Prosecutors have now spent several days telling jurors that Kwame Kilpatrick blew money from his nonprofit group on golf clubs, yoga lessons, lavish trips, summer camp and other personal perks. The expenses defrauded donors and Kilpatrick committed mail and wire fraud in Civic Fund dealings, prosecutors say.
Wednesday was no exception, as prosecutors rebutted a key defense point, suggesting Kilpatrick’s twin boys were enrolled at a preschool in 2002 when nonprofit money paid for their schooling.
From there, a realtor testified Kilpatrick’s nonprofit group spent $12,800 leasing a luxury condominium for the ex-mayor’s family after he resigned in fall 2008.
Also, an investment banker urged his firm to stop donating money to Kilpatrick’s nonprofit group in 2008. Investment banker Fred Prime said his firm Loop Capital stopped donating after giving the Kilpatrick Civic Fund a total of $40,000 in 2006 and 2007.
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Kwame Kilpatrick and lawyer James C. Thomas outside federal court Wednesday.
Prosecutors rebutted another Kwame Kilpatrick defense alibi Wednesday regarding a Colorado resort trip the ex-mayor took with his former mistress Christine Beatty in 2002.
Last week, Kilpatrick attorney James C. Thomas suggested the real purpose of a resort stay in Vail, Colo., was for Kilpatrick to attend a meeting of the National Council of Mayors about 97 miles away in Denver.
The News reported last week that the group doesn’t exist. After The News’ report, prosecutors subpoenaed records to verify Kilpatrick’s alibi.
Prosecutors today called an IRS agent who investigated the alibi. The agent couldn’t find such a group.
There is, however, a U.S. Conference of Mayors based in Washington, D.C. The group lists its annual and winter meetings for each year going back to 1998.
The group held its annual meeting in Denver, but in 2003, according to the group’s website.
The agent also subpoenaed the event schedule for the National Conference of Democratic Mayors.
The group is legit, but did not meet in Denver in 2002, when Kilpatrick and Beatty were staying at the resort.
On Wednesday, Thomas suggested the ex-mayor had a private meeting with the mayor of Denver or the former head of the U.S. Conference of Mayors.
Wellington Webb was Denver mayor in 2002 and is a past president of the U.S. Conference of Mayors.
“Do you think after this you might call the mayor’s office and find out what happened?” Thomas asked the IRS agent. “We’ll see.”
Prosecutors scored an eagle Wednesday after questioning in the Kwame Kilpatrick corruption case veered into talk about golf.
First, Kilpatrick lawyer James C. Thomas asked a donor to the ex-mayor’s nonprofit group about whether he golfs with clients — an apparent reference to the Nike golf clubs purchased for the mayor by the Kilpatrick Civic Fund.
“Occasionally,” said Fred Prime, whose firm Loop Capital donated $40,000 to the Civic Fund nonprofit.
The golf clubs were the latest in a series of purchases prosecutors allege were improper. Prosecutors say Kilpatrick Civic Fund donors were defrauded because Kilpatrick spent donations on personal expenses, including golf clubs, summer camp, hotels and trips.
Thomas suggested the golf clubs were a legitimate expense and helped Kilpatrick entertain Civic Fund donors.
Prosecutors pounced after Kilpatrick’s lawyer finished questioning Prime.
“Did Loop purchase your golf clubs?” Assistant U.S. Attorney Eric Doeh asked.
“No,” Prime said.
Kwame Kilpatrick outside federal court Wednesday.
An investment banker urged his firm to stop donating money to Kwame Kilpatrick’s nonprofit group in 2008 — the year the mayor’s career derailed amid a text-message scandal.
Investment banker Fred Prime said his firm Loop Capital — which had city business — stopped donating after giving the Kilpatrick Civic Fund a total of $40,000 in 2006 and 2007.
Prime made the decision after consulting with his firm’s compliance officer.
“It didn’t pass our compliance process,” Prime testified.
Defense lawyers objected to the questioning, and Prime was blocked from talking about the news reports or explaining his firm’s decision.
Prime’s testimony came as prosecutors continued bringing in financial advisers who testified about donating money to Kilpatrick’s nonprofit group.
Donors testified Tuesday that Civic Fund checks were sent via the U.S. mail, which addresses a key charge in the Kilpatrick indictment. Along with racketeering, extortion, bribery and tax charges, Kilpatrick is facing 13 counts of mail and wire fraud — 20-year felonies.
Prime said his firm’s checks were mailed from Loop’s corporate office in Chicago.
Prime told ex-Detroit Treasurer Jeff Beasley about his firm’s decision.
Jim Papas
Beasley, the ex-mayor’s fraternity brother, was indicted earlier this year in connection with an FBI probe of the city’s pension funds. He is awaiting trial in federal court.
In total, Prime’s firm wrote four checks to the Civic Fund. Some of the checks were made out to the fund and Greektown business mogul Jim Papas.
Papas co-owns the Atheneum Suite Hotel and held a fundraiser for Kilpatrick’s nonprofit group. He also provided office space for the ex-mayor’s fundraiser, Emma Bell, according to testimony.
Until The News started asking questions last month, Kilpatrick was staying at the Atheneum.
Kwame Kilpatrick leaves the Atheneum Suite Hotel on Sept. 6 and gets into one of the hotel’s vans. Kilpatrick, who has said he is broke, had been staying in early September at the hotel where rooms start at $180 a night.
Victor Mercado
A lawyer for former Detroit water boss Victor Mercado denied speculation Tuesday that his client has reached a plea deal with federal prosecutors.
