Day 28: Defense tries to chip away at 'extortion' victim

Defense lawyers spent the bulk of Monday trying to discredit a government witness allegedly extorted by Kwame Kilpatrick and close friend Bobby Ferguson.

Ferguson’s lawyer Gerald Evelyn pressed businessman Avinash Rachmale about inconsistencies between his earlier testimony and different versions told to federal agents and a grand jury in 2010.

Avinash Rachmale

Evelyn also questioned the performance of Rachmale’s company, Lakeshore Engineering Services, and escalating costs to taxpayers.

The lawyer also told jurors about government notices sent to Lakeshore about one of the company’s projects that allegedly accidentally dumped contaminated water into the Detroit River.

The Lakeshore Engineering Services founder has told jurors of $1.7-million payouts to Kilpatrick pal Bobby Ferguson for no-show work.

The money was part of a series of extortion payments Rachmale allegedly paid to keep Ferguson happy, protect city deals and help ensure future city contracts.

Testimony resumes at 9 a.m. Tuesday in federal court.

Updates have ended

View our archived coverage of Day 28: Defense tries to chip away at 'extortion' victim.

The head of a Detroit construction firm that has claimed he was extorted by Bobby Ferguson admitted on Monday that a city of Detroit inspector had an office at Lakeshore Engineering Services and had a company-paid cell phone.

Under cross examination by Ferguson’s attorney, Gerald Evelyn, Avinash Rachmale admitted that his long-time friend, Dilip Patel, had an office at Lakeshore’s building and that Patel’s wife, Mena, was paid $2,500 a month by Rachmale’s real estate company.

But Rachmale denied that Dilip Patel was a Lakeshore employee and he said their friendship preceded Lakeshore’s business relationship with Detroit. Patel was an inspector who oversaw employees who did check up on some jobs done for the city by Lakeshore.

In 2010, Patel was suspended by the city for allegedly working for Lakeshore at the same time. Evelyn said he appealed that decision and was supported by a letter from a Lakeshore executive saying Patel did not work there despite having the office, phone and a Lakeshore email account.

“It just looked like he worked for Lakeshore?” Evelyn asked.

“That’s what your perception is,” Rachmale said.

He said he only found out about the office after the city suspended Patel, who had access to the Lakeshore building. Rachmale said Patel just took over an office there.

Rachmale said he ordered his staff to remove all of Patel’s material from that office and put it in storage. He also ordered Patel’s Lakeshore email account disabled.

The news shook up a relatively uneventful day of testimony and raised new questions about Rachmale’s attempts to get city work. He has testified he began working with Ferguson under threat of losing city contracts and agreed to pay Ferguson often to do no work at all but to “protect” his city-contract pipeline.

Lawyer Gerald Evelyn, second from right, outside court with client Bobby Ferguson.

A firm headed by a Detroit businessman allegedly extorted by Kwame Kilpatrick and pal Bobby Ferguson grew into a global powerhouse at a time when prosecutors say the firm was victimized in a racketeering scheme, according to testimony.

Ferguson’s lawyer Gerald Evelyn attacked Avinash Rachmale, tried to undercut his status as an alleged victim and questioned his firm’s performance on various city deals, which cost millions more than originally anticipated.

During Kilpatrick’s tenure, when Rachmale claims his company Lakeshore Engineering Services was extorted, the firm rose from a minor player in the construction field to becoming a powerful defense and civil contractor working in war zones worldwide.

In 2002, Lakeshore was worth about $12 million. In 2007, the firm was worth $250 million.

Today, the company is worth about $500 million.

Evelyn called that “explosive” growth.

Evelyn also  showed jurors a spreadsheet indicating several Lakeshore deals skyrocketed in value after the company won water department contracts.

A 2000 deal originally was  worth $2.2 million. The final cost to taxpayers: $12.2 million.

A $19.9 million deal in 2005 ended up costing almost $45 million.

A $13.4 million deal in 2006 ended up costing taxpayers $55.6 million.

