit group to the state to account for a $250,000 state grant steered to the group by Kwame Kilpatrick.
The bills were purportedly from Airtec Corp., a firm that provided construction materials used to renovate Ferguson’s offices on Wyoming. The money came from a state grant awarded to Detroit Three Dimensional Community Development Corp, controlled by Ferguson.
Airtec President Christopher Boettcher was shown several bills Monday that were sent to the state but said they were not legitimate.
The company letterhead was wrong on the bills. Airtec was hired by Ferguson Enterprises Inc., not Detroit Three Dimensional.
Assistant U.S. Attorney Mark Chutkow
But the invoices sent to the state showed Detroit Three Dimensional as the client.
“Do you recognize Detroit 3D?” Assistant U.S. Attorney Mark Chutkow asked Boettcher.
“No,” he replied.
“Is that a company that you ever recall doing business with?” Chutkow asked.
“No,” Boettcher said.
The state grant money was supposed to be used providing services to seniors and teens. Instead, Kilpatrick’s wife, Carlita, was paid $100,000 and additional money was spent refurbishing Ferguson’s offices and buying a Detroit house.
Defense lawyers suggest the money was used to build a shelter and a training facility.
“Did you ever provide any training facility for Mr. Ferguson?” the prosecutor asked.
“No,” Boettcher said.
“Did you ever provide dormitory housing for him consistent with a shelter?” Chutkow asked.
“No,” the contractor answered.
A construction supplier paid with state grant money steered to Bobby Ferguson by Kwame Kilpatrick took the stand Monday in the Kwame Kilpatrick corruption trial.
Airtec Corp. President Christopher Boettcher said his firm was hired in 2001 to supply doors, frames and hardware for a renovation project at Ferguson Enterprises Inc. on Wyoming in Detroit. The building doubled as headquarters for Ferguson’s nonprofit group Detroit 3D.
The nonprofit received $250,000 in state grant money funneled by Kilpatrick during his tenure as a state Representative. Previous testimony showed Ferguson’s nonprofit paid $100,000 to Kilpatrick’s wife and spent tens of thousands renovating the Wyoming property.
The money was supposed to be spent on youth and senior programs, though defense lawyers say there were no restrictions on spending the grant money.
Defense lawyers also suggested the money was spent providing a training center and shelter.
“Did you ever provide materials for a training center or for a shelter,” Assistant u.S. Attorney Mark Chutkow asked Boettscher.
“No,” he answered.
Join the Conversation
The Detroit News aims to provide a forum that fosters smart, civil discussions on the news and events that we cover. The News will not condone personal attacks, off topic posts or brutish language on our site. If you find a comment that you believe violates these standards, please click the "X" in the upper right corner of the post to report it.