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Records: Detroit Contractor Extorted $58.5 Million

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DETROIT (WWJ/AP) - Federal court records claim a Detroit businessman and ally of disgraced ex-Mayor Kwame Kilpatrick obtained $58.5 million by extorting contractors and through other illegal conduct.

The allegations surfaced in a seizure warrant affidavit that was unsealed Thursday and reported by The Detroit News.

The affidavit provides the most detailed account to date of the alleged trail running through the racketeering conspiracy case against Bobby Ferguson and Kilpatrick. It says Ferguson spent a fraction of the cash on his kids’ college education, his girlfriend and construction equipment.

The affidavit helps explain why FBI agents seized almost $500,000 from several accounts linked to the Ferguson investigation in November. The money is tied to bribery, extortion and money laundering and subject to seizure, according to the affidavit.

Via his Facebook page, Kilpatrick earlier denied he’s connected to money seized by the FBI from a Texas bank account linked to Ferguson.

Ferguson’s attorney, Gerald Evelyn, said he hadn’t read the affidavit but has challenged FBI searches in a separate bid-rigging case against Ferguson.

Ferguson is awaiting trial in separate federal corruption and bid-rigging cases. Investigators say the 42-year-old,  who owns a demolition company, is accused of getting receiving $11 million in contracts by falsifying bids.

Those alleged offenses took place as part the Garden View Estates project, a mixed use multi-unit public housing development located at the site of the former Herman Gardens at Joy and Tireman on Detroit’s westside. Ferguson has pleaded not guilty in the corruption case, which is set for trial in May. Two other people, however, have pleaded guilty in connection with the case.

Meantime, the FBI has announced plans for the formation of a multi-agency task force to uncover and prosecute public corruption in the Metro Detroit area. Read more, here.

TM and © Copyright 2011 CBS Radio Inc. and its relevant subsidiaries. CBS RADIO and EYE Logo TM and Copyright 2011 CBS Broadcasting Inc. Used under license. All Rights Reserved. This material may not be published, broadcast, rewritten or redistributed. The Associated Press contributed to this report.

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