Cadillac dealer says Kilpatrick paid with cash, nonprofit funds

From left, Keith Dalgleish, Doug Dalgleish Sr., Charles Dalgleish Jr. and Doug Dalgleish Jr. were not happy with having to close their dealership. (David Guralnick / The Detroit News)

From left, Keith Dalgleish, Doug Dalgleish Sr., Charles Dalgleish Jr. and Doug Dalgleish Jr. were not happy with having to close their dealership. (David Guralnick / The Detroit News)

The car dealer who supplied Kwame Kilpatrick with a fleet of expensive Cadillacs testified Tuesday he was paid with a check from the mayor’s nonprofit group and a large stack of cash.

Kwame Kilpatrick’s nonprofit group leased a Cadillac DeVille for the future Detroit mayor in 2000, an expense prosecutors allege defrauded donors of the Kilpatrick Civic Fund.

Prosecutors allege Kilpatrick schemed to defraud donors to the Kilpatrick Civic Fund by spending money on a host of personal expenses, including golf clubs, resort trips, and the brand new Cadillac.

Cadillac dealer Doug Dalgleish Jr. testified Tuesday that Kilpatrick leased a DeVille in March 2000, when Kilpatrick was a state lawmaker. The DeVille’s monthly payment was $728.

Christine Beatty

Christine Beatty

Kilpatrick paid a $2,000 down payment using a check from the Kilpatrick Civic Fund, which prosecutors allege the ex-mayor treated like his personal piggy bank.

The check was co-signed by Kilpatrick’s mistress, Christine Beatty.

From the indictment:

“It was part of the scheme and artifice to defraud that KWAME KILPATRICK would claim to the Internal Revenue Service, the public and potential donors that the Civic Fund was a social welfare organization that spent its funds in ways consistent with the purposes stated in its application for tax exempt status.”

“You don’t know why the vehicle was being purchased or how it was used,” defense lawyer James C. Thomas said. “It could have been a business purpose or a personal purpose, but you just don’t know.”

“Correct,” Dalgleish said.

Dalgleish’s family operated Detroit’s last Cadillac dealership, which was shuttered during General Motors Corp.’s bankruptcy and restructuring.

He testified Kilpatrick also leased a $35,000 red Cadillac Escalade in 2009 — days after the former Detroit mayor finished serving a jail sentence stemming from the text-message scandal.

“Were there some extras that came with this vehicle?” Assistant U.S. Attorney Eric Doeh asked.

Kwame Kilpatrick

Kwame Kilpatrick

“Yes, there were some custom tires and wheels, there was some other chrome accessories on the exterior: chrome tow hooks and chrome vents,” Dalgleish said.

Kilpatrick paid in a creative way.

He paid, in part, with $9,000 cash and a $4,000 cashier’s check in February 2009, the dealer said.

The $4,000 check was from the mayor’s mom, former Congresswoman Carolyn Cheeks Kilpatrick.

The cash included a stack of $100 bills — 79 in total, Dalgleish said.

Days later, Kilpatrick brought in two other checks. One cashier’s check was for $16,000 and one totaled $6,459.

Bobby Ferguson

Bobby Ferguson

Prosecutors allege Kilpatrick had access to large amounts of cash that went beyond his mayoral salary and got cash from contractors, including co-defendant Bobby Ferguson.

The source of the cash used to lease the Escalade is a mystery.

Kilpatrick’s lawyer didn’t offer an explanation but suggested Kilpatrick had money after being hired as a salesman with an affiliate of Detroit-based Compuware.

Dalgleish admitted he didn’t know if the money was a gift or if Kilpatrick borrowed the cash.

Dalgleish was required to report the cash payments to the IRS. The government requires dealers to submit the form whenever a customer pays with at least $10,000 in cash or checks.

He notified the IRS, as required, in late 2009.

The IRS form includes a box that can be checked when the dealer believes the sale was suspicious.

“The box is not checked off,” Thomas said to the dealer.

“Correct,” Dalgleish said.

“There was nothing unusual about this transaction,” the lawyer said.

“Correct,” the dealer said.

Robert Snell

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