Lawyer John Minock said there is no deal, which was speculated because his co-counsel Martin Crandall was not in the courtroom today.
“That’s incorrect,” Minock told The News.
A plea deal is not even on the radar, he said.
Crandall is reviewing documents from the government that were not previously available. The documents pertain to federal court oversight of the Detroit Water and Sewerage Department, Minock said.
In the corruption case, Mercado is accused of steering contracts to Bobby Ferguson, lying during a federal investigation into one city contract, pocketing a $240,000 salary and hiring a private company to sweep his offices for listening devices, prosecutors allege.
He faces up to 20 years in prison if convicted of racketeering conspiracy, extortion and obstruction of justice.
Mercado’s lawyers have said he was not a member of Kilpatrick’s inner circle and was a victim of Kilpatrick’s criminal racket.
A realtor testified Kwame Kilpatrick’s nonprofit group spent $12,800 leasing a luxury condominium for the ex-mayor’s family after he resigned in fall 2008.
Aaliyah Salaam said she showed the mayor and his family a Riverfront Towers apartment before the family leased a condominium in The Park Shelton building in Midtown in September 2008.
The six-month lease cost $17,500.
Three Kilpatrick Civic Fund checks paid for part of the rental and security deposit, Salaam testified. Kilpatrick paid $4,700 from his personal account in September 2008.
“Did you have any idea what the Civic Fund was?” Assistant U.S. Attorney Eric Doeh asked the realtor.
“No,” she said.
Kilpatrick leased the condo before he was sentenced to four months in the Wayne County Jail on obstruction of justice charges.
“He wanted interim housing because he was going away, and he wanted his family close,” she said.
“Going away. That’s a euphemism,” Kilpatrick lawyer James C. Thomas told her minutes later. “He was going to jail.”
Christine Beatty and Kwame Kilpatrick
Kwame Kilpatrick’s nonprofit group got a $75,000 infusion from a key donor around the time the mayor’s ex-mistress got a $110,000 payday, according to testimony.
The donor? Bobby Ferguson’s demolition company.
Prosecutors showed two checks from the Kilpatrick Civic Fund in March 2008. Around that time, Ferguson Enterprises Inc. cut a $75,000 check to the fund.
Prosecutors suggested Ferguson funded the payout to Christine Beatty’s consulting firm, a claim attacked by Ferguson’s defense lawyer Gerald Evelyn.
“You’re not saying the check from Ferguson Enterprises was for the purposes of” paying Beatty’s firm, Evelyn asked IRS Special Agent Ron Sauer.
“Directly, I can’t show that check correctly funded the check to Maiyen Consulting,” Sauer said.
Prosecutors are trying to convince jurors Kilpatrick defrauded donors by spending Civic Fund money on personal expenses and committed mail and wire fraud.
Ferguson’s lawyer said around the time Ferguson donated $75,000 to the Civic Fund, there was another big donor check.
Detroit computer software giant Compuware gave $50,000, Evelyn said.
Compuware co-founder Peter Karmanos Jr. and other businessman gave Kilpatrick $240,000 in loans following the text-message scandal in February 2009.
Kilpatrick was supposed to start repaying those loans in November 2010. As of January, he hadn’t made a single payment.
After resigning as mayor, Kilpatrick was making $120,000 a year as a salesman for a division of Compuware until 2010. He was fired after Wayne County Judge David Groner put him back behind bars for violating probation by hiding assets that could have been applied to the $1 million restitution he agreed to pay the city.
Kwame Kilpatrick and his family
Prosecutors rebutted a key defense point Wednesday, suggesting Kwame Kilpatrick’s twin boys were enrolled at a preschool in 2002 when nonprofit money paid for their schooling.
IRS Special Agent Ron Sauer testified about two Kilpatrick Civic Fund checks issued in 2002 to A Step Ahead pre-scshool, where the ex-mayor’s twin sons attended.
One $156 check from his personal account paid for his sons’ trip to Cedar Point, the agent testified. And a $5,000 Civic Fund check paid for graduation week activities in 2002, including a party tent.
“Do parents contribute large checks in that range?” Assistant U.S. Attorney Michael Bullotta asked the school’s co-owner Linda Byrd.
“I cannot recall one,” she said.
Jelani Kilpatrick
She said the $5,000 check was hand-delivered by the ex-mayor’s wife, Carlita Kilpatrick.
Byrd testified the twins, Jelani and Jalil, graduated in June 2002.
Jalil Kilpatrick
The testimony comes a week after Kilpatrick lawyer James C. Thomas said the mayor’s sons had graduated a year earlier, in 2001, and were no longer there in 2002.
Anyway, Thomas suggested nonprofit group payments were legitimate because the Civic Fund was established to support educational and community activities.
Witness William Scott nearly set a mouth-speed record Tuesday during testimony in the Kwame Kilpatrick corruption trial.
“I’m way nervous,” the golf club salesman said after setting an auctioneer’s pace introducing himself to jurors.
He eventually slowed down.
Away from the witness stand, the defendants, including Bernard Kilpatrick, appeared cool and relaxed — for a change.
At one point, Bobby Ferguson’s lawyer Susan Van Dusen leaned over to her dapper client, who was wearing a gray suit and red tie. Not sure about the cufflinks, though he occasionally wears ones featuring the faces of famous African Americans, including boxing legend Joe Louis.
“Bernard thinks you look a Republican today,” Van Dusen cracked.
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