Feds wrap up Civic Fund chapter of Kilpatrick corruption trial

DETROIT (WXYZ) - The feds finally wrapped up the Kilpatrick Civic fund chapter of this trial Wednesday – and to do that they brought on a new IRS agent who kind of rehabbed part of their case by poking holes in some of the suggestions the defense has been making when they cross examination.

Detroit's former mayor is accused of fraudulently using his KCF for personal expenses, including spending more than $1000 from the non-profit to pay for a romantic getaway in Vail, Colorado.

Last week, federal prosecutors showed the jury hotel bills from the Sonnenalp Resort, for a 2002 trip they said Kwame Kilpatrick took with his former Chief of Staff and lover, Christine Beatty.

The former mayor, his father Bernard Kilpatrick, his long-time friend Bobby Ferguson, and ex-Detroit Water Department chief Victor Mercado are all on trial, accused of running a criminal enterprise out of city hall.

During cross-examination at the time, Kilpatrick attorney Jim Thomas questioned IRS Agent Ron Sauer about whether or not he knew that the National Conference of Mayor's meeting had been held that same weekend in November of 2002, suggesting the feds didn't research what kind of work Kilpatrick may have done on that trip.

That prompted the feds to send new subpoenas. Wednesday,  another IRS agent took the witness stand to tell the jury that there is no such thing as the National Conference of Mayors, and that schedules from other mayoral organizations showed there were no meetings in Colorado that weekend.

Also Wednesday, that IRS agent revisited records from a trip to New Orleans that the feds allege Bernard Kilpatrick took during the 2002 Super Bowl. Last week, his attorney John Shea questioned whether they ever confirmed that he took the trip, even though a Civic Fund check was used to purchase plane tickets.

On Wednesday,  the IRS agent showed the jury Bernard's credit card statements showing purchases at restaurants and jewelry stores in New Orleans.

Former federal prosecutor Peter Henning says the Assistant U. S. Attorneys have been using all of these little Civic Fund details to set the jury up for the next chapter of the case.

"I think what the government wants to do is to show that the misuse started small, and then became much more significant to try to build their extortion and bribery case," Henning told 7 Action News Investigator Heather Catallo.

The realtor who leased an apartment to the former first family in 2008 also took the witness stand in the Kilpatrick Corruption Case. Federal prosecutors showed the jury nearly $13,000 in checks from the non-profit Kilpatrick Civic Fund that were used to secure an apartment inside the Park Shelton high rise.

Three more donors from various investment and engineering firms testified about $39,000 their companies gave to the Civic Fund, in the hopes of helping the Detroit Community. Those checks were sent from other states, which the government is using to establish the mail fraud elements of the charges against Kilpatrick.

The Assistant U. S. attorneys are now moving into the extortion "chapter" of the case, which means defense lawyers are preparing for a whole new group of witnesses.

"We'll get ready for the witnesses as they come," said Mercado attorney John Minock.

"It's a part of the process, you know, we've got to get to the next phase, we're on the government's schedule. We're in their case not mine," said Shea.

As 7 Action News first reported earlier this week, Jon Rutherford is expected to testify soon – likely tomorrow. The feds say Kilpatrick and his father Bernard Kilpatrick solicited and took bribes totaling more than $500,000 from the former homeless shelter owner.

Rutherford is cooperating in the hopes of getting possible leniency in a tax evasion conviction.
Federal prosecutors say in exchange for the bribes, Kilpatrick took several official actions to further Rutherford's casino development plan.

"So now you have someone that is going to say, I was extorted or I was a willing payer of bribes. Those are 2 sides essentially of the same coin, but it now takes you into what the government wants to prove, that this was an enterprise designed to misuse authority for personal gain," said Henning.

Testimony continues on Thursday.

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