U.S. District Judge Nancy Edmunds

The judge presiding over the Kwame Kilpatrick corruption trial hopes a Detroit businessman allegedly extorted by the former mayor does not spend a fourth day on the stand.

U.S. District Judge Nancy Edmunds asked contractor Bobby Ferguson’s defense lawyer Gerald Evelyn when he might finish questioning businessman Avinash Rachmale.

Rachmale has spent three days largely corroborating earlier testimony from his former partner, Tom Hardiman. Lawyers have spent almost three tedious hours today going over emails and contracts.

Evelyn told the judge he hopes to finish today.

“Me too,” Edmunds said.

Bobby Ferguson, center, leaves federal court with lawyer Gerald Evelyn, right.

A businessman who testified he paid Bobby Ferguson almost $2 million because he feared the close friend of ex-Mayor Kwame Kilpatrick beat Ferguson in a 2006 city deal.

Ferguson lawyer Gerald Evelyn chronicled the bidding process to counter allegations that his client had the power to rig bids and win deals because of his close friendship with Kilpatrick.

In 2006, a Ferguson team lost out on a $14 million water department deal. The winning bidder: Avinash Rachmale’s firm Lakeshore Engineering Services.

Lakeshore won the work even though a Ferguson team had the highest-ranking bid, according to testimony Monday.

The Ferguson team won a sister contract worth almost $16.5 million.

“Mr. Ferguson didn’t evidence any connections to take both contracts?” Evelyn asked.

“No,” Rachmale said.

Kwame Kilpatrick and his father Bernard Kilpatrick walk toward the Gateway Deli for lunch during an afternoon break Sept. 18.

A businessman allegedly extorted by Kwame Kilpatrick and his pal Bobby Ferguson told federal agents and a grand jury a different story two years ago.

Avinash Rachmale testified two weeks ago that he hired Kilpatrick’s father Bernard in hopes of salvaging $15 million worth of water department deals.

Bernard Kilpatrick was paid $2,500 for one meeting at the political maestro’s Detroit apartment. Bernard Kilpatrick urged the businessman’s partner to reach out to Bobby Ferguson, according to earlier testimony.

But Monday, Bernard Kilpatrick’s lawyer confronted Rachmale with a transcript of a December 2010 grand jury appearance that contradicted the earlier testimony.

In 2010, Rachmale said a friend, Perry Mehta, referred his partner to Ferguson.

Rachmale also told federal agents in November 2010 that Mehta referred him to Ferguson.

“You didn’t mention Bernard Kilpatrick to the case agents,” Bernard Kilpatrick lawyer John Shea said.

“Let me clarify,” Rachmale said Monday. “This happened in 2002/2003, so we’re looking at almost eight or nine years ago.”

A businessman allegedly extorted out of millions by ex-Mayor Kwame Kilpatrick and Bobby Ferguson was grilled Monday about why he supported the ex-mayor financially and personally.

Avinash Rachmale received the 2009 Champion Award for Entrepreneurial Success from President Obama.

Avinash Rachmale was asked why he donated thousands of dollars to Kilpatrick’s nonprofit group and wrote a letter in 2008 supporting the ex-mayor.

“I felt the mayor was dynamic and personable and felt that he (could) lead the city very well,” Rachmale testified Monday.

In 2008, he fawned over Kilpatrick, praised his work as mayor and begged a Wayne County judge to give the ex-mayor a lenient sentence amid the text-message scandal.

The Lakeshore Engineering Services chief executive was one of several business leaders who wrote personal pleas to Wayne County Circuit Judge David Groner in 2008.

From the letter (written before Kilpatrick got four months in jail):

“This letter is in support of Kwame M. Kilpatrick who I have had the pleasure of knowing for approximately eight years,” Rachmale wrote. “As a business and property owner in the city of Detroit for 13 years, I can see the progress that the city has made under Mr. Kilpatrick’s leadership. I have been inspired by his vision, intelligence and his ability to get the job done.

