Live Blog: Kwame Kilpatrick Trial Day 58 - FOX 29 News Philadelphia | WTXF-TV

Live Blog: Kwame Kilpatrick Trial Day 58

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DETROIT -

M.L. Elrick will have the scoop on Fox 2 News tonight plus his unique take on MyFoxDetroit.com.  We'll be back in the morning.

1:02

Bullotta tells the judge this would be a good stopping point. Robert Snell was kind enough to tell me that the proper spelling of Bobby's Forman's name is Shakib. And another day is done. 

1:01

New call, Bernard is asking Bobby if the Detroit Economic Development Corporation can make trouble for Jenkins and run him out of the Book Cadillac. If They or Gerard can run Jenkins out. This was about as direct as you can get. Bernard is asking Bobby if, and how, they can run off a contractor. Plain as day. 

More tape: Bobby asks Bernard what's he needs to do. Bernard says I want to run them out of town. Bernard says Jenkins brought in some white boys from the suburbs and took his guys off the job. Bobby says they need to talk to Shakib.

Bullotta asks who they're trying to run out. Jenkins. Who did they take off the job. Capital Waste.  

Bullotta asks about a call between Bernard and Shakib (might be Shakib)

more tape: date is Feb. 14 2008 about an hour after the Bernard call we just heard. 

Bernard says his boys were hauling trash at the Book and they were arbitrarily kicked off and Jenkins is bullshitting him and he has a job on the line at waste water and he wants to get in and no way he's going to get in. Asks if George Jackson can get him taken off. I don't like the way he's doing me man.

Shakib says they brought these ass holes from Ohio, says Capital wasn't picking up cans on time. Bernard says he thinks Jenkins is scared of the guys from Ohio.

Shakib says he needs to talk to them, will get with the guy, find out... Bernard says he's going to call George Jackson and see if he can get Jim taken out.

12:50

Bullotta asks Beeckman about Capital Waste and who owns it. Beeckman says john Runco and john Francis. Says they paid Bernard's company Maestro 220,000. 

Beeckman puts on the screen a deposit summary. Beeckman listed them off, says Archie Clark who owns National Media gave him 15,000. Beeckman lists half a dozen regular payment of 5,000 from Capital Waste. 

Bullotta asks him to set the stage regarding the Book Cadillac. Beeckman says the demotion was going on, debris was being trucked out. Says Capital was a roll off dumpster company, a waste hauling company. Says the construction was Jenkins in cooperation with Marous Company. Jim Jenkins located on Jefferson. Shaki Jaria's name coming up. Beeckman says he worked for Ferguson. Beeckman says in the call we're going to hear Bernard is trying to get his clients work at the Book Cadillac. 

Beeckman asks Bullotta for a transcript. Bullotta retrieves one, hands it to him, asks for the date. Feb 14 2008. 

John Francis and Bernard are on the call.  

Bernard says you haven't heard from those people yet. Francis says it's crazy those guys doing this to me. 

Bullotta asks about America switching the load out. Beeckman says that's a competitor. 

Francis asks who the regulatory board that can write them up for every little violation. Bernard says Gerard. Our Gerard? Yeah. Bernard then goes on to say they really want this thing to keep going the project to keep going. Francis keeps asking why Jenkins is doing this to him.  

Gerard frank Phillips is the director of the Human rights department. Bullotta asks if he had power over DBB and DBH. Beeckman says yes. 

Bullotta asks if he heard Bernard says they think the Mayor is weak now. Beeckman says this was during the text messaging scandal.

12:35

Thomas asks her if she asks about cash income but not about cash. Yes.

Thomas asks about gifts, 10-20 or 30,000. Bacur says there's not a limit. Says as far as she knows the person who gets a gift has to pay taxes. Thomas says is it the gift giver or getter that pays. Bacur says you have to fill out a form and report it and the receiver has to pay.

Thomas asks if she's relying on her training. Yes. 

