The Motor Citys former mayor, Kwame Kilpatrick, has been indicted by a federal grand jury on 19 counts of fraud and tax evasion.
The indictment alleges that, beginning in 1999, Kilpatrick devised a scheme to use the Kilpatrick Civic Fund, a tax-exempt social welfare organization registered with the Internal Revenue Service, to pay for personal expenses and to fund his mayoral campaigns in 2001 and 2005.
The indictment also alleges that, despite public statements and letters maintaining that Civic Fund donations went to pay for voter education and to improve the lives of the citizens of Detroit and surrounding communities, 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, and 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.
The tax charges in the indictment allege that, while mayor of Detroit, Kilpatrick 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. The indictment alleges that 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.
The indictment included 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 imprisonment and a fine of $250,000, and each tax count carries a maximum sentence of three or five years and a fine of $250,000.
Kilpatrick was elected mayor in 2001, but resigned in 2008 when he was charged with eight felony counts, including perjury, misconduct in office, and obstruction of justice. He was sentenced to four months in prison after he pleaded guilty to reduced charges and was released on probation after serving 90 days. However, last month he was sentenced to 18 months to five years in prison for violating probation, and he is currently in prison in Michigan.
