Kilpatrick trial: Witness testimony begins

Published On: Sep 24 2012 10:14:34 AM EDT
Updated On: Sep 24 2012 01:01:01 PM EDT
DETROIT -

12:41PM Judge says if there is a legal issue involving the last witness, then court will convene at 8:45AM tomorrow. If not, court starts at 9AM as usual. Court adjourned.

12:39PM Lawyers go to sidebar

12:38PM Jury excused so that lawyers can address a legal issue

12:36PM Chad Smith steps down.

12:35PM Gerald Evelyn to the question stand. Smith assigned under Mayor Archer on a detail for Kwame Kilpatrick who was running.

12:28PM Jim Thomas takes stand to question. There were a total of 4 officers on Smith's detail. Job description was to protect Carlita and the children. Smith claims it was difficult at times. Carlita gave Smith her ATM card at times. Smith had no problem taking money out for her. The money would be deposited at First Independence Bank- $1,500 at a time. Smith never saw anyone give Carlita the money and has no idea where it cam from. Never saw Bobby Ferguson giver her money. Smith was on the Miami Super Bowl trip and did not know that the former mayor was on the NFL Super Bowl Committee. Thomas asks him did you know that the home where you got the money from the shoe was the Kilpatrick home before Manoogian. Told investigators that he thought there was $300 left in the shoe.

12:23PM Next witness comes in. Chad Smith sits down With Detroit PD. Also served with EPU. Served Carlita Kilpatrick in 2001. Smith asked by Lorenzo Jones to be part of detail. Went to high school with Kwame Kilpatrick. They were good friends and still consider Kwame a "life-long friend". Last time they spoke was 4 years ago at 20 year class reunion. Smith was on Carlita's detail. Provided security for First Lady and the children for 2 years. Also ran errands for the mayor. One errand involved running into a house to get something, some money in his room in his closet. The money was inside a pair of shoes. Took about $1,500 to bank to make payment on credit card. Just took amount that he was asked.

12:22PM Commander Love excused

12:20PM Thomas redirects.Protection Unit would sweep for listening devices for the Mayor Kilpatrick. Love not aware of any listening sweeps in 5 years with Mayor Archer.

12:19PM Eric Doeh redirects for government. Love says he didn't like when Officer Martin came back because things had been moving forward positively. On the trip to New York because Love was with Christine Beatty for a time, he had no idea what Kwame may have purchased.

Protection Unit made sweeps for listening units for Kwame Kilpatrick.

12:17PM Gerald Evelyn gets up to question. Evelyn asks if there were threats to mayor and his family. Yes says Love. Bobby Ferguson’s home was considered a safe area, as where other friends home like Derrick Miller, family or other staff members. When Officer Martin came back, Love didn't like it but didn't leave EPU

12:03PM Jim Thomas for defense. Commander is 4th highest ranking within the PD. As commander, he has roughly 300 officers under his command. In charge of 10th and 12th precincts. Been police officer for 18 or 19 years. Love was on EPU under Mayor Archer- was a driver.

Good reason for protection. It is an apparent job. The mayor's job starts very early in the morning into the night. EPU is with the mayor wherever he goes. Thomas asks Love to characterize Kwame's relationship with police department. Very good says Love. Recalls Officer Martin coming back to work for Mrs. Kilpatrick. Love not aware that Kwame Kilpatrick had meetings with officials in Bermuda. Love not on EPU when Kwame stepped down as mayor- left detail in 2007.Thomas asks Love about Kwame's other friends. "Did you know Roger Pinsky? Was he a friend?” asks Thomas. "Friends? I wouldn't say they were friends," responds Love. "Did you ever see Mayor Kilpatrick with large amounts of money?" asks Thomas.

"No," responds Love. Thomas asks Love to recall Kwame's 35th "Splash of Red" party. Love doesn't remember money in a box being collected for the mayor. Love does not recall a watch being given to Kwame by Tony Suave on the trip to New York. Or how much he bought on the trip.