Thomas shows the tax return for 2008, asks if she sees the total income of 127,059. yes. Thomas is standing at the projector again... away from the microphone... 

Thomas wishes here a safe trip back to Texas. She's excused. 

Mike Bullotta calls agent Beeckman to the stand.

12:29

Bacur says Kwame got a refund of $20,000. Direct deposit to his bank account. Says she input the routing number on her screen. 

Bacur says Kwame signed a form authorizing e-filing. Bacur says his adjusted gross income was 110,000, reads the part about signing under penalty of perjury and Kwame signed it in her presence. Says she relied on Kilpatrick to be honest.

Thomas is up now. He says he's going to cut to the chase. Asks if she has no reason to believe Kwame didn't have any other information to report. Correct. 

Thomas says you're not a CPA. She's not. Says she went to college in Lithuania and finished her degree in Texas. 

Thomas asks if agent came to Texas to talk to her. No. Thomas asks her about hand written notes. No, if she took any she put them in the shredder. Says she asks all the clients the same questions. That's H&R block procedure.

 Thomas asks her if she recalls the day Kwame came in. Yes, started that day but not finished. Says she spent 30 minutes with him. Says he scheduled an appointment with her, found her online. Says Kwame was by himself. Says when you sign up on line the system gives you a summary of what to bring.Thomas asks if she's aware of his history. Bacur says she doesn't know who he was. Bacur says they ha

d no discussion about being Mayor or going to jail. Bacur says they talked about moving but not about where he worked.

12:15

Bacur says she went through the list of possible income then asked if there was anything else that might be income. Says they filled out the forms then Kwame came back on April 1313th to sign the forms, came with his wife. Says they reviewed the forms, finished it, filed and signed. 

Chutkow now showing the 2008 tax return. Bacur says this is the first page to the return for Kwame M. and Carlita Kilpatrick. Reported income is $127,236. Employer is City of Detroit. Bacur says no other income was reported, nothing from Compuware. 

Chutkow asks if Kwame told her he got $90,000 from Bobby Ferguson, 90 in a single transaction. No. Got money from Emma Bell. No. Used cash from his campaign for personal purposes. No Used funds from Civic fund. No. Says anything about cash generating businesses. No. 

Bacur testified that she would want to know about any cash received in case it might be taxable. Chutkow shows her the cash deposit summary showing deposits of 114,000 in 2008. Bacur says Kwame didn't say anything about getting cash says she would want to know because it might be income. 

Chutkow asks if he said anything about large gifts, gambling, inheritances, loan repayments. No. No civil judgement or employment compensation. No.

12:02

Thomas just corrected himself, says the date of the receipt from Florida A&M is the same date as Kwame's speech to Florida A&M. No. the speech was the 2727th. The check from the Civic Fund was October 23rd

John Shea is up. Says Terrell mentioned gambling, that gambling income is offset by losses. Terrell says all gambling winnings are to be reported, you report gambling losses on a different form. Says if you lose more than you win you can't report the extra loss. 

Terrell says you wipe out all your winnings for Federal purposes. Terrell says Casinos sometimes file a report to the IRS, a W-2G. Terrell says he's not sure of the exact amount, around 2,000. 

Shea is done. Chutkow has no redirect. Calls Ankam Bakur, let's hope he spells his name on the stand. 

Ms. Bakur swear to tell the truth, she's a 5'6" tall white woman in her mid to late 30's. ANCK BACUR. Says she prepared Kwame's taxes in 2008. She's from Texas and works for H&R Block. She has a delightful eastern European accent and says she has 600 hours of tax school and is a master tax advisory, says that's the highest level of qualification at H&R Block, took the IRS exam and is qualified to represent a taxpayer at an IRS audit. 

Says she met Kwame is 2009 in her office. Says he came to the office and she did his tax return. She's explaining the process with a wry smile. Chutkow asks how long was her first interview with Kwame. She looks apologetic and says she can't remember.

