Former Detroit Mayor Kwame Kilpatrick was formally indicted yesterday on 19 counts of fraud and tax evasion.
A federal grand jury returned the indictment, which alleged that Kilpatrick used a tax-exempt charity, the Kilpatrick Civic Fund, as his own personal piggy bank. He is said to have spent more than $640,000 of the charity’s money on personal expenses including cars, personal trips and paying college expenses for relatives. Kilpatrick’s defense attorney has indicated that he will plead not guilty.
Kilpatrick is already sitting in state prison. As a result of prior corruption charges, he had agreed to serve 120 days in jail, pay $1 million in restitution to the City of Detroit, give up his law license and not seek public office for five years. He went back to jail last month after a judge found that he was hiding assets in an effort to avoid making restitution. The result was a longer sentence with a potential release date of July 24, 2011 (including time served).
The most recent indictment is the result of an ongoing investigation into Kilpatrick’s dealings while mayor of the city. In 2001, Kilpatrick caught the interest of the IRS when he solicited a contribution to his charity from homeless shelter operator Jon Rutherford. Shortly thereafter, Rutherford received a contract with the city allegedly worth $22 million. Other contributors also reportedly received lucrative deals as a result of their donations.
The charges, however, don’t focus on allegations of bribery and corruption but rather focus on Kilpatrick’s alleged use of charity funds for personal use. This was apparently good enough for Kilpatrick’s spokesperson, Mike Paul, who found a silver lining in the charges. Referring to the bribery allegations as “lies from the pit of hell”, Paul went on to say, “The FBI found nothing remotely close to that in their investigation because it never happened! This investigation puts an end to the ridiculous rumors that the mayor was personally involved with corruption, payoffs and bribes.”
Um, sure. Federal officials note that an investigation into those charges is ongoing.
For now, however, Kilpatrick is facing tax and mail fraud charges. Specifically, he is accused of filing false tax returns for the years 2003-2007 by not reporting a whopping $470,951 in income. For 2008 (the same year he was ousted as mayor), he is accused of tax evasion for failing to report $171,751 in income. He is also charged with 13 counts of mail and wire fraud related to activities used to raise money for the Kilpatrick Civic Fund by falsely declaring that it would be used for charitable purposes.
If found guilty on all of the charges, Kilpatrick could face nearly 30 years in federal prison and be forced to pay significant fines.