11:48AM Next witness is Commander  Dwayne  Love with Detroit PD.Been with the department for 24 and half years. Served in 2 different capacities: at first was an advance member, eventually became in charge of unit. Got there in 2003. There was negative stuff in the paper about the unit at the time so did not want to work with EPU. When Jones and Martin were transferred out, then Love agreed to work with the unit.Interviewed with former mayor Kilpatrick. As advance sergeant, wherever the mayor was, Love would get there first to secure routes and venues. 

Love also performed personal tasks for mayor- like dry cleaning or go to bank. Made bank runs more than 3 times.Cash was usually in a sealed deposit envelope and would take it to the bank. Love never counted amounts in envelope. Love doesn't remember weight of cash envelopes or how they felt. Believes bank employees would take money and give it to female employee, can't remember specifics. Love says at his bank he usually takes money to a teller. But doesn't think this person was a teller because he did not go to a teller window but to a specific area of the bank.

Remembers Chase Bank on Woodward and the other might have been First Independence. Love accompanied Kwame to Bermuda in 2006. It started off as a "thank you" trip but it was business trip for me. It was a trip to thank the people who got the mayor re-elected. We were there to unwind a little bit but make sure the mayor was ok. "We all had to chip in money to go," says Love. All the participants of trip had to give $500. 

Love doesn't know how money was distributed. They went by Tony Soaves’ private jet. Others on the trip included Bobby Ferguson, Christine Beatty, Andre Cunningham, Derrick Miller and Michael Martin, the officer who was ousted and then re-admitted to the EPU. The trip was 3 or 4 days long.Love also accompanied mayor on trip to New York, Christmas time in 2006. It was Christine Beatty, Tony Suave, Love and the mayor on Soaves’ jet. It was a private shopping trip for Beatty, Kwame and Suave. Went to various stores. One day trip- flew there and came back the same day.

11:47AM Travis steps down.

11:46AM Gerald Evelyn for Bobby Ferguson asks questions. Travis knows families are friends.

11:45AM Jim Thomas redirects "Did you think a safe was going to attack the mayor?" asks Thomas Travis laughs no. Officer Martin was not a direct report to Travis but to Dwayne Love. Martin cleared on allegations.

11:39AM Eric Doeh redirects for government. 2 officers were removed from EPU for infractions. One came back to EPU. Lt. Saunders asked Travis if he thought was a good idea to bring the officer back and Travis said no. The former officer was Officer Mike Martin. Officer Martin seemed to have a close relationship with Mayor Kilpatrick. Travis said he had a close relationship. When he came back, Kilpatrick would use Officer Martin for personal runs. Travis concedes it could have involved going to the bank for Kwame. The witness testifies though he was second-in-command of the unit, he didn't always know where Officer Martin was going. Doeh asks how did it appear to be hip pocket but there where places he was not able to go. Travis responds that he knew that he was in the company of a friend, even though he did not know who might or might not be at the location. Doeh asks if he was aware of safe at the locations. Travis says no.

11:30AM Jim Thomas for the defense. Travis says it was an honor working for the mayor and he enjoyed himself. At any given time, Travis says there were 24 officers in the detail. There would be 4 a person team working for 24 hours. Travis agrees that having a security detail is not a frivolous expense. Travis says that as hip pocket, you want to keep hands on distance from the mayor. There were instances where he worried about the mayor. There were moments of heightened alert. Thomas asks Travis if there was a party at the Manoogian Mansion. "Not that I was aware of," laughs Travis. Travis said that he worked for 4 mayors and he considered Kwame Kilpatrick a very hard-working mayor. Thomas asks if Travis thought something nefarious was going on when they were together. "Don't understand that word but no sire," responds Travis.

Travis agrees that he never saw large sums of cash on Ferguson. Thomas asks if he knows Jim Jenkins. Travis said he thinks he does. Cannot remember them getting together. Travis draws a blank at the name of the other friends until Thomas prompts him. Thomas asks Travis if he knew that Kwame went to Miami because he was on the Super Bowl Committee. Travis says yes. Travis was aware that Kwame had work commitments outside of Detroit. Thomas asks if Kwame was a partier and drinker. Travis responds no, did not see that. Roger Pinsky is within circle of friends similar to Bobby Ferguson. Thomas asks if he had any sense that something shady was going on between Kwame and Ferguson. Travis says no.