11:45

Court is back in session. Kwame is having a very pointed discussion with Thomas. He's leaning in close to him as the jury comes in and is jabbing the air with his finger to make some point. 

The Jury is back. 

Thomas is back at the podium now. He's putting the Florida A&M check up on the screen, says it's referenced as a donation, says it was in conjunction with the donation official receipt. Thomas says it's also a Gift receipt. Terrell says yes. 

Thomas says the date on the check is October of 2007 and the receipt is dated November 2007. Terrell says if he had seen the check he may have asked if they were one and the same contribution. Thomas asks if there was some relationship there should be income reported. Terrell says or a deduction reported. 

Thomas says if he gave a speech at Florida A&M would it be proper for the Civic Fund to donate to the college. Terrell says they could have done that. 

Thomas asks if he returned the money Florida A&M gave him for the speech could he deduct it. Yes. 

Thomas asks about Kwame spending campaign funds for his attorney fees he might have to report that as income. Terrell says he'd have campaign exposure. 

Thomas asks if he's aware the issue was resolved with the State of Michigan. Terrell says there was an initial agreement but the matter was resurrected. Terrell says he was not aware of a judgement by the Secretary of State that no taxes were due. 

Thomas says you might have or you don't recall. Terrell says he wasn't aware of the subsequent resolution.

11:15

Thomas asks about the Civic Fund Articles of Incorporation. Puts them on the screen, reads provide information to citizens, contribute to redevelopment of the positive image of the city of Detroit, operate and act for charitable...purposes. 

Asks if He'd expect to be reimbursed for the work they do.  

So if Kwame was traveling and talking to the people of Detroit about voting that would be proper. Terrell says he thinks so. He could be reimbursed. Yes.

 Judge Edmunds says let's take a 15-20 minute break. 

11:08

Thomas asks if Terrell knows Derrick Miller. Yes. Do you know the allegation gave Kwame money. Yes. 

Thomas if Miller didn't give Kwame money there'd be no money to report. He never reported that money to you so the logical assumption is he didn't get the money and there was no need to tell you.

Terrell says that's correct. 

No need to put it on the tax return. Correct. 

Thomas says there are many non taxable ways to get money that don't need to be on the return. Correct. 

Thomas asks bout the Civic Fund 990's. You would agree Kwame was a figurehead. Yes. 

Thomas asks if you knew Emma Bell was a fundraiser. Yes. She got a percentage. Yes. Any problem with that. No. You didn't prepare the 990. No 

The campaign 990's were filed on time. Terrell says there were no 990's for the campaign. Those were for the Civic Fund. Thomas asks if the Civic fund filed on time. Terrell says one year might have been late. 

Thomas asks if the money can be used for political reasons but not candidate specific. Terrell says most for social issues.

11:00

Thomas shows the 2005 and 2006 returns, asks if they paid taxes. Terrell says 21,000. 2007... Terrell says they paid 22,904. 

Thomas says we're talking in a special language and people do sometimes too, asks what is income. Terrell lists a bunch of stuff. Thomas stops him at real estate, asks if you buy a house, then sell a house, one you had to do repairs to. Terrell says repairs on a house don't count. Says there's now evidence of a house sale. Thomas asks if you can carry forward the capitol gain if you sink the money into another house. Terrell says that was some time ago. 

Thomas asks if the sale of a home might have been a tax consequence. No. 

Asks if there were other things they might be described as income. Terrell says income from a business or partnership, gaming winnings. Thomas asks he talked to Kwame about what income was. Terrell Says not a full blown definition of every line or what the code says. 

Terrell says the only time he talked to Carlita was about child care expenses.

 Thomas now wants to talk about what is Not income. No. Terrell says if someone gives something of value. Thomas asks about suits. No. Money in any amount. No. 

Thomas asks about a loan. No. 

Thomas asks if Mr Kilpatrick got a gift he didn't have to tell Terrell about it. Correct. Whether it be money, suits, or travel. No.

10:48

Thomas asks about the wage drop in 2004, does Terrell know Kwame got less money in his pay. Says he read something about that.

