Day 2: Kilpatrick made huge cash deposits, flew on contractor's private jet

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Posted: 09/24/2012

By: Ross Jones

DETROIT (WXYZ) - The first day of witness testimony began today in the Kwame Kilpatrick corruption trial. Investigator Ross Jones was blogging live from the courthouse, you can follow his blog below:

12:37--Ending for the day: Officer Smith will be today's last witness. Only about 194 more to go...give or take a few. We'll be starting tomorrow bright and early at 9AM here at WXYZ.com. Thanks again for joining us today!

12:26--A new EPU officer testifies: Chad Smith, another EPU officer, is on the stand. In Kilpatrick's first year as mayor, while he was still living at his home and not yet moved into the Manoogian Mansion, Smith was instructed by Kilpatrick to get some money from shoes in his closet to pay a $1500 credit card bill.

12:22--Swept for bugs: The mayor's executive protection detail swept the Manoogian Mansion and the 11th floor of the city county building, where the mayor's office is, for listening devices. The officer said in five years in protecting Dennis Archer, he never swept the mansion nor the mayor's office for bugs.

12:15--Happy birthday, indeed: Kilpatrick's attorney inferred that, at an event for Kwame Kilpatrick, now deceased businessman Don Barden passed around a box for guests to fill with cash. Barden, Thomas said, put $5,000 in the box and encouraged others to add more into the kitty.

12:11--Another EPU officer: Another member of Kilpatrick's protection detail (EPU) is now testifying. His name is Dwayne Love, and he's now being cross-examined by Kilpatrick's attorney Jim Thomas. He testified that he never saw Bobby Ferguson give Kilpatrick a dime.

12:10--Sorry for the delay in blogging. Had to jump outside to do a quick liveshot on Fort Street to update our viewers watching 7 Action News at Noon.

11:41--Kilpatrick's "close relationship": Kilpatrick wanted to have Officer Mike Martin back on his Executive Protection Unit when he was transferred out for alleged abuses. Martin was ultimately brought back, and Kilpatrick often used his friend to make "personal runs" on the mayor's behalf.

"Often times, I didn't know where Officer Martin was going," he said.

Sgt. Travis said he did not believe Martin was doing anything illegal.

11:33--Praise for Kilpatrick: Sgt. Travis has plenty of nice things to say about Kilpatrick. He said he was a "very hard-working mayor," and Travis should know: he's worked for four. He said he never thought Kilpatrick and Ferguson's relationship was unusual, never witnessed an exchange of money, and never saw anything that would raise his eyebrows.

He said he doesn't remember seeing Kilpatrick party, and says he never saw the former mayor even have a drink.

11:26--The high life: Sgt. Travis said he accompanied Kilpatrick to Tallahassee, Florida, where Kilpatrick went to college and also had a home, on the private jet owned by Tony Soave, a city contractor who said he was extorted by Kilpatrick. He said he flew on the jet three or four times.

Soave was never present on the jets.

11:18--Sgt. meets Bobby: Sgt. Travis said he met Ferguson when he saw him enter the Mayor's office on a few occasions. Ferguson is a co-defendant in this trial, and is accused of kicking back cash to Kilpatrick in exchange for the mayor greasing the skids to help Ferguson get city contracts.

He said he also witnessed Kilpatrick visit Ferguson at his home and at his businesses several time, too. The visits were usually a couple of hours long. On one occasion, Sgt. Travis offered to go inside Ferguson's office with Kilpatrick, but the mayor told him he would not need any protection.

11:12--Witness #4: Jefferson Travis is the next witness for the government. He's a sergeant in the Detroit Police Department, and at one time was a member of the Executive Protection Unit, which protects the mayor and his family. He said he came on board to help clean up the unit, which became mired in scandal for falsifying overtime reports and wrecking city vehicles.

11:01--Paying off loan with cash: Dixon is testifying that Kilpatrick paid off a $15,000 loan he received from the bank with cash, with payments ranging from several hundred dollars to more than $3,000. Several of the cash payments were made on the same day.

10:56--Witness #3: J. Diane Dixon, another former branch employee of First Independence Bank, is the government's next witness this morning. She was the consumer lending manager for the bank.

