BLOG: Kilpatrick owes almost $200k in taxes, says IRS expert
9:17 AM, Jan 25, 2013
6:17 PM, Jan 25, 2013
DETROIT (WXYZ) -
Follow the very latest in the Kwame Kilpatrick corruption trial as 7 Action News Investigator Ross Jones blogs from federal court:
1:00--The end: Thanks for joining us. That's all for this week. See you back here Monday.
12:47--Taxes dodged: Selz says that, in 2003 alone, Kilpatrick dodged $23,657.48 in taxes (allegedly underreported his income by $78,100). He owes $17,701.42 for 2004, $22,969.18 in 2005, $29,933.53 for 2006, 28,440.63 in 2007 and and $72,501.33 in 2008.
Grant total of taxes owed, according to Selz: $195,403.61
12:29--New witness: Carl Selz is on the stand now. He's an IRS Civil Division employee and is a fraud investigator for the department. He says he's been sitting in trial, listening to the testimony and reviewing all of the evidence, and will present his opinion as a "summary witness." He's going to deliver his summaries (or, findings) here in court.
12:25--Not an expert: Sauer acknowledges that he's not an expert in 501c4 non-profit funds (that's what the Kilpatrick Civic Fund is).
12:14--Sauer note: Agent Ron Sauer is still on the stand, answering questions from Asst. U.S. Attorney Michael Bullotta. He's being shown checks--as big as $1000 and as small as $10--written to Kilpatrick. They were deposited into his checking account, and therefore wouldn't have been included in Kilpatrick's $531k cash total.
Sorry for the delay in blog posts. Had to run outside and do a quick, snowy live shot for our 7 Action News at Noon viewers.
11:45--Paid back: In 2009, Thomas shows that Kilpatrick wrote a check reimbursing the Kilpatrick Civic Fund for more than $13,000 in expenses. However, as Sauer points out under questioning now from the government, Kilpatrick received at least $150,000 in personal expenses paid for by the fund.
11:19--Donation: Thomas showed that Kilpatrick wrote a $1,500 check to the Civic Fund while he was still Mayor. It's unclear if that's the only donation Kilpatrick made.
11:10--Civic Fund: Thomas is going over the list of alleged personal expenses, paid for by the Civic Fund, which the feds compiled. Thomas is trying to argue that some did, in fact, meet with the mission of the fund's purpose. Super Camp, for example, was an educational trip. Sauer agrees, but also points out that the only children who benefited were Kilpatrick's twins.
11:00--We're back: Thomas still cross-examining Sauer.
10:26--Short break: Stay with us, folks.
10:20--Aware of the rules: Billing records from the law firm hired by the Civic Fund indicates that meetings were held about the political rules that the Civic Fund had to follow.
One meeting was described as a "Conference with W. Phillips regarding political activity limitations; examine tax code regarding same." W. Phillips is William Phillips, who was a friend of Kilpatrick's and the lawyer hired to work for the fund.
The suggestion seems to be that Kilpatrick and his team knew the rules, so why would they break them?
10:03--Still alive: No, folks, I've not taken ill. I'm here, just waiting for something significant enough to blog. I don't want to get too down in the weeds if there's not something that jumps out as super relevant.
9:42--Never submitted: Now Thomas is asking Sauer about the Kilpatrick Civic Fund, which has also been mentioned in the IRS investigation. Thomas reminded Sauer that, years ago, the Civic Fund filed amended articles of incorporation that allowed the non-profit to do
some political work (as long as it didn't benefit one particular politician). But, says Sauer, those new articles were never submitted to the IRS. This is the first we've heard of that, and could prove to be significant.
9:34--Doesn't add up: Sauer keeps pushing back on Thomas's assertions, like the fact that a party called "Splash of Red" and another where Detroit Police officers wrote Kilpatrick checks would not be included in Sauer's investigation.
"Gifting by employees of the Mayor of the City of Detroit, you're claiming that as a gift? People who work for the mayor?" Sauer said.
9:30--Checks written: Thomas is showing checks written to Kilpatrick, some around the time Kilpatrick was headed to jail over his perjury case, and one after he got out of jail in 2009. He received $100 from Willa M. Walls, Tunesia Fowler Turner (with "Love you" written in the memo), Marvel Cheeks (his grandfather) and Cloteal J. Fowler (again, "love you" in the memo line). Patricia Peoples, his cousin, wrote him a $250 check in February 2009.
That's a long way from $531,000, from Thomas says he has more checks.
9:15--Other avenues: In his effort to raise doubt about Sauer's research into Kilpatrick's finances, Thomas raised the possibility that the former mayor could have gone to check-cashing stores, had money transferred to him from Western Union or--like he said yesterday--received lots of cash as a gift, none of which would have shown up in Sauer's investigation.
But the IRS agent was hesitant to play ball.
"The evidence doesn't support what you're portraying," Sauer said.
9:10--Acknowledging error: Still cross-examining Sauer, Kilpatrick lawyer Jim Thomas was quick to point out that he made an error in his math yesterday. He said that if 200 people gave his client $50, it would total $100,000. In fact, it would only add up to $10,000, and this morning Thomas acknowledged his error, which he initially attributed to both himself and Sauer.
We did not (make the error)," Sauer said, drawing laughter from the courtroom.
9:05--Witness: Still on the stand is IRS agent Ron Sauer, who's been testifying about Kilpatrick's finances and allegedly hidden stashes of cash: a total of $531,000 deposited into his bank accounts, according to Sauer. He also said that Kilpatrick spent almost $900,000 more than he was paid while Mayor from 2002 to 2008.
9:00--Day 61: Welcome back everyone. Today, Kwame Kilpatrick is
preparing for his fourth stint behind bars, following revelations that he did not disclose a $2,000 gift he received from a Chicago pastor. Following today's court hearing, he'll be headed to jail for a long weekend with a release date set for Monday.