Thomas says if he over pays and gets money back in 2004 what happens. Terrell says the only place it's treated as income in the next year. 

I really want Thomas to ask why, if Terrell's company did both the Civic Fund taxes and the personal taxes, they didn't catch that donation check to Florida A&M. Let's see if he gets there.

10:44

Jim Thomas is up on cross examination. Asks if Terrell did the 990's for the Civic Fund. Yes. Asks who is William Phillips. Terrell says he was a lawyer for the Kilpatrick for Mayor committee. 

Thomas asks what his involvement was with the Civic Fund. Says his director of Accounting handled the Civic Fund and got the information from Phillips. Thomas says it look likes the tax returns, the personal ones, were filed on time. Yes. 

Thomas asks if the signatures were signed in front of him. No, somebody picked them up and they were signed and sent in. 

Thomas asks if Terrell was hands on with these tax returns. Yes. Says EPU officers would pick up the forms.  

Thomas asks if he has staff do the returns. Terrell says he did the returns himself, nobody else was involved.

Thomas asks him to explain the disclaimers that other preparers send out but that he doesn't. Says they're questionnaires. 

Thomas asks if sometimes tax payers inadvertent leave stuff out. Terrell says some times.  

Terrell says he never met Kwame face to face it was always over the phone.

10:34

2006 return, made $150,000 in Wages, Salaries, Tip, etc. Stocks didn't do as well as the year before. Signed again by Kwame and Carlita under ;penalty of perjury. 

2007, $159,000, got 84 in taxable interest, got a $577 state tax refund, $7,700 in capitol gains, total is $167,005. No business income, now other income, just the W-2 from the City.

Chutkow shows a gift receipt from Florida A&M for $5,000. Kwame claimed this as a charitable contribution and claimed it as a deduction. Wow, he finally spent money on something other than a suit. Ha, Ha, Ha, Ha..... the check was written from the Kilpatrick Civic Fund yet Kwame claimed it as a personal deduction. Why I find that funny, I don't know, it just shows Mr. Kwame Kilpatrick's character precisely. Terrell says if he'd seen the Civic Fund check he would not have let Kwame take it as a personal deduction.

10:23

Chutkow back with Kwame's tax guy. Has the cash deposit summary on the screen. Asks if from 2003 through 2007 that Kwame reported the cash deposits shown here. No. (those deposits range from a low of $60,000 to nearly $100,000.) 

Chutkow reads, "under penalty of perjury...they are true and complete." Terrell says yes, he signed it, and Kwame signed it. 

A juror just asked to see the cash summary again. 

Chutkow moves to tax year 2004. Shows the 1040, made 167,000 that year. Chutkow shows the W-2 with the same number. Goes through it line by line. No real estate, S-corps, or other income. Nothing from Carlita so the W-2 stands. Kwame and Carlita signed it. Terrell signed it as preparer. Carlita listed "home maker" as occupation." 

Chutkow moves to 2005. Wages 153,000. W-2 is the same. His stock did better this year. He got 2500 in capitol gains. Kwame listed "Mayor" as occupation. Carlita didn't list an occupation. Signed under penalty of perjury.

10:11

Court is once again in session. Judge Edmunds tells the court that 2 witnesses have travel issues so we'll be going straight through with only a short break.

9:48

We're taking a quick break for a juror.

9:47

Chutkow going through the tax returns line by line now. Kwame made $187,000, 168,000 from the city of Detroit, Carlita made 19,000 from Next Vision. This is the 2003 return.

Kwame got 1900 for speaking at Wilberforce University that year.

Chutkow asks if Kwame listed any "S" Corporation income. No. Any other income. No. 

Terrell reads the total, $188,000.

Chutkow now shows a summary of cash deposits, asks if in 2007 he made $77,000 in deposits. Thomas objects, can't quite hear him. Judge Edmunds says his objection is well founded that Terrell already said Kilpatrick didn't tell him about the deposits.