“He knows he made some serious mistakes and thoroughly regrets what has happened as a result of his actions.

“He has apologized to all of us, family, friends, supporters and citizens, who have been affected by this most unfortunate situation. I accept his apology and know that he is very remorseful.

“I implore you Judge Groner to assess all the wonderful contributions Kwame Kilpatrick has made to the city of Detroit, and ask you to consider a more lenient sentence for him. He and we are looking forward to him once again making a positive difference in the city.”

Rachmale also testified he provided office space for the ex-mayor’s mom, former U.S. Rep. Carolyn Cheeks Kilpatrick.

U.S. District Judge Nancy Edmunds on Monday limited defense lawyers from showing jurors summaries of witness interviews written by federal agents.

Assistant U.S. Attorney Jennifer Blackwell

The ruling comes one day after prosecutors asked the judge limit defense lawyers from using agent interview notes to point out alleged inconsistencies in witness testimony.

Assistant U.S. Attorney Jennifer Blackwell said the notes and reports are not substantive evidence and said it is improper to read the reports verbatim in front of the jury.

Edmunds said defense lawyers can question witnesses about the notes and summaries but cannot show them to jurors.

Kwame Kilpatrick, right, and his lawyers head to court Oct. 10. (David Coates / The Detroit News)

Prosecutors moved Sunday to limit potential damage from flip-flopping government witnesses during the Kwame Kilpatrick corruption trial.

The government asked U.S. District Judge Nancy Edmunds to limit defense lawyers from using agent interview notes to discredit witnesses. The notes were written by agents following witness interviews and have been turned over to defense lawyers.

Defense lawyers have been using the notes and reports to impeach the government’s witnesses during cross examination by pointing out allegedly inconsistent prior statements, according to court records.

It is improper to read the reports verbatim in front of the jury, prosecutors argued in a filing Sunday.

“Defense counsel therefore should be prohibited from using these reports to impeach witnesses who allegedly have made prior inconsistent statements, and introducing their contents or otherwise publishing them to the jury,” prosecutors wrote.

The move comes after government witness Tom Hardiman, who allegedly was extorted by Bobby Ferguson, repeatedly failed to remember seemingly basic details of his business and personal life.

John Shea, a lawyer for Bernard Kilpatrick, urged the judge Sunday to deny the government’s request.

Shea said it is standard practice for defense lawyers to use interview notes and reports to impeach witnesses.

Updates have ended

View our archived coverage of Day 28: Defense tries to chip away at 'extortion' victim.

The head of a Detroit construction firm that has claimed he was extorted by Bobby Ferguson admitted on Monday that a city of Detroit inspector had an office at Lakeshore Engineering Services and had a company-paid cell phone.

Under cross examination by Ferguson’s attorney, Gerald Evelyn, Avinash Rachmale admitted that his long-time friend, Dilip Patel, had an office at Lakeshore’s building and that Patel’s wife, Mena, was paid $2,500 a month by Rachmale’s real estate company.

But Rachmale denied that Dilip Patel was a Lakeshore employee and he said their friendship preceded Lakeshore’s business relationship with Detroit. Patel was an inspector who oversaw employees who did check up on some jobs done for the city by Lakeshore.

In 2010, Patel was suspended by the city for allegedly working for Lakeshore at the same time. Evelyn said he appealed that decision and was supported by a letter from a Lakeshore executive saying Patel did not work there despite having the office, phone and a Lakeshore email account.

“It just looked like he worked for Lakeshore?” Evelyn asked.

“That’s what your perception is,” Rachmale said.

He said he only found out about the office after the city suspended Patel, who had access to the Lakeshore building. Rachmale said Patel just took over an office there.

Rachmale said he ordered his staff to remove all of Patel’s material from that office and put it in storage. He also ordered Patel’s Lakeshore email account disabled.