11:28AM Travis says they went to restaurants frequently. Doeh asks if Gaspar Fiore was part of restaurant visits. Thomas interjects and calls for sidebar. After sidebar, judge asks jurors to disregard Fiore reference. Travis does not remember Ferguson on the Super Bowl trip.

11:12AM  Jefferson Travis called to witness stand Government takes the question stand. A sergeant with Detroit PD. At one point he was with the Executive Protection Unit. Small unit responsible for protection of mayor and his family. Was also part of protection unit for Mayor Archer.

Travis started with Kilpatrick security team in 2003. He was contacted by an assistant chief. It was alleged that some of the officers at the time were falsifying time sheets and problems with vehicles. Travis was called in to solidify the team and provide training. Travis considered it at the time a privilege to serve with the team. He was second in command of the unit but performed a variety of other tasks. Advance was responsible to go ahead of the mayor and set up routes. Also became familiar with Bobby Ferguson. In time working with the unit, went to Ferguson's house, business and saw him at the former mayor's office. Did not know the relationship between Ferguson and Kilpatrick. Went with mayor to businesses and Ferguson's home in Rosedale Park. We would advance only scheduled hits. For unscheduled hits, like visiting residences or going to cleaners, those visits to Mr. Ferguson's would not be advanced. Travis considered Ferguson to be a friend so did not search the house. Travis went to 2 separate businesses owned by Ferguson. One was Ferguson Construction or Enterprises. Usually went for a couple of hours as "hip pocket" to keep close proximity to mayor and shield him from danger. "There was one time I was going to go into the building but mayor Kilpatrick told me not to go in," says Travis. At the other business location, sat in reception area waiting. Ferguson and Kilpatrick where in another area of building so Travis did not know what was going on. U.S. Attorney asks how one would gain access to Mayor's office. Travis says you'd have to report in at lobby, sign in and get a security tag. Some employees had access to various doors. There was a Honeywell Access key system that would be swiped on the door for access. Travis not aware of Ferguson having that type of access to the doors. Travis travelled with Kilpatrick to Miami for Super Bowl and Tallahasse to former college with mayor. Super bowl they travelled commercial and to Tallahassee it was a private jet owned by Tony Soave. Travis believed they were friends- in his presence, Kilpatrick used private jet 3 or 4 times without Soave being present.

11:11AM J. Diane Dixon excused.

11:10AM Government redirects Dixon was not aware that he had a JP Morgan Chase account. Thomas asks if he had accounts at First Independence and Dixon says no, not to her knowledge.

11:03AM Mr. Thomas gets up to question. Thomas asks if Dixon was Kwame's personal banker. She responds yes. The loan was a personal unsecured loan. Judge interrupts and asks Dixon to back off the microphone. Thomas tells her she has a great voice.Dixon first met Kwame in 2007 in a business capacity. They kept the relationship strictly business. Dixon did not start loan with Kwame, she just administered it. Kwame did qualify under bank's policy. Used promissory note where he promised to pay. One year balloon was that he had 11 set monthly payment. The final payment on the 12th month was the balloon where he could either pay off the balance or refinance. Kwame refinanced. All the payments Dixon processed were made in cash. Did you think it unusual when he made 3 payments in a row. Dixon did not know that he was going to be going to jail shortly therafter for 90 days. Thomas asks if Kwame was suspicious. Dixon says no- his demeanour was very nice. He was nice to all the staff.

10:56AM J. Diane Dixon called to the stand.

10:56AM A former employee of First Independence Bank. Worked from July 2000 to July 2010. Involved in consumer lending. Processed a loan for Kwame Kilpatrick for $15,000. There were 11 monthly payments. Paid off the existing loan and put a new loan on the books. Did see the mayor come to the bank on occasion. Dixon received cash money. Usually paid in $100 bills. Exhibit KKF 7A- a principal payment of $492.11 on September 11th, 2008. Another payment for $516.71 on the same date. And again on the same date, another cash payment for $492.11. And then another principal payment in cash for $2,000 on the same date. And then on October 2, 2008 another cash payment was made for $1,000. And then on February 23rd, 2009 another principal payment was made for $3,100. That particular payment was made by an administrative assistant.

