U.S. District Judge Nancy Edmunds on Thursday refused to acquit former Detroit Mayor Kwame Kilpatrick, his father and contractor Bobby Ferguson after prosecutors rested their case.
Prosecutors rested following a 13-week case and after calling approximately 80 witnesses in the one of the country’s largest public corruption cases in 30 years.
Kilpatrick’s lawyer promptly launched a defense phase that is expected to last less than two weeks.
Federal prosecutors rested after defense lawyers cross-examined an FBI agent about the former mayor’s text messages. The texts portrayed Kilpatrick allegedly scheming to steer lucrative city contracts to pal Bobby Ferguson.
Defense lawyers won’t say whether Kilpatrick, his father Bernard Kilpatrick or Ferguson will testify during the defense phase.
Witness lists haven’t been made public, either, though former City Councilwoman Sharon McPhail is expected to testify for Kilpatrick — electric chair allegations aside.
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One of Kwame Kilpatrick’s first defense witnesses laughed away one of the ex-mayor’s key defense strategies Thursday.
Under cross examination, accountant Gary Leeman was asked about several personal expenses made by the ex-mayor’s nonprofit group for Kilpatrick.
Those purchases included a Cadillac DeVille, a trip to a water park and yoga lessons.
Prosecutors allege Kilpatrick treated the Civic Fund like a personal piggy bank and defrauded donors.
Kilpatrick’s defense lawyers have claimed the personal expenses, including golf clubs and expensive resort trips, were allowable under federal tax rules.
The yoga lessons expense made Leeman laugh.
“I highly doubt that would be a deductible expense,” Leeman said between chuckles. “Not even close.”
Kwame Kilpatrick’s defense team attacked claims Thursday he spent $841,000 more than he earned by questioning an accountant who studied the mayor’s tax returns.
Farmington Hills accountant Gary Leeman testified the government’s claim is skewed because they did not tell jurors how much money the mayor had saved before becoming mayor in 2002.
Kilpatrick’s defense lawyer James C. Thomas has alleged that the ex-mayor and his wife hoarded cash before 2002 — a claim rejected by IRS investigators.
Leeman is a tax expert who also examined expenses made by the Kilpatrick Civic Fund.
In the City Hall corruption case, prosecutors allege Kilpatrick defrauded donors and treated the nonprofit group like a personal piggy bank, using donor funds to pay for golf clubs, yoga lessons, summer camp for his kids and expensive trips for his wife and mistress.
Kilpatrick lawyer James C. Thomas took a dig at prosecutors by establishing that Leeman is a certified fraud examiner. The government’s IRS expert testified recently and admitted his certification had lapsed.
Under cross examination, Leeman admitted he had never conducted a criminal investigation of someone, like Kilpatrick, charged with tax evasion or filing false tax returns.
“Have you examined Kwame Kilpatrick’s personal bank records?” Assistant U.S. Attorney Michael Bullotta asked.
“No,” Leeman said.
“Have you examined bank records of the Kilpatrick Civic Fund?” Bullotta asked.
“No,” Leeman said.
“Or the form 990s for the Civic Fund?” the prosecutor asked.
“No,” Leeman said.
Prosecutors allege the extra money flowing through Kilpatrick’s bank accounts were bribes and kickbacks from contractors and others.
“If these payments were bribes or extortion payments, that could be taxable, couldn’t they?” Bullotta asked.
“Could be,” Leeman said.
Prosecutors submitted 71 pages of proposed jury instructions Thursday after resting the City Hall corruption case against Kwame Kilpatrick and two others.
The proposed instructions, which you can see here, hint at the complex nature of jury deliberations following a 13-week prosecution case that featured testimony from approximately 80 witnesses.
It could be a week or two before the jury starts deliberating. Kilpatrick launched his defense late Thursday morning in federal court.
The proposed instructions covers the presumption of innocence, burden of proof and reasonable doubt.
It also defines evidence and addresses the credibility of witnesses, among other things.
The instructions break down the charges against Kilpatrick, his father and contractor Bobby Ferguson.
The form also lists the elements of each charge, which includes racketeering conspiracy, extortion, bribery, fraud and various tax crimes.
The three face up to 20 years in prison if convicted of the most serious charges.
Kwame Kilpatrick launched his defense by calling a food and beverage sales director at a Greektown banquet center that hosted an infamous birthday party for the former Detroit mayor in 2006.