A juror has just asked for a break. 

9:39

Chutkow puts up the 2003 return on the screen. Terrell says line 17 is derived from a schedule "E" an "S" type corporation... where you use a K-1 form then transfer to the schedule "E." I'm ready to run screaming from the room right now. 

Suffice it to say this is where a company is set up so that income from a company doesn't get taxed twice, it flows through to the owners and is taxed as income. For small businesses. 

Terrell says Law firms use this. 

Chutkow asks if Kwame talked about gambling winnings. No. Other payments for repayment of loans. No. Civil judgments, award from a lawsuit. No. Any unemployment compensation. No. Any other non-taxable sources of income. No. 

Chutkow asks if he relies on clients to be truthful and accurate. Terrell says they sign the return. Says he tries to jog his clients memories in case they forgot something or bring up things they might not know about.Terrell says he relied on Kwame to be truthful and accurate.

9:30

Chutkow asks if Kwame ever told Terrell that Karl Kado gave him cash or that Jon Rutherford gave him cash, or that Derrick Miller gave him cash. No. 

Bobby Ferguson? No. 

Terrell says he was the camping treasurer from inception through 2008. Says he collected and reported all the information. Says he knew Emma Bell one of Kilpatrick's fund raisers. Terrell says Kwame did not tell him that Bell kicked back money or that Kwame took money from the campaign for personal use. 

Terrell says all that should be reported on the tax return. Says he also prepared the for 990's for the Civic Fund. 

Chutkow asks if Kwame reported the cash Bell kicked back from her Civic fund raisers. No. Golf Clubs? No. 

Any cash related businesses? No. Terrell says only speaking engagements. No other cash during the 2003 through 2007 period.

9:23

Terrell went to Dillard University in New Orleans, worked at Arthur Anderson and Company CPA's. Terrell is a 50-ish, athletic, tall gray haired black man with black rimmed glasses. His has a baritone voice and gives off an air of competency that inspires accounting confidence. He owns his own company now. 

Terrell says he met Kwame before he ran for Mayor, knew Bernard when he was a county commissioner, and from playing basketball. 

Did the first return for Kwame in 2003. Says he got the information for the returns from either Kwame or his wife Carlita. Says they'd talk on the phone and have someone drop off documents.

 Terrell says he doesn't send out questionnaires, says talking to folks on the phone is more efficient.

 Chutkow asks if he'd dig further if something was missing. Terrell says they'd have a follow up conversation. Most of Kwame's income was employment income, W-2, from employers like the City of Detroit. Says in 2003 Carlita turned over a W-2 as well. Says Kwame was the primary source of income. 

Chutkow asks if Kwame ever gave him a 1099. Terrell says once, that he can remember, from a speaking engagement.

9:12

Prosecutor Mark Chutkow is at the podium in the center of the room, directly before the Judge, and to his right is the jury box, on his left the defense table runs the length of the wall. In the corner to the Judge's right is the witness box.

Judge Edmunds greets the jury and Chutkow calls Gregory Terrell to the stand. Judge Edmunds asks him to raise his right hand and swears him in. 

Terrell is Kwame's tax preparer. Chutkow is moving documents into evidence. 

9:05

The picture is up, the defendants are taking their seats at the defense table, and the prosecutors are sticking sticky notes on documents at their table. 

"All Rise." Court is in Session, Judge Nancy Edmunds is sorting out documents at the bench as she takes her seat. Reading glasses on she sets aside her document, announces to the room that while they are waiting for Mr. Kilpatrick she'd like to see counsel for a second. The attorneys huddle at the bench. 

Seems Kwame and Bobby ducked out into the hall for a minute. They are back now.

8:59

Just waiting for the picture in the overflow room to pop up on the screen.

8:38

Good Morning on another chilly day from the Theodore J. Levin Federal Court House.


Ken Martinek is Senior Producer-Investigations for Fox 2 News. You can contact him at ken.martinek@foxtv.com

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