The news shook up a relatively uneventful day of testimony and raised new questions about Rachmale’s attempts to get city work. He has testified he began working with Ferguson under threat of losing city contracts and agreed to pay Ferguson often to do no work at all but to “protect” his city-contract pipeline.

Lawyer Gerald Evelyn, second from right, outside court with client Bobby Ferguson.

A firm headed by a Detroit businessman allegedly extorted by Kwame Kilpatrick and pal Bobby Ferguson grew into a global powerhouse at a time when prosecutors say the firm was victimized in a racketeering scheme, according to testimony.

Ferguson’s lawyer Gerald Evelyn attacked Avinash Rachmale, tried to undercut his status as an alleged victim and questioned his firm’s performance on various city deals, which cost millions more than originally anticipated.

During Kilpatrick’s tenure, when Rachmale claims his company Lakeshore Engineering Services was extorted, the firm rose from a minor player in the construction field to becoming a powerful defense and civil contractor working in war zones worldwide.

In 2002, Lakeshore was worth about $12 million. In 2007, the firm was worth $250 million.

Today, the company is worth about $500 million.

Evelyn called that “explosive” growth.

Evelyn also  showed jurors a spreadsheet indicating several Lakeshore deals skyrocketed in value after the company won water department contracts.

A 2000 deal originally was  worth $2.2 million. The final cost to taxpayers: $12.2 million.

A $19.9 million deal in 2005 ended up costing almost $45 million.

A $13.4 million deal in 2006 ended up costing taxpayers $55.6 million.

U.S. District Judge Nancy Edmunds

The judge presiding over the Kwame Kilpatrick corruption trial hopes a Detroit businessman allegedly extorted by the former mayor does not spend a fourth day on the stand.

U.S. District Judge Nancy Edmunds asked contractor Bobby Ferguson’s defense lawyer Gerald Evelyn when he might finish questioning businessman Avinash Rachmale.

Rachmale has spent three days largely corroborating earlier testimony from his former partner, Tom Hardiman. Lawyers have spent almost three tedious hours today going over emails and contracts.

Evelyn told the judge he hopes to finish today.

“Me too,” Edmunds said.

Bobby Ferguson, center, leaves federal court with lawyer Gerald Evelyn, right.

A businessman who testified he paid Bobby Ferguson almost $2 million because he feared the close friend of ex-Mayor Kwame Kilpatrick beat Ferguson in a 2006 city deal.

Ferguson lawyer Gerald Evelyn chronicled the bidding process to counter allegations that his client had the power to rig bids and win deals because of his close friendship with Kilpatrick.

In 2006, a Ferguson team lost out on a $14 million water department deal. The winning bidder: Avinash Rachmale’s firm Lakeshore Engineering Services.

Lakeshore won the work even though a Ferguson team had the highest-ranking bid, according to testimony Monday.

The Ferguson team won a sister contract worth almost $16.5 million.

“Mr. Ferguson didn’t evidence any connections to take both contracts?” Evelyn asked.

“No,” Rachmale said.

Kwame Kilpatrick and his father Bernard Kilpatrick walk toward the Gateway Deli for lunch during an afternoon break Sept. 18.

A businessman allegedly extorted by Kwame Kilpatrick and his pal Bobby Ferguson told federal agents and a grand jury a different story two years ago.

Avinash Rachmale testified two weeks ago that he hired Kilpatrick’s father Bernard in hopes of salvaging $15 million worth of water department deals.

Bernard Kilpatrick was paid $2,500 for one meeting at the political maestro’s Detroit apartment. Bernard Kilpatrick urged the businessman’s partner to reach out to Bobby Ferguson, according to earlier testimony.

But Monday, Bernard Kilpatrick’s lawyer confronted Rachmale with a transcript of a December 2010 grand jury appearance that contradicted the earlier testimony.

In 2010, Rachmale said a friend, Perry Mehta, referred his partner to Ferguson.

Rachmale also told federal agents in November 2010 that Mehta referred him to Ferguson.

“You didn’t mention Bernard Kilpatrick to the case agents,” Bernard Kilpatrick lawyer John Shea said.