10:53AM Court called back to session. Jurors indicated to judge they are having a hard time seeing the exhibits on the screen. Jury takes a seat.

10:44AM Two witnesses testified thus far. The first witness was IRS agent Ron Sauer who testified that in the period between 2001 through 2008, when Kwame Kilpatrick was mayor of Detroit, he made a total of $531,401.72 in unaccounted cash deposits.

My personal favorite moment was when Jim Thomas, lawyer for the former mayor, asked the no-nonsense IRS agent if there were different places one could put maybe put money. "Like a mattress or a shoe?", asked Thomas. "Well, it would have to be a big shoe.", responded a straight-faced Ron Sauer. " Well Kwame's got big feet!", exclaimed Thomas. The second witness was former First Independent Bank employee Jerome Robinson who testified to seeing Kwame Kilpatrick make frequent cash deposits on his Mastercard account. More witnesses expected to testify after the 15 minute break.

10:33AM Jerome Robinson excused. Fifteen minute court recess.

10:33AM Jim Thomas redirects for defense.

10:29AM U.S. Attorney Eric Doeh redirects. Robsinson asked if there were customers who would conduct such transactions. Usually business people but not specifically with those large dollar amounts. But Robinson says that sometimes yes there could be and with the same regularity as Kwame. Most business customers would usually transfer from their account and wouldn't come in carrying cash. Robinson says there was nothing secretive about Kwame when he interacted with him. But has no idea where the money came from.

10:18AM Government ends questioning. 

10:18AM Jim Thomas gets up to question the witness. Kwame never made any secret of the fact that it was him when he came in to make his deposits. Robinson agrees that he never tried to hide his identity. There are cameras all over the bank. Robinson met with IRS and FBI about 4 or 5 times. Robinson told agents he didn't think it was unusual to make cash payments on a credit card account. Robinson would have no idea where the money might be coming from.

There is an obvious camera when making deposits, so Kwame would have known that transactions are being recorded. Thomas references a transaction for $9,000 on December 8th, 2005. Apparently there was a recount at that time, says Thomas, and Kwame was travelling. There was a cashier's check written from that to Cosmopolitan Travel. If someone asks Robinson for a large withdrawal, not unsual to be asked for large denominations, $100 and $50 because they are less bulky. Thomas refers to exhibit KKF 4-11. On October 28th, 2008 was the day Mr. Kilpatrick went to jail. Paid $15,000 as part of his initial restitution to Wayne County.

10:01AM Government steps up to ask questions.

10:01AM Jerome Robinson is a credit union employee. Worked from 2004 to 2010 at First Independence Bank. Began work on February 23rd, 2004.

In last position, he was a customer service representative. The main branch of First Independence bank was in downtown Michigan where he worked. Came into contact with Kwame Kilpatrick when he wanted to make credit card payments starting in 2005. Robinson asked to point out former mayor. He does. Kwame basically came in for MasterCard credit card payments held by bank. Cash transactions. A typical transaction would involve Kwame handing cash and paying credit card. He would hand it from his pocket. Usually for about roughly $3,000. Most of the denominations were increments of $100 bills. The former mayor usually came in about once or twice a month to pay credit card account. sometimes also a security aide would make payments. The aide probably just made one transaction every time he came- total would be about 8 or 9 times total. All cash as well.

Exhibit KKF 1- summary of cash transactions. Robinson recognizes the last 4 digits of the credit card.

Robinson had his own specific teller number: 103.

Besides credit card, there were other cash transactions there was a loan payment. One of Kwame's employees made it. Carlita also purchased cashier's checks.

Exhbit KKF 4- summary of cashier's checks purchased.

Robinson recognizes a $15,000 transaction made by Kwame. Robinson counted out the money.

A CTR, is a currency transaction report filled out on any transaction more than $10,000. Robinson filled one out on this transaction. Keeps track of any large dollar amounts that come through.

