Former Detroit Mayor Kilpatrick indicted on fraud and tax-related charges

DETROIT, MICHIGAN (BNO NEWS) – Former Detroit Mayor Kwame Kilpatrick was indicted on fraud and tax-related charges, the U.S. Justice Department said Wednesday. If convicted he could face up to life in prison.

Kilpatrick, 40, of Southlake, Texas beginning in 1999 allegedly devised a scheme to use the Kilpatrick Civic Fund, a tax-exempt social welfare organization registered with the Internal Revenue Service (IRS), to pay for personal expenses and to fund his mayoral campaigns in 2001 and 2005.

Despite public statements and letters claiming that Civic Fund donations went to pay for voter education and to improve the lives of the citizens of Detroit and surrounding communities, it is also alleged that Kilpatrick used Civic Fund monies to pay himself cash kickbacks, which he took from the paychecks of an individual employed by the Civic Fund to provide money to friends and relatives. He also used the money to pay for items such as counter-surveillance and anti-bugging equipment, yoga and golf lessons, golf clubs, summer camp for his children, personal travel, moving expenses, car rentals and leases of cars and a personal residence.

The indictment further alleges that Kilpatrick used the Civic Fund to pay for campaign expenses, including polling, focus groups, public relations and political consulting.

While in officer as Mayor of Detroit, Kilpatrick allegedly received unreported taxable income of at least $640,000 between 2003 and 2008, including cash, private jet flights, and personal expenses paid for by the Civic Fund. In addition, the indictment says Kilpatrick filed false tax returns, failing to declare this income in tax years 2003 through 2007, and that he evaded taxes in tax year 2008.

"It is important that public officials not escape prosecution just because they leave office," said U.S. Attorney Barbara L. McQuade. "Public officials need to be held accountable to deter them and others from cheating our citizens in the future."

"No one is above the law," said Special Agent in Charge Maurice Aouate. "This indictment sends a clear message that those who make up their own rules based on fraud and deceit will be prosecuted."

Kilpatrick was indicted on Wednesday with 10 counts of mail fraud, three counts of wire fraud, five counts of filing a false tax return and one count of tax evasion.

Each fraud count carries a maximum sentence of 20 years in prison and a fine of $250,000, and each tax count carries a maximum sentence of three to five years and a fine of $250,000. Kilpatrick is scheduled to be arraigned on July 13.

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