“Let me clarify,” Rachmale said Monday. “This happened in 2002/2003, so we’re looking at almost eight or nine years ago.”

A businessman allegedly extorted out of millions by ex-Mayor Kwame Kilpatrick and Bobby Ferguson was grilled Monday about why he supported the ex-mayor financially and personally.

Avinash Rachmale received the 2009 Champion Award for Entrepreneurial Success from President Obama.

Avinash Rachmale was asked why he donated thousands of dollars to Kilpatrick’s nonprofit group and wrote a letter in 2008 supporting the ex-mayor.

“I felt the mayor was dynamic and personable and felt that he (could) lead the city very well,” Rachmale testified Monday.

In 2008, he fawned over Kilpatrick, praised his work as mayor and begged a Wayne County judge to give the ex-mayor a lenient sentence amid the text-message scandal.

The Lakeshore Engineering Services chief executive was one of several business leaders who wrote personal pleas to Wayne County Circuit Judge David Groner in 2008.

From the letter (written before Kilpatrick got four months in jail):

“This letter is in support of Kwame M. Kilpatrick who I have had the pleasure of knowing for approximately eight years,” Rachmale wrote. “As a business and property owner in the city of Detroit for 13 years, I can see the progress that the city has made under Mr. Kilpatrick’s leadership. I have been inspired by his vision, intelligence and his ability to get the job done.

“He knows he made some serious mistakes and thoroughly regrets what has happened as a result of his actions.

“He has apologized to all of us, family, friends, supporters and citizens, who have been affected by this most unfortunate situation. I accept his apology and know that he is very remorseful.

“I implore you Judge Groner to assess all the wonderful contributions Kwame Kilpatrick has made to the city of Detroit, and ask you to consider a more lenient sentence for him. He and we are looking forward to him once again making a positive difference in the city.”

Rachmale also testified he provided office space for the ex-mayor’s mom, former U.S. Rep. Carolyn Cheeks Kilpatrick.

U.S. District Judge Nancy Edmunds on Monday limited defense lawyers from showing jurors summaries of witness interviews written by federal agents.

Assistant U.S. Attorney Jennifer Blackwell

The ruling comes one day after prosecutors asked the judge limit defense lawyers from using agent interview notes to point out alleged inconsistencies in witness testimony.

Assistant U.S. Attorney Jennifer Blackwell said the notes and reports are not substantive evidence and said it is improper to read the reports verbatim in front of the jury.

Edmunds said defense lawyers can question witnesses about the notes and summaries but cannot show them to jurors.

Kwame Kilpatrick, right, and his lawyers head to court Oct. 10. (David Coates / The Detroit News)

Prosecutors moved Sunday to limit potential damage from flip-flopping government witnesses during the Kwame Kilpatrick corruption trial.

The government asked U.S. District Judge Nancy Edmunds to limit defense lawyers from using agent interview notes to discredit witnesses. The notes were written by agents following witness interviews and have been turned over to defense lawyers.

Defense lawyers have been using the notes and reports to impeach the government’s witnesses during cross examination by pointing out allegedly inconsistent prior statements, according to court records.

It is improper to read the reports verbatim in front of the jury, prosecutors argued in a filing Sunday.

“Defense counsel therefore should be prohibited from using these reports to impeach witnesses who allegedly have made prior inconsistent statements, and introducing their contents or otherwise publishing them to the jury,” prosecutors wrote.

The move comes after government witness Tom Hardiman, who allegedly was extorted by Bobby Ferguson, repeatedly failed to remember seemingly basic details of his business and personal life.

John Shea, a lawyer for Bernard Kilpatrick, urged the judge Sunday to deny the government’s request.

Shea said it is standard practice for defense lawyers to use interview notes and reports to impeach witnesses.

Robert Snell
Robert Snell is the Detroit News federal courts reporter. He can be reached at rsnell@detnews.com or (313) 222-2028.