Made mainly in $100 increments, about 98% of payments made by Kwame, the rest in $50 bills.

Exhibit shows a cash deposit for $9,000. This transaction was for the purchase of a cashier's checks.

Exhibit 4A-11- a cash in deposit for a cashier's check. The amount was for $15,000.

Exhibit 15-2- a document to keep track of the bank's transactions.

10:00AM Jerome Robinson, second witness, sworn in.

9:59AM Next witness is called Jerome Robinson.

9:59AM Ron Sauer steps down

9:59AM Gerald Evelyn, lawyer for Bobby Ferguson redirects

9:56AM Jim Thomas redirects. Prior to becoming mayor, Kwame's house payments were $400. Thomas says they could have been accumulating money in a variety of manners. Maybe a  mattress or even big shoes as Kwame has big feet.

9:52AM Government redirects. Asks if money is sitting in a safe could it be later deposited in account? Yes says Sauer.

$1,200 dollars was in shoe at the Kilpatrick house. $25,000 Rolex watch gifted to Kwame was not included in calculations.

Sauer says when people generally withdraw cash; they typically use it to spend not put in another account. Sauer says Carlita's income could not account for the cash deposits. She made a total of $100,000 in the period between 2001-2008, no income after 2003.

Bullotta asks if bribes are taxable. Sauer says yes.

9:52AM No other defense questions

8:45AM First at the defendants' table this morning is Bernard Kilpatrick conservatively attired in a dark suit.

Next in is Victor Mercado who sits quietly next to his lawyers.

Last to arrive in the courtroom this morning is Kwame Kilpatrick who goes over to talk to longtime friend Bobby Ferguson before taking his seat.

First witness expected to testify this morning is Internal Revenue Service agent Ron Sauer.

9:36AM Jim Thomas questions the witness.

Allegations that Mr. Kilpatrick was receiving bribes when agent Ron Sauer came on. Rowen Shook was the other agent involved in the investigation. There were probably 4 to 6 other agents involved in the file.

There were other FBI agents involved in the case. Bob Beckmann was the primary case agent for the FBI.

Search warrants were executed in related cases. There was a wire tap on the case and the understanding there are agents monitoring wire taps. It's outside of the area of IRS expertise though. Cash activity seemed to pick up in late 2002 til the end of Kwame's administration. Did not look at cash deposits before 2001. Mrs. Kilpatrick was working up to 2001-2002. IRS not able to identify any of Carlita's funds going into the State Employee account. There was income for Carlita but did not identify where her money went in 2000 and 2002. Sauer does not believe Mrs. Kilpatrick was operating a cash business but concedes her money could have been cash in deposit back in 2000. There was evidence that there was cash accumulated in a shoe at the Kilpatrick residence.

Sauer reveals he does not have extensive training in tax but financial investigations. Sauer says gifts are something given you that are not taxed. But he is not an expert. Sauer's investigation attempted to rule out gifts. There were people not called to grand jury who might have given gifts. Sauer didn't get involved in case in 2006. Doesn't recall knowing about party where Kilpatrick received a gift. There was another party when he became mayor where he was gifted money. There was another party when he turned 35 that he received a watch and some gift money. If it's a gift of money given in a box it is possible that it is not taxable. Sauer stresses he is not an expert though. Thomas asks if Sauer correlated Bobby Ferguson's withdrawals to Mr. Kilpatrick's cash deposits. On a daily basis, Sauer says, there was not a direct correlation he could find.

9:02AM Jurors file in and take their seats. Judge Edmunds welcomes jurors. Jurors are given pictures of witnesses and pads to take notes of witness testimony.Government calls IRS agent Ronald Sauer- special agent with IRS investigation for 14 years. With Bank of Chicago as examiner prior to that. As special agent, he acts as a financial investigator. Investigates tax violations and money laundering.

He became involved in this investigation in March 2006 investigating charges of bribery involving Kwame Kilpatrick.

Investigation involved use of federal grand jury- larger group than current jury pool.

