Feds: Kilpatrick owes thousands of dollars in back taxes

(WXYZ) - Federal prosecutors say Detroit’s former mayor owe nearly $200,000 in taxes because of cash he failed to report as income.

They want the jurors to connect the dots between hundreds of thousands of dollars in cash that’s not accounted for and several tax crimes and Friday they used two different IRS experts to try to make their case to the jury.

An IRS certified fraud examiner says Kwame Kilpatrick owes the government nearly $200,000 in taxes.

Federal prosecutors have spent the last few days showing the jury in the Kilpatrick Corruption Case hundreds of thousands of dollars in cash expenditures that allegedly were not reported by Detroit’s former mayor on his federal income taxes.

Kilpatrick, his father Bernard Kilpatrick, and his friend Bobby Ferguson are on trial, accused of running a criminal enterprise out of city hall.

The IRS expert told the jury Friday that he added up various cash deposits and cash payments on Kilpatrick’s credit cards.  The expert says that because of all that cash -- between 2003 and 2008 Kilpatrick owes more than $195,000 in taxes.

Also Friday – Kilpatrick’s lawyer Jim Thomas continued cross examining IRS agent Ron Sauer about the cash the feds have been tracking for years.

Thomas seemed to suggest checks given to Kilpatrick as gifts could have been cashed at check cashing stores in Detroit which would not have been recorded in the former mayor’s bank accounts. 

Sauer testified that the IRS did not subpoena any check cashing stores – but maintained that gifs received from birthday parties or other events to help Kilpatrick still would not account for the $1.4 Million Kilpatrick spent during a 6-year period.

Thomas did get Sauer to admit that he did not account for any potential cash gifts in that dollar amount.

“Direct examination is one thing, and cross examination is another, and it appears as if there are just two different points of view.  And it was never more clear that there are two points of view with this witness,” said Thomas.

Thomas also tried to chip away at the feds allegations that thousands of dollars in Kilpatrick Civic Fund expenses were used for personal gain. Thomas showed the jury a check that Kwame Kilpatrick wrote to the civic fund to reimburse some of the trips he took -- but Agent Sauer pointed out that the check was only written after the feds had subpoenaed records from the non-profit.

“In my opening statement I had originally told the jury that we were going to be challenging the investigation. That obviously tees up the very point that I was making with this agent today. And we’ll see how this goes,” said Thomas.

Federal prosecutors are still questioning the IRS fraud examiner – so there will be more testimony from him on Monday.

And this weekend, the defense will be preparing for their own witnesses--  who will start being called as soon as the prosecution rests early next week.