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.