Pulled former mayor Kilpatrick's credit history records- looking for any indication of unusual banking activity.

First Independence bank- found a MasterCard account with Kwame's name. One of the things that stood out was cash payments. Apparently $282, 0000 payments in the period from 2002 to 2008.

Looked at KKF 1a- underlying documents supporting cash transactions from First Independence bank.

Bullotta admits KKF 1a to the court. August 1st 2002- document intake for $3,400 as a cash payment. Exhibit KKF 1- cash intakes from 2002 to 2008. Cash payments made on his credit card, 3 different payments in Kwame's name. Begin August 1 2002 and there were regular cash payments thereafter. The last cash payment was in 2009. Paycheck was deposited at JP Morgan Chase. Kwame's wages ranged from $172,000 in 2002 to $127,000 in 2008. IRS subpoenaed JP Morgan Chase for those documents from 2 accounts- one in Kwame's name and another joint with Carlota. The city was not paying former mayor's salary in cash.

KKF 3a exhibit submitted- JP Morgan Chase summary of deposits. The former mayor was getting deposits in cash that IRS could not identify. Shows a $4,000 cash deposit in January 2005 into Bank One account (which became JP Morgan Chase)

Exhibit KKF 3- a summary of cash deposit tickets at JP Morgan Chase. Three accounts reflected in the charts held individually in Kwame's name and then joint with Carlita Kilpatrick. All deposits made are in cash. There were regular cash deposits- sometimes within a day of each other and sometimes several weeks apart. Deposits stop in late 2008- September 29, 2008 for $3,000.

This cash was not traced to Kwame Kilpatrick paycheck. IRS interviewed bank tellers and members of the former mayor's protection detail. There were also cashiers checks at First Independence Bank. Exhibit KKF 4A- cashiers checks.  Summary of the cashier’s checks purchased at First Independence Bank in Kwame Kilpatrick's name. Total is $34,000. KKF 7- summary of cash loan payments in Kwame Kilpatrick's name. Cash and de it payments. Total is approximately $10,000. Other bank accounts included Carlita's individual account at Comerica and Kwame's at State Employees Credit Union in 2001-2002. Also had an account at Bank of America.

KKF 8A- summary of cash deposits into Bank of America in both Kwame and Carlita's name- 4 payments totaling $8,000.

KKF 5A- joint account at Florida's Premier Bank in 2007-2008 for $5,000. KKF 12- summary of all different accounts which includes cash payments and on the credit card. Summary of total cash deposits at JP Morgan Chase: $194,500. The chart summarizes all the other underlying charts. In 2001, Kwame was using State Employee Credit Union. IRS saw frequent cash withdrawals and no cash deposits in 2001 before he became mayor. His salary went into that account. Exhibit KKF 14- January 2001. See some ATM adjustments, all the money going in. Did not find any cash deposits. KKF 13- summary of cash withdrawals from State Employee account. Frequent cash withdrawals, smaller dollar amounts. IRS noticed that once Kwame became mayor in 2002, switched from frequent cash withdrawals to cash deposits at the JP Morgan Chase account.2001-2008 total cash deposits in time as mayor $531,401.72.

8:59AM Kwame's lawyer Jim Thomas asks for sidebar. Kwame Kilpatrick passes a book to Bobby Ferguson at the defendants' table while defense and government lawyers confer at sidebar with Judge Nancy Edmunds.

8:59AM Court called to session.

8:45AM First at the defendants' table this morning is Bernard Kilpatrick conservatively attired in a dark suit. Next in is Victor Mercado who sits quietly next to his lawyers. Last to arrive in the courtroom this morning is Kwame Kilpatrick who goes over to talk to longtime friend Bobby Ferguson before taking his seat. First witness expected to testify this morning is Internal Revenue Service agent Ron Sauer.

About the author:

Alexandra Harland is a Princeton undergrad and has a masters degree in International affairs with Columbia. A Montreal native, she worked with the Daily Telegraph newspaper for a few years before transitioning to TV, when she worked at ABC News with Peter Jennings. Alexandra has also worked in newsrooms in both Detroit and Boston.

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