Sophie Plastiras, sales director at the International Banquet Center in Detroit, faced questions about the Splash of Red birthday party in June 2006 for Kilpatrick’s 36th birthday.
Kilpatrick lawyer James C. Thomas mentioned the party in early October to offer an explanation for the mayor’s mysterious source of cash.
Thomas claims during the party that the late casino and cable titan Don Barden allegedly plopped $5,000 in a gift box for Kilpatrick.
Plastiras does not remember how much the party cost. About 1,500 people attended, including several dignitaries. Attendees wore black attire accentuated by a “splash of red,” she said.
The banquet center also hosted a birthday party in 2009 for Kilpatrick’s grandfather in 2009.
The party was bankrolled, in part, by Kilpatrick’s nonprofit group, the Kilpatrick Civic Fund.
The federal judge overseeing the Kwame Kilpatrick corruption trial rejected requests for acquittals Thursday after prosecutors rested their City Hall corruption case.
Kilpatrick lawyer James C. Thomas made the formal request before launching a defense.
U.S. District Judge Nancy Edmunds concluded prosecutors established the elements of each charge in the 100-page indictment.
She also ruled that prosecutors met the burden of showing a criminal conspiracy existed and included Kilpatrick, his father Bernard and contractor Bobby Ferguson.
“That is not a finding that the government has proved the case beyond a reasonable doubt,” Edmunds said.
That’s for the jury to decide, she added.
Federal prosecutors rested their City Hall corruption case against former Detroit Mayor Kwame Kilpatrick on Thursday after five months and testimony from almost 80 witnesses in one of the largest public corruption cases in the last 30 years.
The U.S. Attorney’s Office rested at 10:44 a.m. Thursday, setting up what is expected to be a defense phase lasting less than two weeks.
It is unclear whether Kilpatrick, his father Bernard and contractor Bobby Ferguson will testify.
The corruption trial has been filled with testimony about Kilpatrick allegedly running a criminal racket inside City Hall, steering taxpayer-funded work to pal Bobby Ferguson, pocketing payoffs and extorting businessmen.
The trial followed a years-long probe by the FBI, Internal Revenue Service and other federal agencies. During the probe, prosecutors have secured two dozen convictions against businessmen and city officials, including former City Councilwoman Monica Conyers.
The charges outlined in a 100-page indictment portray Kilpatrick’s public career as a 10-year criminal racket involving bribery, extortion, fraud and tax evasion.
The crimes were allegedly aided by insiders, including Kilpatrick childhood friend turned government witness Derrick Miller.
Jurors have heard a dark, behind-the-scenes narrative of Kilpatrick’s epic rise from the state Capitol in Lansing and crash four years ago amid a scandal involving sex, lies and text messages.
Kilpatrick is accused of heading a criminal enterprise involving Ferguson that robbed taxpayers of millions of dollars.
Prosecutors allege Kilpatrick and the other defendants forced contractors working for the Detroit Water and Sewerage Department to hire Ferguson’s companies by threatening to cut them out of multimillion-dollar projects. According to prosecutors, the mayor’s father Bernard Kilpatrick played a role as middleman and shared in the proceeds.
Several surprises emerged during the prosecution’s case.
Former Detroit Water boss Victor Mercado, who allegedly used his power to steer work to Ferguson, pled guilty in November, weeks into the trial.
Mercado admitted conspiring with Kilpatrick to steer city contracts to Ferguson.
Mercado did not cooperate with prosecutors and has not testified during the trial.
During the trial, prosecutors alleged Kilpatrick pocketed bribes from businessmen and money from Ferguson, who reaped almost $125 million in revenue while his friend was in office.
Kilpatrick spent $841,000 more than he earned as Detroit mayor, according to testimony.
Defense lawyers countered that Kilpatrick merely received cash gifts from friends and associates and did not cheat on his taxes or file phony returns.
Ferguson’s lawyers, meanwhile, alleged he won contracts through legal means designed to steer a portion of construction work to minority contractors.
The prosecution’s case featured a range of evidence, including text messages, undercover FBI surveillance video and wiretapped phone conversations.
In one of the most dramatic moments, Kilpatrick’s father was shown on an FBI video pocketing $2,500 from a sludge-hauling contractor who allegedly was paying bribes to win a $1.2 billion city deal.