10:45--Break time: We're on a 15 minute break right now, giving jurors a chance to catch their breath and gather their thoughts. Blogging will resume shortly.

10:26--Money for a trip: Under questioning by Kilpatrick's $9,000 cash deposit for a cashier's check (which we mentioned earlier) went to Cosmopolitan Travel. It paid for a vacation, Robinson testified, in December 2005.

And that $15,000 cashier's check? It went to Wayne County for his restitution. It was paid the same day Kilpatrick reported to jail.

The bigger question: where did the cash come from?

10:22--"Not

unusual:" Robinson said it's "not unusual" for bank customers to pay their credit card bills with cash, in his opinion.

10:16: Cashiers checks, too: Kilpatrick also made large cash deposits in exchange for cashier's checks, Robinson testified. Questioned by Assistant US Attorney Eric Doeh, he gave examples of deposits in the amounts of $9,000 and $15,000.

10:01--Witness #2: Jerome Robinson, an employee of First Independence Bank from 2004-2010, is now up at the stand. He said Kilpatrick regularly came in to his bank to pay his Mastercard bill. The former mayor usually paid his entire bill--roughly $3,000 but often more--with cash. Kilpatrick usually used $100 bills.

9:55--Happy birthday, boss: In addition to plenty of cash gifts his client apparently received, Jim Thomas disclosed that Kilpatrick's staff bought him a nice $25,000 Rolex watch for one of his birthday's.

When my boss has a birthday, everyone in the unit pitches in $3 and we buy her a chocolate cake.

9:53--Ferguson's major withdrawals: Kilpatrick's withdrawals in cash were dwarfed by Bobby Ferguson's, who withdrew more than $2,000,000 in cash from various bank accounts, Sauer testified.

Assistant US Attorney Michael Bulotta is again quizzing Sauer. Since we know Ferguson had hundreds of thousands of dollars stashed in safes, Bulotta said, isn't it true that withdrawals from just a safe would not be traceable? "Yes," Sauer said.

Bulotta is suggesting that even though Ferguson's withdrawals and Kilpatrick's' deposits didn't cleanly line up, that may be because Ferguson already had pounds of cash at his disposal.

9:51--Bobby and Kwame: Following a line of questioning from Thomas, Sauer disclosed that he could not develop a correlation between withdrawals made by Bobby Ferguson--KIlpatrick's friend and co-defendant--and deposits made into Kilpatrick's accounts.

9:46--'Tis better to give than receive: And what about gifts? Thomas is also asking IRS agent Ron Sauer about cash gifts Kilpatrick may have received through the years. Specifically, what about a 2006 party where Kilpatrick was "gifted" money? Or when he was first elected mayor in 2001, when he received more cash gifts? Or his 35th birthday party, when he also received cash? Sauer was aware of some, but not all.

Again, Thomas seems to be raising the possibility that these large cash deposits came from some, well, awfully nice friends.

9:41--Carlita's cash: Now quizzing Sauer is Kilpatrick's lawyer Jim Thomas. Right now he's focusing on whether or not Sauer accounted for Carlita Kilpatrick's income when she was working until 2002.

"I don't think Mrs. Kilpatrick runs a cash business," Sauer said.

"Not what I asked," Thomas responded.

Sauer said he did not account for Mrs. Kilpatrick's money. Thomas seems to be raising the possibility that at least some of this cash could have been generated by Kwame Kilpatrick's wife.

9:34--Cash deposits started in '02: While he was a state legislator, Kwame Kilpatrick made virtually no cash deposits into his bank accounts. That all changed once he became mayor, Sauer testified, saying that he deposited $531,000 in cash between 2002 and 2008. In 2001 and 2002, Kilpatrick made no cash deposits.

9:30--Show me the money: Throughout the course of eight years, Kilpatrick paid his Mastercard bill's with more than $380,000 in cash in cash, Sauer disclosed.

9:25--IRS agent testifies: An IRS agent is the first witness called by the government. Assistant US Attorney Michael Bulotta asked agent Ron Sauer about Kilpatrick's many cash deposits during his time as mayor. Sauer testified that Kilpatrick often made significant cash deposits into a variety of bank accounts during his time as mayor.