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Kwame Kilpatrick Federal Corruption Trial Week In Review

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vickiethomas2 Vickie Thomas
Vickie Thomas is the City Beat Reporter for WWJ Newsradio 950. She was...
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Ex-Detroit Mayor Kwame Kilpatrick is charged with fraud, bribery, tax crimes and racketeering conspiracy. His father, Bernard Kilpatrick and Detroit contractor Bobby Ferguson are also on trial in Detroit federal court.

Trial Update By Vickie Thomas:
Monday, Jan. 28 – Friday, Feb. 1, 2013 

The week kicked off with a bit of a blow for the prosecution.  Its expert witness, IRS Revenue Agent Carl Selz returned to the witness stand and was forced to admit that he let one of his certifications expire so he could no longer testify as a certified fraud examiner.  On Friday, Selz testified that Kwame Kilpatrick owes close to $200,000 in taxes as a result of unreported income.

EPA Agent Carol Paszkiewicz testified that contractor Bobby Ferguson raked in nearly $124-million in city of Detroit related revenue over several years.   His attorney Mike Rataj got the agent to admit the eye-popping figure did not include Ferguson’s union payroll and other expenses.  He also noted that contractor, Inland Waters made 138-million-dollars on one single contract.

The agent took part in a raid and search of Ferguson Enterprises, Inc. and found $7,000 in cash tucked away inside of a safe in his office.

Another agent, Gwen Rosenthal took the stand to testify about the January 2009 raid and search she conducted on the downtown Detroit office of Ferguson’s other company, Xcel Construction.  Using photos, Rosenthal showed the stacks of cash totaling $261,000 which was found in a safe.  Also found was $1.2-million in checks and certificates of deposit.

A search of his Southfield townhouse nine months later turned up a safe in the laundry room concealed by the dryer.  It was filled to the top with $275,000 in cash and checks totaling $500,000.

On cross-examination by Ferguson’s attorney Mike Rataj, Rosenthal testified that it’s not illegal to have a safe in your home or office.  She also said it’s not against the law to have cash, as long as it didn’t come from illegal activity.  She admitted that Ferguson had to put his money somewhere after banks forced him to close his accounts as a result of the federal investigation.  She also said Ferguson is not charged with any tax crimes.

Another agent detailed Ferguson’s cash withdrawals from 2002 to 2008 which totaled 2.5-million-dollars.

On Tuesday, FBI Special Agent Robert Beeckman took the stand to testify about a series of text messages the prosecution used in an attempt to demonstrate an organized effort by the defendants to seek financial gain.

Here’s a series of text messages between contractor Bobby Ferguson and Kwame Kilpatrick related to an incident at the Book Cadillac renovation job on May 17, 2004:

FergusonYou won’t believe this … they stole my equipment from the Book Cadillac … chased down and got it back.

 He notes also that the news media was at the scene.

FergusonI am famous now … I just need to get some money                           

Kilpatrick:  Lol … Right, Let’s get you some

Ferguson“US”

Beeckman testified that Ferguson made $9 million on the Book Cadillac project.

The government rested its case at 10.45 a.m. on Wednesday after going over more text messages and questionable checks Ferguson wrote to a Southfield jewelry store.  The memo sections of the checks say, “Truck parts.”

The first witness called to the stand by the defense was Sophie Plastiras who worked for the late Ted Gatzaros as the sales director at the International Banquet facility in Greektown.  She booked Kwame Kilpatrick’s 36th birthday party.  She worked with his wife Carlita to plan the event called, “A Splash of Red,” which brought in a lot of green for Kilpatrick.  According to the defense, cash gifts he received explain why he was able to spend $840,000 above his salary during his tenure as mayor.

Plastiras says about 1,500 people attended the June 9, 2006 event, including the late business mogul Don Barden.

On cross-examination by the prosecution, she testified that agents initially approached her about a 90th birthday party for Kilpatrick’s grandfather held at the same location.  She says a $2,500 check from the controversial Kilpatrick Civic Fund helped pay for the event.  The defense contends it was a community celebration.

Next up for the defense was CPA Gary Leeman who is an expert in forensic accounting.  He testified that the prosecution should have tracked Kwame Kilpatrick’s income and savings before he became mayor.  As a result of not doing that, Leeman says there’s no way to know exactly how much money Kilpatrick had on hand prior to taking office.

But Leeman laughed when asked about some of the expenses paid for out of the civic fund, like yoga classes and a water park vacation for the first family.  He says such use of the charitable fund was not proper.

Kizzi Montgomery who worked for the Kilpatrick administration also took the stand.  She testified that staffers and appointees of the mayor were expected to pool their cash to purchase expensive gifts, like a Rolex watch, for Kilpatrick on his birthday and for Christmas.  Some were expected to contribute up to $1,000.

MORE: Kilpatrick Corruption Trial Wrapping Up In Federal Court

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