Bobby Ferguson’s company wrote two $9,900 checks to a Southfield jewelry store for bling purchases in September 2003.
On the checks’ memo line, Ferguson scribbled an interesting description for the purchases at the jewelry store, Golden Sun Jewelry.
“Truck parts,” the checks read.
“Are you aware if they sell truck parts at Golden Sun?” Assistant U.S. Attorney Mark Chutkow asked EPA Special Agent Carol Paszkiewicz, who found the checks during a 2009 raid at Ferguson’s office.
“They do not sell truck parts at Golden Sun,” she testified.
The agent testified to counter defense claims about what happened to $2.5 million in cash withdrawn from Ferguson’s bank accounts during the administration of his pal, ex-Detroit Mayor Kwame Kilpatrick.
Prosecutors charged Ferguson with sharing proceeds from a criminal racket with the former mayor, who allegedly steered taxpayer-funded city deals to the contractor.
Ferguson’s lawyers contend the $2.5 million didn’t end up in Kilpatrick’s pockets and was used on legitimate business expenses.
They pointed to a series of checks from Ferguson’s accounts that paid for business-related purchases.
One of those checks prompted the jewelry testimony Thursday.
Ferguson’s lawyers showed jurors a different, $12,000 Ferguson check drawn on his demolition company’s account.
The check was written to Ferguson. The purpose: truck parts.
Under cross-examination, Ferguson’s lawyer showed jurors another $13,000 check written to Golden Sun in February 2007.
Ferguson purchased a custom-made necklace with his company’s logo.
“For his employees, correct?” defense lawyer Michael Rataj asked the agent.
“No,” the agent said.
“Are you telling me you know how many medallions were purchased?” Rataj said.
“I know at least one was and it was for Mr. Ferguson,” the agent said.
Ferguson was a benevolent jewelry buyer, according to his defense team.
Rataj showed jurors a $30,000 check to the jewelry store.
On that memo line, it read “bonuses” — presumably for his employees.
Kwame Kilpatrick’s lawyer passed on cross-examining an FBI agent about dozens of text messages shown to jurors that portrayed the former mayor as allegedly scheming to steer lucrative city contracts to pal Bobby Ferguson.
The texts were shown to jurors during a barrage Tuesday that showed Kilpatrick and Ferguson discussing a taxpayer-funded deal to renovate the Book Cadillac Hotel, and other projects.
The move by defense lawyer James C. Thomas let prosecutors return the focus to a text sent from Ferguson to Kilpatrick in March 2003.
Ferguson griped about private debt owed by the owner of Club Rain, a Detroit strip club. The club needed a building permit from the city’s Building, Safety and Engineering and Ferguson asked the mayor to make trouble for the owner.
“Club Rain, the white boy thinks he is slick. Don’t have any real money…is it alright if Building Safety f—- with his permit?” Ferguson texted.
“Will call later,” Kilpatrick replied.
After the text was shown to jurors, Thomas insisted the texts don’t suggest Kilpatrick intervened for his pal.
“You know Bobby Ferguson spouts off,” Thomas told FBI Special Agent Robert Beeckman.
“Spouts off? I don’t know what you mean by that,” the agent said.
“You’ve been an investigator for how many years?” Thomas asked.
“Seventeen,” Beeckman said.
“And you probably played sports too,” Thomas said. “Ever see someone thump their chest and say things they didn’t mean?”
Prosecutors followed Kilpatrick’s lawyer to drive home a point.
“In any later text transmissions, does the mayor indicate that was an inappropriate request of you to make, Mr. Ferguson? Assistant U.S. Attorney Mark Chutkow asked the agent.
“No,” Beeckman said.
Prosecutors have more work to do before resting the City Hall corruption case against Kwame Kilpatrick, his dad and contractor Bobby Ferguson.
U.S. District Judge Nancy Edmunds today reversed course and agreed to let the feds question Ferguson’s claims that certain checks seized by agents on his office desk were used to buy truck parts.
Prosecutors allege the checks, made out to cash, were part of more than $2.5 million in cash withdrawn from various bank accounts during the time he allegedly shared proceeds of criminal activity with his pal, the former mayor.
The feds will rebut defense claims that the checks were used to buy truck parts by questioning EPA Special Agent Carol Paszkiewicz, who found the checks on Ferguson’s desk during a raid.