IRS probes real estate deals by ex-Mayor Kilpatrick
Detroit’s former Mayor Kwame Kilpatrick may have lost a fight with the U.S. Supreme Court to clear his name of criminal charges, but one federal agency still wants something from him and his wife.
The Internal Revenue Service is again investigating real estate deals by Kilpatrick and wife Carlita Kilpatrick and is trying to track down everyone who gave money to the disgraced former mayor from 1992 to 2008, the year he resigned amid the text-message scandal.
According to a summons filed on July 6 with Kilpatrick’s criminal defense lawyer Harold Gurewitz, the IRS is seeking financial records held by the couple from 2003 to 2008 that include bank statements, deposit details and canceled checks.
The IRS also wants documents related to the sale of two Kilpatrick homes in Detroit, on Santa Rosa and Leslie, and for Kilpatrick's lawyer to turn over records that would “identify each person who gave money (in cash, check, other) to Kwame Kilpatrick from 1992 through 2008.”
The deadline to provide the records is Tuesday. Gurewitz is asking a federal judge to quash the summons, saying the government likely already has such records through the IRS. He also said the records are protected under attorney-client privilege.
This is the second time Gurewitz has filed to quash an IRS summons for the Kilpatricks. The first one was sent in April 2015 and the IRS agreed to withdraw, according to Gurewitz.
Girewitz said Friday he doesn’t know why the IRS refiled the same summons.
“Maybe they think it’s over now and the kind of protections I complained about didn’t apply anymore,” Gurewitz said. “It isn’t over. There is still a proceeding going on in the district court.”
IRS spokesman Luis Garcia declined comment. The government has until Oct. 13 to file a response.
In June, the U.S. Supreme Court rejected Kilpatrick’s appeal of his public corruption conviction, putting a final end to his bid to overturn his 28-year prison sentence.
Kilpatrick, 46, was convicted of using his position as mayor of Detroit and state House representative to execute a wide-ranging racketeering conspiracy involving extortion, bribery and fraud.
He and Bobby Ferguson, 47, a former city contractor and friend of Kilpatrick, were found guilty of running a criminal enterprise out of the mayoral office in a five-month trial in 2013.
Kilpatrick was sentenced to one of the longest prison terms ever handed down in a corruption case. He is serving his time at a federal prison in El Reno, Oklahoma, and will be eligible for release in 2037.
Gurewitz is still defending Kilpatrick on a case before the U.S. Sixth Circuit Court of Appeals asking for reconsideration of $4,584,423 in restitution as part of his 2013 criminal sentence. Kilpatrick was ordered to pay that money to the city’s water department, which was victimized by the mayor’s racketeering conspiracy, and more than $195,000 to the IRS.
In December 2012, four months before he was convicted of racketeering and other charges, Kilpatrick said he was $1.8 million in debt. The debt included $240,000 in loans from Compuware co-founder Peter Karmanos Jr. and businessmen Roger Penske, Dan Gilbert and James Nicholson.
Carlita Kilpatrick was not charged in the City Hall corruption case but her name was mentioned regularly during the government’s case.
She received more than $100,000 in state tax dollars from grants steered to Detroit nonprofits by her husband when he was a state representative, according to trial testimony.
The couple’s finances played a key role in sending Kilpatrick to federal prison.
Federal agents showed Kilpatrick deposited $840,962 into his bank accounts on top of his mayoral salary.
Prosecutors said the money was from kickbacks, bribes and cash generated by a criminal racket that plagued City Hall.
The Kilpatricks once enjoyed a luxury lifestyle that has since spiraled downward. They lived rent-free in the Manoogian Mansion during Kwame Kilpatrick’s tenure as mayor, owned a Florida vacation home and moved to a $1 million Texas mansion after he resigned in 2008.